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I just added 100 shares!
Yes 100% agree.
Yawn, looks like the start of another down week of irrelevance and oblivion.
NASDAQ!
Great time to add.
No action required; rocks sink all by themselves.
Oh~?..... whatever you wish.
Take this lower please. TIA
I want more at cheap prices. LOL~!
Southwest London was it~?
Right this second I hate to admit it, but I agree that this is turning into a "turd". After the SKH deal NLST had the world by the gonads. Instead of capitalizing and showing the Nasdaq crowd what NLST was made of, it instead stuck around and languished on the OTC. Now, I am not going anywhere as I unfortunately right this second have a lot of shares and am going to ride it out. Just like I am doing with the rest of this current idiodic administration running our country.
Yup. Stocks under $5 are pennystocks.
Back in the 1970s, pennystocks were those under $2. Inflation led to that threshold being raised to $5 in the 1990s.
In general, institutions will nott buy pennystocks. Most have a specific prohibition against buying or holding pennystocks - stocks that are below $5.
And NetList is clearly a turd.
Ergo, NetList is a pennyscam turd.
HTH.
Now NetList is a "pennyscam" "rurd". LOL~!
Okay.... LOL~!
October approaches......
The table is being set. 2 on base so far as they wait.
What part of London~?
I guess, on the opposite end of the spectrum, it's no different than touting how great a stock is when it's fading into oblivion into the 2s. Saying "some people get it" and muting a different perspective. Just like the disaster the country/economy is right now, NLST and our country/economy needs to start going in a different direction to attract more prosperity.
NASDAQ!
It's funny that you have the 1919 Black Sox in your bio. I am almost done reading A Hustlers Handbook by Bill Veeck.
Not as good as Veeck As In Wreck, but only because I know more about the teams and players involved in the latter.
And, as long as NLST is buried in the OTC, the longer in will languish in the 2s and 3s and the judges will think NLST is irrelevant. Eventhough NLST does have an outstanding product.
NASDAQ!
’’I am heavy in this one so I continue to put myself through the pain of endless court system nonsense. No justice in this system whatsoever. This is not my first rodeo in this department, but it might be my last as these always go the same way.’’
Yayuss they do all go the same way, which is why I cannot understand the rationale any shareholder-victim of these pennyscams use to justify their decision to have bought this turd and other like it.
Referring to no one in particular. It will happen when it happens. That's it in a nutshell. Like Biggums says
there are other plays to play until then.
.may take there are others our there they can gamble on. 'm not sure what you are trying to say here mind clarifying?
Been here slightly longer, but feel your post is on the mark. If others want an ROI sooner than this may take there are others our there they can gamble on.
NetList is in the right space at the right time with the right technology going into the future.
Been here for just over 2yrs now and things are really starting yo lean in netlists favor. To wait another yr for settlements is penuts for what the reward could possibly be. Have some patience this will set your kids and grandkids up with a very fine life
Netlist ran from .5 to 10 dollars. The next run is gonna be monstrous. All you gotta do is hangin there
I guess that is what "some people get" as posted last week by someone who, I guess gets it. I sure don't "get it". Enough already and bite the big one and upgrade or settle and move on. Even if Google might do a takeover, the price still goes up. I would rather have something now that I can work with than nothing but question marks about litigations that could drag on and on for centuries. As long as the venue is in California, in my opinion, nothing will ever be done.
NASDAQ!
Seems like it’s a never ending drip on this thing. No matter what news comes it gets pounded out right after. Pretty depressing for shareholders.
Nice article Dave. TIA
Wow great article
thanks Dave
I think that's the day when Google's automatic donation to the democrat judges fund goes through.
NASDAQ!
Finally something to get the conversation moving:
Netlist Eyes The Endgame In Crucial IP Lawsuits
Aug. 24, 2022 2:20 PM ETNetlist, Inc. (NLST)SSNNF, SSNLF, GOOG, GOOGL, MU
Summary
Netlist is advancing toward major turning points in three intellectual property lawsuits against tech behemoths.
Those cases are worth potentially multi-billions and could see resolution within 6-12 months.
Meanwhile, the business has grown more than 100% since 2021 and has room for further expansion.
The current share price is a solid entry before catalysts hit this fall.
Random access memory module on a dark background. The concept of lack of memory, poor mental process of a person, the need for self-development. Selective focus.
