NQ Mobile shares drop 47 percent, targeted by short seller NEW YORK (Reuters) - NQ Mobile Inc shares plummeted on Thursday, their biggest daily decline ever, after the noted short seller Muddy Waters Research Group called the company a "massive fraud," charges the company said it "rejects as false." The mobile Internet services company, based in Beijing with U.S. offices in Dallas, said it would respond "quickly, transparently and forcefully" to what it called "false allegations." NQ Mobile said it would issue more detailed comments before the market opens on October 25. The stock fell 47 percent to $12.04, its biggest daily decline since it began trading in May 2011. Trading was repeatedly halted because of volatility, but volume was still several time NQ's 50-day average volume of about 383,000 shares. As of its Wednesday close, NQ has a market cap of about $1.17 billion. The research group started coverage of the company with a "strong sell" rating, calling the stock a "zero" and accusing it of falsifying such information as its market share and paying user base in China. Muddy Waters also wrote that the "vast majority" of NQ's China revenue was fraudulent, with much of it coming from Yidatong (YDT), a shell company that Muddy Waters alleges NQ controls. "NQ's largest customer is really NQ," the report read. Our due diligence process included visiting 10 sites purportedly occupied by YDT, all of which were empty or did not exist. Muddy Waters shorts the stocks it reports on, making money if the stock price declines. Many of its reports, which focus largely on Chinese companies, have succeeded at devastating the share prices. Previous targets have included Standard Chartered Plc, Focus Media and American Tower Corp. One high-profile target was Sino-Forest Corp, which filed for bankruptcy in 2012 following a Muddy Waters report. Editing by Clive McKeef, Andre Grenon and David Gregorio