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Why not go to court now
I think the problem is that if they go to court now (or at any time), they have to bring in 'all matters in controversy' or 'compulsory claims' in the same case. This would also apply to counterclaims or cross claims by defendant(s). i.e. If the defendant(s) have a claim that arises from a case, they have to file them at that time, they can't wait for the case to finish and then file another case later on the claims.
If they go to court now, WDDD has to file with all of the claims when they file. If some of the claims in a patent can't be used right now, because of the PTAB decision, then they might not be able to refile the case later on those claims because all of the claims on a patent, I would expect, need to be filed at the same time in the same case.
Louis J. Desy Jr.
Low priced stocks and CAFC expected time
I am just telling you what I see and why it looks like that.
The reason they are generalizations is because usually when you see things in WDDD that happened elsewhere, it is probably going to happen with WDDD also.
Right now there is no good news that will happen for months since the only thing going on will be the CAFC process.
http://www.cafc.uscourts.gov/sites/default/files/YTD_Activity_November_2016.pdf
Looking at that it looks like it will take the case at least six months from filing to complete on average.
Nov 2016
Started with 578 cases, added 111, disposed of 95, leaving 594 cases. Divide that by the monthly disposal rate and you get an expected time of 6.2 months.
Louis J. Desy Jr.
Chap 11 or Chap 7?
I think it will play out like Radio Shack did in 2015. They will start off with a Chap 11 filing, then sell off what is left of the assets (stores and brand names), then whatever is left will get converted into a Chapter 7 liquidation.
The name Sears may 'live on' as part of another company, but it will just be a label and have nothing of value associated with it.
Louis J. Desy Jr.
As a side note, I still think Sprint buying the Radio Shack name and setting up stores within stores a complete waste of money. If people do not want to shop at Sprint, then figure out why not and fix that, don't go buy another dead name and think that will somehow fix the problem!
Strategic partnerships or possible settlement
Strategic partnerships. I would expect that would be an investor or fund that would be willing to allocate part of their portfolio into something long term, with a payoff expected around 2020.
Settlements. I do not expect anyone except ATVI would even consider any settlement until the case with ATVI is over, or at least near the end of a trial. The way with things taking so long, it is possible that any other potential infringer would never have to pay anything, even if they are infringing, since the case with ATVI may take so long that even a six year look back could age out of what would be actionable in a court.
ATVI shows no signs of making an offer to settle since they seem to be getting all kinds of delays with the case and chipping away at the claims and time frame for infringement.
I think it is possible that other companies are supporting ATVI efforts to drag the case out, since if the case gets dragged out long enough, no other infringer would have to pay.
Louis J. Desy Jr.
Why people still buying?
If you look, it is only like 10,000 shares or so that traded at $0.001, so we are talking $10 worth.
The company lost their license for the oil rights they had. So now there is only a lot of liabilities with no assets. There is some kind of E&O insurance that apparently is paying off, but that will go towards the debt. The common shares are in line for zero, along with the unsecured creditors.
The reasons:
1: Some people do not know any better. They have no idea what the company is worth and do not understand the Chap 11 process.
2: Some people may be painting the tape. With the price and volume so low, it is possible to make the price jump with small buys. The hope is that if you accumulated a block of shares in the past weeks, and then can make the price jump, you will fool the retail market into thinking that something is going on and get the muppets to pile in, at which point you unload your shares for a profit.
3: Many people are just holding because they are down so much already. I think a number of people figure that there is no point is selling to get what little they can, with the hope that something happened and they can get more at some point. That is why I think the number of shares on the ask is so low. There are only 10,000 on the ask, and 10,000 on the bid at $0.01/$0.02.
Louis J. Desy Jr.
News going forward
1: It will be at least a year before the CAFC appeal is done, so 2017 looks like it is 'out' for having any good news, and probably not be until 2018 that the CAFC will be done.
2: The best news that can result from the CAFC appeal will be that WDDD got back the claims that the PTAB invalidated, which was where they were prior to the PTAB process starting months ago.