Lari Bat/iStock via Getty Images
Netlist, Inc. (OTCQB:NLST) is a maker of high-performance memory modules. The company is growing revenue substantially, preparing to launch new memory technology, and making progress in three major lawsuits against tech giants.
While some have doubted Netlist’s ability to pursue these suits, court documents suggest the endgame is rapidly approaching. In the meantime, investors have an opportunity to purchase the stock at depressed levels before what promises to be a busy fall season.
Legal Dominoes
Although far from a company focused on patent trolling, it makes the most sense to address the three large legal cases currently facing Netlist. These are against Samsung (OTCPK:SSNLF, OTCPK:SSNNF), Google (GOOG, GOOGL), and Micron (MU), all for infringement of various parents.
As of now, none of these companies have a license to use Netlist's products or IP. Last fall, Netlist won a critical ruling against Samsung that released them from the contract because of Samsung’s breach. Seeking Alpha author Gold Panda minimized this case by focusing on the minor aspect of it, namely the actual breach damages.
In that breach of contract case, Netlist asked to receive approximately $2.5 million in damages, totally unrelated to a license for their product or any patent infringement. A jury decided not to award them those damages, which are ultimately insignificant.
The bigger prize was confirmation that the contract is no longer in effect, meaning Samsung has no license to utilize Netlist's products or patents. Yet Samsung is using their products, and they also distribute those products to Google.
Samsung Running Out of Options
Note that Samsung is currently on the hook in Texas for infringement of seven different patents. For one of those patents, Samsung requested the Patent Trial and Appeal Board to complete an inter parties review (IPR). That request relates to Netlist's seminal 912 patent that was already reviewed and upheld by the PTAB in 2020 as part of the lawsuit against Google.
The law allows each individual party to request an IPR, although it is for the exact same patent and virtually identical applications as the Google case. Netlist contends that the 912 patent teachings can be found throughout the memory industry, including in the latest DDR5 standard.
So why did Samsung focus on the 912 patent in hopes of getting an IPR? Quite simply, the patent has been proven seminal. What that means is the technology is groundbreaking and that the industry needed it to advance forward. In short, Netlist owns a patent that proved a lynchpin in the success of Google and Samsung over the last decade.
And thus, Netlist sits in the catbird's seat waiting for the tech behemoths to agree on a settlement and licensing deal, or to face a jury and allow them to determine how much money should be awarded.
If you think I'm exaggerating these claims, you should by all means explore the patent and its ubiquity in Google's servers. When a judge asked for an independent examination of Google servers, it was found that every one of them contained a Netlist part.
Keeping the Pressure on Google
Further, Netlist won an important hearing this summer, where Google asked for intervening rights to minimize its liability. Judge Richard Seeborg, in California's Northern District, informed Google they would be liable for infringement damages going back more than 15 years.
Recently, after Samsung requested their IPR, Judge Seeborg granted Google a 90-day stay in the Netlist case that will likely hinge on whether the Patent Board grants an IPR to Samsung. If that happens, expect the share price could take a blow as investors grow impatient with the legal process.
Barring that delay, Netlist looks set to move ahead with discovery and to pursue a significant award or settlement with Google.
What to Look for This Fall
Lastly, there is another case in Texas against Micron, where Netlist has accused them of infringing multiple patents in its IP catalog. The jurisdiction is favorable for Netlist and could yield a positive settlement once Claim Construction is completed.
While the waiting feels interminable, there are signs of moving toward a resolution. One major hurdle stands in the way, which is the pending IPR request by Samsung on the 912 patent. If that review is granted, it will extend the timeline by another year (the length of time the board has to make a ruling on the review). Such a decision seems unlikely in the face of previous decisions, but it's a risk investors should be mindful of.
A decision is due October 21, and less than a week after that, there is a scheduled case management conference in California to move the Google case forward. Based on historical releases, investors should also get to see Q3 numbers by the first week of November, meaning it's going to be quite a busy couple of months coming up for the company and its shareholders.
Beyond the Lawsuits
It is also important for investors to understand that Netlist is not a business based on patent trolling and does not depend on these lawsuits for its future success. They are in their own right a high-quality memory module manufacturer.
Year-over-year revenues have grown by more than 100%, and the company is on track for over $200 million in sales this year, including $55.4 million posted in the recent second quarter.
And the future looks even brighter. Next year, Netlist will be launching its next generation of memory components focused around DDR5 and CXL memory products. In combination with their five-year partnership with SK Hynix, revenue should continue to grow steadily.
