When a respected short selling firm targets an issue, it can have a devastating impact on its stock price. Sometimes they are right on with their calls, other times they are not.

That was the case on October 24, when Muddy Waters research firm issued a Strong Sell on NQ Mobile (NYSE: NQ). The short seller alleged serious irregularities at NQ regarding the verification of its cash position and additional transparency regarding its channel and payment partner relationships.

The firm’s allegations sent NQ into a tailspin, declining from its October 23 close ($22.88) to $12.09, for nearly a 50 percent haircut. Two days later, the issue finally bottomed at $7.58 and began to rebound. In Monday’s trading, NQ traded at its highest level since the firm’s allegations were made public, reaching $19.36.

See also: How Morgan Stanley Got Left Behind In The Rally

Immediately following the news, the company formed an independent special committee to conduct its owns review of the allegations raised in the report by Muddy Waters. Also, the company was considering legal stemming from the chaos created by the report.

The allegations raised were not new and the report provided some anecdotal evidence supporting Muddy Waters’ view. NQ rejected the allegation as false and planned a detailed response on October 25. Also, as Muddy Waters founder Carson Block was on Bloomberg TV stating the NQ value as a “zero,” Co-Ceo Omar Khan defended his company on Bloomberg TV stating the allegations were completely false.

Some Wall Street firms downgraded NQ, specifically Oppenheimer, which moved from Outperform to Perform and removed its price target of $19.00, expecting the overhang from the controversy to weigh on the issue. Other opportunistic firms, such as Topeka Capital Markets, reiterated its price target of $33.50 for the issue after the company addressed the fraud allegations during a conference call.

A Seeking Alpha article circulated on October 28 that highlighted other fraudulent Chinese companies that were accused of fraud and now are worthless, the panic in the shares continued. The author claimed NQ Mobile was using many of the same tactics that Sino-Forest, a fraudulent forest plantation operator used when it was exposed by Muddy Waters. In addition, Chinese news articles surfaced that questioned the legitimacy of NQ. Interestingly, the issue bottomed the same day that the article was published.

Over the next few days, the company released financials attempting to demonstrate its cash position is indeed healthy, and that it isn't fabricating revenues. The issue received a nice boost when announced it was in the process of transferring $100 million in term deposits to an account in Standard Chartered Bank. However, some of the gains were offset when Apple removed all of FL Mobile’s, an NQ subsidiary, games from its App store.

The see-saw battle continued in volatile trading on huge volume with the issue recovering from its panic low ($7.58) to end 2013 at $14.70. The one point rally on December 31 on 246 percent higher volume was instigated by a disclosure by Morgan Stanley of taking a large stake in the company.

While the merit of the Muddy Waters’ allegations were being debated, NQ drifted lower in mid January back under $14.00. Meanwhile, on January 15, the company signed a definitive agreement with Sprint (NYSE: S) to collaborate and deliver the next generation of Sprint ID, on all new Sprint Android-powered smartphones in the US market. The first bit of good news in quite some time propelled the issue from its $13.92 close to $15.63 the following day.

NQ Mobile continued to drift higher, despite efforts by Muddy Waters to rattle shareholders. New agreements by its gaming subsidiary (FL Mobile) and preload pacts with Cherry Mobile, a large mobile device brand in the Philippines, fueled another leg in the rally to the $18.00 level.

On Monday, the company announced a Global Distribution Deal for Samsung Electronics to become an authorized global reseller of the Samsung KNOX Mobile Device Management Solution. As result, the issue has revisited the 19 handle for the first time since the Muddy Waters allegations were revealed.

The Street has not heard much from Muddy Waters since the NY Times reported the firm had sent a letter to NQ’s auditor, Pricewaterhousecoopers, on January 24. Perhaps the firm shorted the issue ahead of it announcement and collected a nice profit as the NQ’s shares swooned following its initial announcement. If so, the regulators may be paying a visit to the company’s headquarters in the not so distant future to investigate their trading practices.