NQ Mobile (NQ) CEO Sends Letter of Encouragement to Employees

Shares of NQ Mobile (NYSE: NQ) have been on a wild ride since the company announced on June 4th that an independent investigation did not find any evidence that the Company had engaged in the fraudulent conduct alleged by Muddy Waters. After jumping from $7.63 to as high as $10.85 amid the news, the stock has now retraced all the gains and then some. Shares of NQ last traded at $7.44.

Despite the volatility in the stock, management remains positive on the company and its prospects. Today CEO Omar Khan sent a note of encouragement to the employees of the company, both in China and the US.

While admitting this has been the "toughest 8 months of my professional career", Khan said he is stronger and more resolute today than he have ever been. He added, "[f]ollowing the release of the Special Committee’s independent report, the markets can understand the reasons for our unwavering confidence." Khan said the company is working to complete their 2013 annual audit and remains "laser focused on running the business and maintaining our growth plans that we have previously communicated."

Copy of the Letter:

Dear NQ Family:

I love the spirit and resiliency of NQ! We refuse to hide and will not stop fighting for each other, our families, our partners and our shareholders! I remain fully committed to personally fight for each of us, our families, our partners and our shareholders!

Looking back to when I joined NQ Mobile in January of 2012, I knew I had joined a team that was extremely well prepared for the challenges ahead. I joined a company with a strong product portfolio and deep technology pipeline. I joined a company with amazingly talented employees. I joined a company with a desire to embrace and capitalize on the global smartphone revolution. I joined a group of leaders with a shared vision of the smartphone revolution and the role of NQ within it. I joined a company with demonstrable success and strong catalysts for future growth in arguably the most competitive mobile Internet market in the world. I joined a company that was scrappy and highly motivated, ready for the challenges of building NQ into a global mobile Internet leader. I knew I could build a team globally to complement the existing talent in China. I knew we could leverage our experience with manufacturers and carriers globally to expand the global reach of NQ. I knew that our engineering and user experience talent could globalize the products and services in the NQ pipeline. I knew that our shared vision would produce the next generation of mobile Internet services. Finally, I knew it would be a challenge to globalize a Chinese-heritage software company and establish a cadence of cross-site collaboration from a language and timing perspective. I approached and embraced these opportunities and challenges with full commitment and dedication. I love being the underdog and we have, indeed, been and continue to remain the underdog.

I have said many times, that China either is or will be the largest “fill-in-the-blank” market in the world. In addition, China is home to some of the most talented engineering and business talent in the world. Every global company either has a plan or is trying to implement a plan of how to access the growth, size and talent of the Chinese economy. At NQ, we are approaching the global market from a position of strength in our existing high-growth businesses in China and are nearly 1500 talented employees strong. These are the reasons I was and remain so excited to be an NQ employee.

Over the past two and half years, together, we have executed on the vision of becoming a leading global mobile Internet player. We have built a world-class team that I am proud of and honored to call my family. We have developed products and services relevant to a broad set of global channels and customers including carriers, enterprises, developers, consumers, retailers and manufacturers. We are solving real pain points with our mobile products, services and technologies. I am honored to work with our NQ team that has made this happen in China, the US and beyond. We continue every single day to execute on this vision and the progress is visible to everyone around us.

The one thing that I was honestly not acutely prepared for, were the malicious short-seller attacks on and fabrications about our company, our partners and our people. I underestimated the lengths that they would go to further their agenda of profiting by doing harm to our company, employees, partners and our shareholders. One of the challenges that comes with globalizing a Chinese company is that these short-sellers have developed a playbook of how to instill fear in the markets by disseminating misinformation at a breakneck volume and velocity. In the face of these malicious attacks, as a company, we have maintained unwavering confidence in each other, our products and services and our partners.

All of you, our NQ employees, have shown tremendous focus and resiliency in the face of the very public distractions over the last eight months. I thank each of you for your passion, focus and dedication. Without you, we would not have been able to maintain the growth of our business in every aspect.

Our partners and customers have shown tremendous confidence in our products, services and in each of you. Amidst these attacks, we have added many new customers and partners globally. Further, we remain 100% committed to serving the needs of our partners and customers and helping them build their businesses and serve the needs of their employees and customers.

I want to thank our families for supporting each of us during this difficult time. Without their unconditional support, none of us would have been able to keep the highest level of focus and dedication on serving our customers and growing the NQ business.

I have spent a lot of time with our shareholders over the past several months. I also want to thank them as they have continued to believe in our company, our people, our products and services and the opportunity that lay ahead for our company. As we have said in the past, we will remain focused on growing our business and taking advantage of the tremendous growth of the global mobile Internet. Our employees are also shareholders of NQ. We will remain focused on creating shareholder value for our employees and public shareholders.

I can personally attest that this has been the toughest 8 months of my professional career. The saying that “whatever doesn’t kill you, makes you stronger” certainly applies here. I am stronger today than I have ever been. I am more resolute today than I have ever been. I draw this strength from the people around me. A friend and business partner once told me that he “stood on the shoulders of giants.” That is exactly how I feel. The giants in my life are my family, all of you, our customers and our shareholders.

Following the release of the Special Committee’s independent report, the markets can understand the reasons for our unwavering confidence. Now that the allegations of fraud by the various short sellers have been dispelled by the work of some of the world’s finest independent investigation teams, we can focus the discussion back on our business. We realize that we are not perfect as is the case with any company. In accordance with the findings of the Special Committee, we are committed to continuous improvement of many of our processes, controls and systems, enabling us to build an even stronger long-term company. While we work in parallel to complete our 2013 annual audit, we all remain laser focused on running the business and maintaining our growth plans that we have previously communicated.

At NQ, we will NEVER QUIT fighting for each other, our families, our customers and our shareholders. I am honored to be an employee of NQ.

Warmest Regards,

Omar

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