Moving Toward Profitability
For now, earnings are roughly flat, in large part due to a significant uptick in hiring and the ongoing legal costs. The hiring has been done in anticipation of rapid growth in business over the next year, and the legal costs, despite what the naysayers might believe, will not go on forever.
At the annual Roth Conference back in March, CEO C.K. Hong commented that he believes the lawsuits will be wrapped up in the next 12 to 18 months. Since that was nearly six months ago, the timeline has now been shortened to roughly a year or less.
Furthermore, genuine progress has been made in all three of the lawsuits, including a jury trial date of May 1st, 2023 in the Samsung case in Texas, a district notorious for moving expeditiously.
Stock Price Struggles
Year-to-date, NLST stock has declined by more than 50%, from over $6 to $3.
Although the share price has been in a difficult downward trend since peaking at $10 last summer, the fundamental value of the company already well exceeds the current price, and the potential for future growth is enormous.
Stripping away the lawsuits for a minute, and imagining that they have absolutely no value, the company trades at just over three times this year's sales, and probably only two or two-and-a-half times next year's sales. For an emerging growth technology company, that is too low.
The one-year chart shows the disconnect between climbing revenue and falling stock price.
Chart
NLST data by YCharts
Even in a bearish market, one that has turned away from tech companies over the past year, I believe a five-times sales valuation would be perfectly reasonable here. That would put the share price closer to $5 based on this year's sales figure, and again does not factor in much future growth or any potential deals or payments coming from the ongoing lawsuits.
The Road to Double Digits
Netlist briefly touched $10 per share last year, but it has come nowhere near that level since then. And the path to get back there will likely be bumpy and challenging. However, I see a very reasonable way for that to happen in the next 12 months. First, it will take continued sales and organic business growth, with a quarterly run rate in the 75 million range by this time next year.
In addition, investors will be looking for progress on the lawsuits. The best news would be any kind of settlement deal that includes both an upfront payment and an ongoing license. But if necessary, the company appears well-prepared to go all the way through a jury trial and await a decision about how much they will be awarded then.
Estimating the exact value of any kind of award is extremely difficult, and juries are notoriously unpredictable. That said, last year's deal with SK Hynix, which provided 42 million in upfront cash and a 5-year licensing deal, will have a total value somewhere in the neighborhood of $500 million.
That deal was small potatoes in comparison to what the company will be expecting from these other lawsuits. One of the reasons they accepted such a small upfront payment at the time was that their cash balance was low and they were concerned about having to dilute shares. With the current revenue and cash balance, those concerns are greatly diminished so that the company can be in a more advantageous position for future negotiations.
Again referring to Hong's comments made at the Roth conference in March, the CEO indicated that the value of each of the three lawsuits was worth "upwards of nine figures." Parsing those words, one implication is that upwards suggests "more than," meaning that each suit could be worth $1 billion or more.
Conclusion
Without getting too carried away, it's still fair to say that the three remaining suits are more valuable than the SK Hynix deal and could bring several hundred million in cash on top of many times that in ongoing licensing deals.
I, for one, look forward to this upcoming time as an opportunity for Netlist to resolve these ongoing lawsuits once and for all and to move forward as a solid and growing tech company with an incredibly bright future.
This article was written by
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Pale Horse Trading
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Individual investor with more than 12 years experience in the market, including seven years in biotechs, looking for well-managed companies with potential for large growth. High risk tolerance.
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Disclosure: I/we have a beneficial long position in the shares of NLST either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
if anyone is keeping up with court dates. i'd like to know if anything exciting for NLST on the docket between 9/5/2022 and and 9/9/2022
tia
This is a very true possibility. And makes alot of sense for Google to do influence court proceedings in such a way
I hear what your saying with the upgrade to nasdaq but i do disagree because once you introduce a board of directors it slows down decision making with so many different court cases on the go and leaves a possibility of google to buy out NLST. If google puts out a 10 billion dollar buyout lets say the other directors could over rule hongs decision. And this is personal for CK Hong as its been drug through the mud for far too long.
You are correct about the PR side. But, until we upgrade or settle with somebody the only people that are going to see the PRs is the OTC crowd. And for the most part, we already know what going on....just waiting for the litigations.
NASDAQ!
Some people get it.
Those that are loyal to the company will be rewarded. Set them and forget them.
