Prism Technologies Group Inc fka PRZM

[nfp]

Question for wiser legal minds than me re upcoming T-Mobile vs PRZM oral arguments:

http://www.cafc.uscourts.gov/argument/upcoming-oral-arguments
Panel H: Wednesday, June 07, 2017, 10:00 A.M., Courtroom Courtroom 402
16-2031 DCT Prism Technologies LLC v. T-Mobile USA, Inc. [argued]
Is there any potential advantage (or disadvantage) to Sprint in waiting to see how this goes?
Or will they be flat out of time by then?

[nfp]

There is some risk & stranger things have happened.
But i'd say the odds of en banc or supreme reversal are low-mid single digits at best
Especially as the opinion was so tightly written to cover all possible loopholes ;)
So I'd say the issue with the stock is simply that it's not widely held or followed.
Plus a lot of daytraders were in it & got bored with it.

I continue to believe its worth over $2/share with the S cash & interest.
What gets really interesting next though is what Verizon decides to do.
Granted the Sprint precedent, they would be advised to settle.
With a higher market share they have much much more at risk than S
As well as being up against a precedent that will likely be hard to wriggle out of.
If they have any sense they'll settle quickly rather than taunting PRZM to go all the way again.
Then there's also a ragbag of other patents some of which appear to have promise that I haven't studied in detail.
Honestly if Verizon had any sense they'd offer to buy the whole company for ~$50 million while they still can.
I believe that would make the stock worth ~$5/share after the remaining payments due to the old Prism shareholders--I'm sure everyone would be happy with that if they can close it before the S decision;)

The challenge with these plays as you know is that they're binary "all or nothing" situations.
But the odds here look very good indeed!

[Alvato]

Agreed. Likely outcome but not only outcome in my mind is as follows.
Motions denied by about end of month. Sprint will then move before Supreme Court and Federal Circuit for a stay of the mandate. Should be quickly denied. Mandate issues around May 10. Few days later Prism moves before the district court to execute on the outstanding bond. Sprint opposes on grounds stipulation allowing for entry of bond in the first place mentioned stay of execution till end of all appeals. Likely denied much like in Wellogix v. BP America. Prism gets check around May 20.

Of course, Sprint will still file a cert petition before 90 day window following denial of en banc motion. Has no real chance of being granted.

Given Prism very likely receives a substantial check in about 5 weeks I don't understand why stock price is not higher. Any thoughts?

[nfp]

So I guess Sprint's strategy is to just keep making the same point over and over again in the hope that will trigger a different result?
https://www.law360.com/articles/910626/sprint-seeks-new-fed-circ-review-of-30m-patent-trial-loss
Seems unlikely

[nfp]

Got it. Thanks @alvato.
I like your best case but am guessing Sprint will wait til the last possible minute to pay up--though I doubt that they'll come through with an actual appeal as that might just be throwing good money after bad.

[Alvato]

The deadline for filing a cert petition is 90 days from the March 6 decision. It runs separate from the 30 day deadline. However, once the 30 day deadline runs(and assuming no motion by Sprint) the mandate will issue to the district court regardless of the filing of a cert petition. Sprint also could file a motion to stay issuance of the mandate pending the cert petition. In any case, I expect all of these motions to be denied. Worst case we have to wait for the cert petition to be denied about 16 weeks from now. Best case Sprint gives up and the mandate issues by about April 12.

[KOmani]

Sorry, I didn't see this.

I thought we would get the final order from the appeal court and then Sprint COULD appeal that.

I am not a lawyer, but perhaps you are better versed than me.

Anyways, looks like the $0.70s selling is just about done.

[nfp]

Great to know. Thanks Alvato. So does that mean that if Sprint does not file for en banc or supreme court reconsideration by April 6 they have to pay up?

[Alvato]

The errata filing does not reset the clock.

[nfp]

Good to know: thanks @Alvato.
So can we assume that the 3/15 correction of the typo in the judge's opinion doesn't "reset the clock" on that 30 day time limit for Sprint?

[Alvato]

Sprint has 30 days from the March 6 judgment in which to move for a rehearing or en banc consideration. Assuming no motion is filed the mandate will issue 7 days later.

[nfp]

@KOmani--weren't we expecting a final determination today?
Looks like the judge is focusing on making the position bullet proof to pre-empt an appeal.
It was already very tightly written to dismiss all of Sprint's objections.
Last week he even refiled it just to correct a typo:
http://www.cafc.uscourts.gov/opinions-orders?populate=16-1456&field_origin_value=All&field_report_type_value=All&field_date_dropdown=date_range
Does that refile reset the final judgement clock?

[nfp]

Agreed.
Makes sense to me.
Unless Sprint has suddenly gained such an extraordinarily strong DC presence that they have some previously unforseen clout on appeal, I think it's safe to assume that this money is in the bank even though the stock price wont reflect it for another 3-4 weeks.

[KOmani]

I am fairly certain that it will just provide total numbers.

But I am not a lawyer, my understanding is from basic online research that I hope is correct.

