Arper, good response.
Since this is my last post of the day, here are my comments to both yourself and flounder as they are similar.
1. You both seem to be assuming that companies act in an irrational manner, driven more by spite than economics, thus the argument of why ZTE competitors would fight.
2. I addressed this in great depth in my first post, and we seem to disagree.
3. I view the fight by both google and zte as an economic one, (google may have been driven by its anti patent troll lobbying but it still remained primarily an economic decision).
4. As a result, I am of the view that if a company see's no economic gain to fighting via the courts, they will not. You ask how do we know it cost ZTE alot? Well we know it cost VRNG a great deal in legal bills, ZTE used some of the best counsel in the world, we know that they said they were losing $30 mil in Romania, VRNG had injunctions in place in Brazil, Romania and other countries, this is disruptive even if they are skirting. So when you add it up, we can surmise that ZTE spent $21 mil plus their other legal and tertiary costs. One can easily surmise that it was > $50 mil given the costs VRNG incurred.
5. Now, assuming ZTE competitors would fight, (again I seem to be explained a prior post so it is getting somewhat frustrating), then one may ask why? You are suggesting they don't do a cost benefit analysis, or when they do, they see spending materially more on valid patents out of spite as a valid tactic? To me, sorry that is nonsense. No CEO or CFO would last in their role if they made such decisions. Realize these people answer to boards, to shareholders, not everyone has the power of Google or the Chinese government behind them.
6. Moreover, again, you both seem to suggest that these companies view the courts as leverage, when in fact it will cost them multiples more to go through that process. Indeed, the patents have been deemed valid by not only ZTE but by proxy the Chinese government. There is no 'upside' to paying more to attempt to lower a legal cost that will not go any lower.
Effectively, ZTE "took one for the team" and set the floor, there is simply NO ECONOMIC ADVANTAGE to deal with this via the courts -this is something you both seem to be ignoring, or think holds less value than spite for some odd reason. Perhaps is PTSD of being this stock! (which I would partially subscribe to myself!) But the above view is somewhat of an emotional not rational /objective view.
7. Your point on Google patents being wiped out. Realize those are business process patents that are being wiped out by the PTAB and SCOTUS and are under attack, not SEP PATENTS. STANDARD ESSENTIAL TELCOM PATENTS PRODUCED BY ONE OF THE KEY INVENTORS OF TELCO STANDARDS - NOKIA - VERY DIFFERENT ISSUES SIR! This argument in my view holds no value
8. Finally, you allude to the fact that I am confident in management's ability to extract value. Are we 100% no, but again we look at cause and effect, patent quality, leverage, capitalization, and potential return. At this level there is little risk to the downside in our view. Could be wrong, sure, if we knew 100% what was going to happen Arp, people would be buying this hand over fist. Debating who is right is pointless, only time will uncover that, you place your bet based on the information in front of you, be objective and ignore emotion and see where it goes. In the end this is still a spec stock!
Good Luck to all REAL VRNG Longs!
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