3: Once the CAFC appeal is done, then maybe a trial can finally be scheduled in 2018, with completion in 2019. Completion of the trial in 2019 would be the only good news that I expect would move the stock.
Louis J. Desy Jr.
Six year look back
IF WDDD ever files another lawsuit, then they might be able to apply a six year look back. The problem is that this case is now going on five years now and does not even have a trial date yet. Considering that the CAFC process will take a year, the trial (if it finally gets held) another year, and then the appeal another year, that will be 2020 that any judgement would be collected at the earliest.
It is from that point that new cases could be filed and the six year look back be done.
I do think there is a good chance that the six year look back may not apply since VRNG ran into a like situation also. They were not allowed to go back six years because it was held that they knew about the infringement but did not file a lawsuit for years.
Even if WDDD is allowed to look back six years, the years are simply slipping by with no other lawsuits being filed.
That is why I limited my calculations to an expected judgement from the one case against ATVI.
Louis J. Desy Jr.
Reasons why the price is going down.
1: An additional 35 million common shares (or more) are being issued to cover the costs to appeal the PTAB invalidating some patent claims to the CAFC. It seems that a lot of people were expecting WDDD was not going to have any claims invalidated, and instead now has to go through an appeal process to get those patent claims back. There is also the risk that the invalidated claims are not coming back, meaning there will be less claims to use at trial someday.
2: The time to go through the CAFC will delay the trial for at least another year, so that will reduce the present value of any expected award. Depending on what people think the present value rate should be per year, that cuts off probably at least 10% of the value for losing another year on any final judgement. (i.e. Collecting a judgement X years plus an additional year is less valuable than collecting a judgement in X years.)
Louis J. Desy Jr.
Is that bad?
They just need a little more time. I am sure after they sell off the few remaining brand names that everything will be fine.
Louis J. Desy Jr.
P.S. Anyone want to start taking bets on the day they will file for Chapter 11?
My update to estimate for damages
I am updating my 09/05/2016 estimate for damages to take into account the expected 35 million shares to be issued for the CAFC appeal costs.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124969183
With update to add 35 million shares issued.
Older damages estimates
I found an older posting at:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=87277552
from Friday, 04/26/13;
which seemed to be as good as anyone could do or come up with at the time.
It looks like it was something before I had started to take part in the conversations on IHub, prior to the summary judgement ruling, and prior to the VRNG vs GOOG decision.
Back then people seemed to think the going forward from filing date to end of 2018 royalties would be at least $142 million.
The case is on contingency, so WDDD gets about 60% of that for $85 million.
Common shares are at 210 million plus another 35 million shares for a total of 245 million shares, and I expect the trial plus appeals to be a decade from the filing in 2012 and expect that the company will need to issue 25 million shares per year, on average to get to the end of the whole thing for another 175 million common shares in total, bringing total common shares count to 420 million common shares.
There is a retained earnings deficit of around $41 million, that may reduce any taxes, or allow WDDD to payout case without it being taxable to shareholders as a 'return of capital' instead of a dividend from profits and taxable, so hopefully only $45 million of the $85 million would be taxed, and leaving the company with $70 million in cash to pay out.
That means that per share cash will be $70 million / 420 million common shares or $0.166/share or somewhere around there if things go this way.
The problem is that any number of things could happen that could 'kill the case' along the way, but if somehow WDDD can get through a trial and appeal process, as long as any one of the patent claims survive all challenges, then ATVI would be liable for damages.
This is why one of the tactics that ATVI is using (and other do, like GOOG in the VRNG case) is that they will keep trying different paths and tactics to 'chip away' at the infringing claims. Every time another claims on the patent gets invalidated or held to not apply, is one less things that can be used against them at trial.
Louis J. Desy Jr.
Authorized shares, 500MM? One billion? How many?
I wonder how many shares the company will increase its authorized count to? 500 million? One billion? More?