Just like I bought and held PRZM with the belief that they would win the appeal. (Well, more than 20% likely.)

Well, it's not really winning the appeal. It's more that the courts don't like to reverse decisions unless there is something extremely wrong or biased.

Just like the other appeal cases recently disclosed. Yes, PRZM lost those cases, but someone had already decided something. Once a decision is made, it is more difficult to change - unless the judge was prejudiced in some way.

[nfp]

Thanks--that's quite helpful.
Does final judgement ever change from the written opinion?
Or does it generally just slap in the latest numbers for interest owed?

[KOmani]

I believe they have 15 days after the final judgment to speak up.

And I believe final judgment is due by March 20 ....

That puts us around April 4th.

[nfp]

Got it. Nice. That would be a double opportunity--load up on more PRZM, if stock declines when Sprint decides to appeal/double whammy pay off when Sprint loses & is fined extra for wasting the court's time ;)
How long does Sprint have to announce that they're appealing? Is there a drop dead date for that?

[KOmani]

Well, this was the first formal appeal.

So, I think their is some leeway on standards.

If they were to continue with a very shaky story, then the courts may fine them for essentially wasting time.

[nfp]

How likely is that?
Didnt happen this time even though the judge called Sprint on a bunch of stuff...

[KOmani]

Personally I would like to see Sprint hit with some penalty for deliberately dragging the proceedings if they kept appealing - instead of paying.

For someone like Sprint, they can withstand a long battle. It discourages others from filing similar suits.

[nfp]

Re risk: I'm assuming that the only risk at this point is that Sprint takes this to the Supreme Court, which of course they're entitled to do but which seems very unlikely based on the very watertight cafc opinion: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-1456.Opinion.3-2-2017.1.PDF
If Sprint did take it to the Supremes there's certainly the annoyance of further delay but their odds of winning are surely so low that they wont spend the money?! Is there a risk I'm missing here?

[KOmani]

As I mentioned elsewhere, we are in limbo.

I believe the court has until March 20 to issue a final judgment with amounts. Sprint than has 15 days (April 4th?) from the final judgment to file an appeal.

I still think someone wants a cheap buy-in and that is why we are below $1 ... they are hoping some people bail.

Some risk has been removed which is why we are not $0.30 right now.
But there is still some risk, which is why are not $1.20-$1.50 (or higher).

I hope everyone is enjoying their weekend.

I know that I sleep a little better knowing that we won the appeal and hopefully I don't become sleepless again. LOL.

[Quintessence]

L2 showing .91 on the ASK now. Way undervalued in light of the favorable court ruling.

[nfp]

Don't sweat it. 50K shares at .95 is $$47,500 worth of stock.
Someone will pick that up when the stock's ready to move towards the value of its cash ($1.75-2.00)
After that next catalyst will be news on the telco patents: T-Mobile, US Cellular & Verizon.
Perhaps a $3-$4 target in the next 12 months is reasonable?
Finally there's the rest of the patents--would love to see some analysis of their value.

[KOmani]

The guy with the 50K share order is helping us stay in the $0.80s

Why buy 5,000 shares when someone wants to sell 50,000?

[Quintessence]

I agree. Looking good today. Great SS.

Authorized Shares 25,000,000 a/o Feb 01, 2017
Outstanding Shares 10,073,751 a/o Feb 01, 2017
Float 8,889,495 a/o Feb 01, 2017

[nfp]

Agreed. The most bullish possible scenario would be if the S result scares T-Mobile into settling rather than taking their chances on PRZM's appeal. That would put a lot of pressure on Verizon!

[BLULLISH]

I AGRE-VERIZON AND TMOBILE LIKELY GOING TO SETTLE $PRZM QUICK AND THEY ARE THE REAL BIG ONES. TMOBILE AND VERIZON ARE LIKE 5 TIMES BIGGER THAN SPRINT, SO THE SETTLEMENT AMOUNTS WILL BE MUCH LARGER THAN 30 MILLION DOLLARS.

[nfp]

Yup agree re binary events.
Gambling instinct--but as I said at the time the audio file of the court proceedings made the odds a lot better than 50/50.
That said I still couldn't bring myself to put more than ~3% of my portfolio into PRZM.
Im pretty sure PRZM stock will run up to the value of the cash once they announce S has paid the money;)

[KOmani]

Watch Market Maker DLNY

If they keep the ask down, I believe that someone is trying to load up cheap.

Again, they don't want to sell shares, they want you to sell.

[KOmani]

I will say that this sort of proves that holding for some binary event is usually not worth it.

As you can see, someone could have bought at $0.70-0.75 after the court announcement.

This means for someone buying at $0.35, they had a 100% gain.

However, if the news was opposite, this likely would have gone to $0.10 if not lower, thus a 71% loss.

Kind of crazy that we risked 70% to possibly gain 100%

Of course, I feel we should go higher. My point is that holding through all that was probably not worth it.

Binary stocks are not worth the risk. Better to wait for the news and then act.

There are probably people on the sidelines who want to buy-in now that the news is out.