This aa medium to long term hold. SK was a great solution. Share price will take care of itself in due time.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On August 16, 2022, Netlist, Inc. (the “Company”), held its 2022 Annual Meeting of Stockholders (the “Annual Meeting”) in Irvine, California. At the Annual Meeting, the Company’s stockholders voted on the following three proposals and cast their votes as described below.
1. Election of one Director.
The Company’s stockholders elected one director nominee to the Board of Directors, to serve until the next annual meeting or until his successor is duly elected or appointed and qualified.
Directors For Withheld Broker Non-Votes
Chun K. Hong 55,217,654 3,338,506 69,302,828
2. Ratification of Appointment of Independent Registered Public Accounting Firm.
The Company’s stockholders ratified the appointment of KMJ Corbin & Company LLP as the Company’s independent registered public accounting firm for fiscal year 2022.
For Against Abstain Broker Non-Votes
126,276,722 793,233 789,033 —
3. Approve, on an advisory basis, the compensation of the Company’s named executive officers.
The Company’s stockholders approved, on an advisory basis, the compensation of the Company’s named executive officers.
For Against Abstain Broker Non-Votes
49,827,102 7,487,780 1,241,278 69,302,828
I respectfully disagree. The more encouraging side of this is the operations and growth the company is currently experiencing. They have really taken off from the operational standpoint since the SK Hynix suit was closed out. The lawsuit could take much more time. Meanwhile the price dwindles with little to no PR activity while their fins have been very encouraging and they should put a spotlight on their achievements. My take is that they are hard at work and know where they are going and could care less about share price for now. Which is a bit unfair to current shareholders and they should keep that in mind as people don’t stay loyal forever.
I think I know what's going on, maybe, possibly (?). Right now NLST is all about the lawsuits and not so much about the company at hand. New PRs aren't going to change anything until real news comes out. Right now even good earnings doesn't move the needle. We need to hear either a settlement or Nasdaq. And with all of the judicial corruption going on, Nasdaq is our quickest and best way to move forward.
NASDAQ!
There is definitely loyalty on this stock. You can tell it's being shorted and still it's a slow drip instead of huge downswing days (knock on wood). Hopefully they do something to refine their PR which would go a long way in my opinion.
One thing chuck should realize is the loyalty that people have here and help the investor, on any day I can show ten stocks that have went from a $1.00 range up
300 500 % all while we all hold NLST..
Is that when the upgrade to Nasdaq is going to be announced? Otherwise it's probably just going to be another extension by Google judges.
Nasdaq or bust!
lawsuits that might not materialize for another gazillion years or so. Thanks.
about 6 wks wait and we should hear something that will make everyone happy happy happy
have to stay positive.
Excellent. It's about time NLST starts marketing itself like a real company on the big board and not relying upon the lawsuits that might not materialize for another gazillion years or so. Thanks.
Is Chuck going to be at the shareholder meeting tomorrow?
I’m gonna be there, I’ll put the question to him
You maybe right I have also thought its time.
Gdog, I agree with you. But, I think a good CEO can handle a BOD. We need to shake things up with a upgrade to Nasdaq.
As AllinFun said, we are going up and down possibly being shorted anyway at a lower price. Why not do it on the big board with more cash and a higher PPS. I think Chuck's a big boy and can handle himself and a BOD.
Go NASDAQ!
I wouldn't sell it to Google, but I would try and settle before the patent expires which us probably what Google is holding out for. If I have to settle for a little less, so be it. At least I got something and an outstanding company to go forward with. They have plenty of time and cash on their side to drag it out forever.
You can see how NLST could easily be trading at $100+ in a hurry. yes, i just wish it was yesterday!!!!
Single digit billions is more likely scenario here (settlement or award). Obviously award total could bloat due to 3x multiplier potential on willful infringement. However, being this company is currently sitting around $750 million MC that is huge upside just off of sheer cash award/settlement, not mentioning the huge revs to follow from royalties. You can see how NLST could easily be trading at $100+ in a hurry.
Goog deserves giving up half co to NetList. But a sell of the 912 P. For 90b in the real world is good business.
I don't think it can get much worse than the current manipulation. This thing gets pounded everyday for a couple more % points as there is little support on most days and then it just flies up 20-40% over a couple days to then bleed off for weeks again. It's pretty frustrating, but easy to hold knowing what is coming.
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