"Making Gains" - From your comments in your response, you have clearly have not read VRNG’s comments in their PRs, nor read their financial statements. I suggest you do as you are making a number of errors in your assumptions and therefore, your analysis.
My responses and comments below:
You said: “My 70 cents is based on my estimates for future revenues and cash burn”
Response: This equates to a $7 mil market cap – which we agree to disagree on, but I can see with your rationale that my view certainly holds more water, as most will see as well below.
You said: In my estimate we should be trading at 1/2 cash plus 1 x 7million today, but degrading day by day
Response: Fair assumption if you assume the company will not monetize or see any revenue from FliCharge group mobile – that is your choice, we believe that they will be able to monetize much more than 2 mil within those 24 months, so we differ in this view.
You said : Consider .5M cash burn per month.
Response: Agree
You said : Consider $2M in settlements in the next 24 months.
Response: And this is based on what? Have you looked at their patent library? Have you read the recent PR stating that in relation to DTV and other discussions on the ZTE /SEP patents? We see that value significantly higher. Time will tell who is right.
However, your view chooses to ignore VRNG’s own commentary (as mentioned above) or assumes that there is only $2 mil in value in those patents. This is simply a guess, pulled out of thin air. It certainly isn't based on any facts or comps (again see the PR's, the $21 mil from ZTE etc). Simply saying that “VRNG will only achieve $2 mil in revenues in 2 years, are going to dilute because I think they will”, when not grounded in fact, logic, or analysis of public information and financial statements is not a defensible or logical position.
ZTE just paid $21 million for use of those SEP patents, logic says they have more value than $2 mil. Perhaps we are making an incorrect assumption that there is further value, but considering that VRNG has publicly stated that they are in talks with others on these patents we are making the assumption that whomever they license will pay more than $2 mil for their use. We view this as highly logical.
Group Mobile had $7 mil in revenues last year, We would assume VRNG purchased this group, which includes FliCharge because they see growth. Even if revenues were flat, that $7 million is greater than your $2 million estimate of revenues over 2 years.
In addition, VRNG24 has shared a great deal of diligence on the revenues accruing to DTV in relation to the QS patents, whether it will be material to VRNG is yet to be seen, but certainly its within the realm of possibility given the revenue numbers we’ve seen from DTV. Note DTV is not the only company infringing on these patents.
In the end, mosaic theory tells me our rationale certainly makes more sense than your $2 mil figure which seems to be based on nothing given you provided no rationale for it, other than "hmm, I think $2 mil sounds good over 24 months." That’s not how any intelligent investor should analyze a company’s forward prospects in my view. Moreover, it seems to ignore numerous facts in the public sphere as I have outlined above.
Summary:
You say $2 mil in two years and provide no rationale other than you just think it to be the case
I provide concrete examples of why that assumption is baseless and not logical given the facts all public investors are aware of, those being
A. ZTE patents are valued at $21 million and the company has stated its in talks with other infringers who we know are bigger
B. DTV settlement is in process and from the diligence done on their revenues related to those patents, there is potential for that agreement to be material to VRNG
C. Groupmobile and Flicharge (together) had $7 mil in revenues last year. Even if flat to down, $7 million is still larger than $2 million
You said: BTW I think the company raises cash again in the next 6 months. Be prepared for more dilution in one form or another.
Response: I URGE you to read VRNG’s financial statements and company PR’s. This is quite an un-defensible position if you understand cash flow statements, cash burn (as you apparently are aware of), and corporate finance 101.
I will not go over the reasons why there will be no dilution (for a number of years) again, as I discussed this FULLY when talking about the R/S months back. I suggest that you and others who may be assuming the company will dilute learn about how and when and WHY a company finances itself. You could take a course on Corporate Finance, pick up a textbook on it, or alternatively read my comments in the past in regards to this issue for the Coles notes version (I have stated why the company will not dilute and indeed if one read and understood VRNG’s financial statements and disclosures they would see why as well. That being said, you can click on my name and scroll back to read prior posts addressing this topic). As a note, I spent 20 years on Wall Street raising money for companies, I do know a thing or two about this subject!
Indeed the company has recently stated in a PR that it has 4 years of operating cash available assuming no revenues. Your comments suggest that you believe investors should IGNORE THE COMPANY’S OWN COMMENTARY for your view?
Again, this is all public knowledge (the cash reserves, commentary on 4 years of operating cash) so I am curious why you would suggest this?
Question, are you trying to imply that the company is defrauding investors about their cash needs? Because, indeed, if they say that they have 4 years of operating cash, this tells the market and investors that they do NOT NEED to raise funds via equity- you are saying they will in 6 months. Effectively, you are suggesting that they are defrauding us by materially misrepresenting their financial position. Please explain your view.
We like to rely on factual statements from a company and its financial statements to determine if and when equity could or would be required. When you analyze those items you will see that your comment that dilution will be needed in 6 months (to even 2 years minimum) is categorically FALSE. This is FACT.
That being said, we wish you luck betting on outlier probabilities of no revenue in two years (or limited of ~$2 million), believing there is need for dilution regardless of the company’s financial statements (cash flow, operating cash burn) and public disclosures/statements. In our view and investment analysis experience that would not be a prudent trade to make.
We will continue to utilize the comments of management coupled with VRNG’s financial statements to make our investment decisions, as well as our collective 100+ of years of experience analyzing companies and financial statements.
We suggest all investors rely on company information as their primary source of information as well instead of chat boards. Should someone not understand the basic financial statements of a company, as stated there are many avenues to address that, and many on this board can assist as well if needed.
Finally, ‘getting to $5’ won’t be hard in our view (on material news) given that is the Book Value of this company (approx $50 million market cap).
As I have stated many times, in our view, there is a group of shorts, trying to spread fear that this company will go bankrupt, have to dilute, won’t be able to incur revenues etc. They have pushed the VRNG share price down post split and are now trapped. If that material news occurs, it would be quite easy for the share price to move well above book value for reasons I have previously stated (I have mentioned this in other posts and feel no need to repeat myself over and over on my rationale.
Finally, if you have any further questions, please go read my previous posts. If you want my views on most subjects regarding this stock, as I have addressed pretty much every negative view in the past!
Good luck to all LONGS
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