Again, the 8-K gives this some official weight and I believe we should trend higher.

[KOmani]

Also note that another IP stock on the NASDAQ is going crazy last night and today.

PRZM could go on a sympathy run.

I know it should be the other way around as we actually have a judgment, but for now we are OTC .... so when the NASDAQ dog runs we are the tail that wags along.

[KOmani]

I feel like the 8-K brings some official feeling to the news for the company.

I don't know if you remember this, but when I posted the delisting PR - and the company's website said it was delisting as well - a lot of people doubted it until the 8-K came out and said the exact same thing.

Yes, you and I and others actively watching the stock know what happened, but the news probably didn't get out as much as we would have liked.

The 8-K filing gives it legitimacy and many more people are willing to trust an SEC filing over a PR.

Of course, the CAFC is an official source as well, but in this case, it just gives the information in the 8-K even more credibility.

[nfp]

Makes sense.
It doesn't look like $S can go to the supremes.
So they'll hopefully just pay up?!
In which case the stock is trading at quite a bit under 1/2 its net cash after that event.
Not really brain surgery to see it can't go much lower than this.
But that the upside is a lot more than double granted the cases to come.
Of course you can't fix stupid.
But time usually helps a lot;)

[KOmani]

Level 2 Data basically said some trader was trying to unload the whole afternoon.

When they removed their order, it started to bounce.

Of course, they came back with their order and we stalled again.

Towards the end of the day (after 3pm) ....

It was $0.78 bid with that large order on the ask at $0.83 and then a gap until $0.95

Retail traders are being skinned for being impatient.

You held the stock and the news came.

Now, we have to wait for the news to sink in and buyers to take us up.

Market Maker DLNY is jumping the queue on the ask side because the spread is very wide. They don't want to sell - they want you to panic sell.

I am pretty sure that this is being held because someone wants to get some cheap shares.

The news has come ... but those that weren't in, want in for a low price.

[nfp]

PRZM just filed with the SEC
Basically just the PR release:
http://ir.przmgroup.com/secfiling.cfm?filingid=1437749-17-3946&CIK=1077370
Don't think we'll get any more right now.
Time for the rest of the daytraders to say goodbye:
so that the stock can start to drift up towards its underlying cash + patent suit prospects....

[KOmani]

Good job to the guy leaving the 35K order out there.

Everyone is waiting for them to just bail now.

[MWM]

Hoping for $2 today! $PRZM

[KOmani]

Well, the company has said $2 Million pre-trial and $2 Million post-trial.

Even if it is split, it will just about pay the gain on those expensive loans they handed out.

To be fair they needed the loans, but they did cost quite a bit.

[nfp]

Thanks.
Yes Verizon is the big one.
It may have to wait til the T-Mobile appeal is decided.
But it may also be possible to get Verizon and/or US Cellular to settle before then.
I didn't factor the pre and post judgement interest into my calculations.
So that $1.50 - $2 short term range could perhaps be raised to $2 (depending on how the contingent payments treat interest--does that all go to PRZM or is it shared equally?)
More importantly, perhaps PRZM is now be big enough to attract informed analysis of the remaining patents?!

[KOmani]

Here is the official PR:

http://www.prweb.com/releases/2017/03/prweb14125282.htm

PRZM has utilized PRWeb for other recent releases.

[nfp]

Very solid for $1.50 to $2 range once the dust has settled and the daytraders have gone.
But that's just based on the value of the Sprint cash. I'm not yet clear whether the 12 month target should be $3 or $5 or somewhere in between. though those numbers require more settlements like the AT&T settlement, plus someone needs to do a decent analysis of the other patents, now PRZM has the money to pursue them ....

[MWM]

Looks very solid then!

[nfp]

yes pre pay cut salaries are reasonable----they were cut and will go back up.
the contingent liabilities on the old prism patents are a bigger issue than debt.
but the telco patents alone will more than blow through those.
and i believe PRZM gets something like 100% of the first $16 million and a 1/3 of the next $50 million.
then of course 100% thereafter. (rough #s/memory--check 10ks)
i think they owe a contingent $1.25m payment on the $500k loan they just took out.
not sure about additional debt. not a big #. $3 million tops?

[MWM]

Nice Surge through $1!

[MWM]

I just flew through their last 10Q, seems like they run a smooth ship without a lot of cash burn.

What is the total debt?

[nfp]

Yup--it's not brain surgery to justify a stock price of $1.50--$2 right now.
Needs a smarter legal mind than me to calculate the real upside.
I've been saying $3 but I fear that's overly conservative on the telco patents and also puts a value of $0 on the rest of the patent portfolio, as they haven't been pursued vigorously enough yet for me to justify an opinion.

[MWM]

Looks like $1 is coming fast!

[MWM]

I'm in at .88, looks very strong here!

[nfp]

Yup. once "traders" who are looking for a fast buck (literally) but willing to settle for quite a bit less are replaced by investors who are looking for $1.50 with an eye to quite a bit more, it shouldn't be hard to move to a $1.50--$2 range ;)