For purposes of discussion. I am talking about pre reverse split, in order to keep it easier to make pre reverse split and post reverse split comparisons easier.
At least it will not seem so bad post split, since even one billion shares pre split will end up as 'only' 50 million shares post split and keep down the annual corporate charter fees each year.
Louis J. Desy Jr.
"Any dilution going forward will be tiny." Really?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=126956374
Dilution
YOU said they would NEVER need to issue anymore shares to get to the end of the trial.
I said that they would need to issue at least, on average, 25 million more common shares by next summer.
Instead, they are issuing 10 million common shares over that PLUS the case is now going to take a detour through the CAFC to try to get back some of the claims they lost with the PTAB.
Louis J. Desy Jr.
CAFC adds more delay
I have not exactly followed the PTAB, but my understanding is that while WDDD did finally get through that obstacle, WDDD did suffer a loss on some of the claims, so now they are going to file an appeal to undo that.
Originally, I was arguing that getting through the PTAB would have been at best neutral since the best outcome was to not lose any of the claims. Instead, WDDD lost some of the claims and will now have to fight in another court to get them back, plus lose months worth of time to do that.
Louis J. Desy Jr.
Issuing additional shares
I seem to recall that some people said weeks ago, that the company didn't need to issue any more shares, and now just a few months later, we now have the company issuing 35+ million more shares plus a reverse split.
Louis J. Desy Jr.
Reverse stock splits do usually decline
Many investors do view a reverse stock split as a bad event, and most of the time a reverse stock split does accompany a decline in the stock price.
Part of the reason is that the company is usually already have a number of other problems, so the company doing a reverse stock split does not help since it just allows the shares to fall from a higher price.
Other parts of the reason are that a number of investors, who were happy to trade larger blocks of shares at a lower price, now have that cut down by the smaller amount of shares that are at a higher price.
While it should not matter if one is buying 20,000 shares at $1/share verse 1000 shares at $20/share, you will find that people will be less careless trading a stock when it is at a higher price per share.
Louis J. Desy Jr.
The existing Common shares are DEAD
The first proposed reorg plan was filed. The existing common, and the 2066 covertibiles are getting NOTHING.
While it is possible that maybe something will change with the plan, the existing common is still going to get zero because there are simply too many classes ahead of the common.
While it will still be a few months, at some point in 2017, the plan will be approved and confirmed with the court. Once that happens the common will stop trading, maybe in the middle of the trading day, delisted and cancelled.
Louis J. Desy Jr.
More like delisting
I think it will be more likely that the company is delisted.
There is no company charter and all of the assets are gone.
Te only reason Adam does not get sued is that he is already in jail and out of money, and up on charges far worse than running a stock scam.
Louis J. Desy Jr.
Real treat? Shorts playing?
People, the first proposed reorg plan has been filed. The common shares, plus the 2066 convertibles, are getting nothing.
While there could be some changes to the plan, the only way for the common shares to get anything, the 2066 convertibles would have to get something first, which is not going to happen.
The stock will be dead and gone way before end of 2017, once a final plan gets confirmed.
Louis J. Desy Jr.
Common shares are dead
Well, that was quite the roller coaster.
Down to zero and cancel!
Louis J. Desy Jr.
Docket #1820 proposed plan
Court Docket: #1820 Date Filed: 12/22/2016
Joint Plan of Reorganization of Debtors and Debtors in Possession:
http://www.kccllc.net/peabody/document/1642529161222000000000022
Peabody Energy Completes Key Milestone Toward Emergence From Chapter 11; Files Plan Of Reorganization And Disclosure Statement
http://www.peabodyenergy.com/content/120/press-releases
The big item is that the common shares are going to be canceled. While this is a proposed plan, it looks like a number of classes that are higher in priority are not being made whole, so even with changes, the common stock will probably still be canceled.
1: The existing common shares are cancelled.
Warrants and R/S
Normally, there is language that the warrants would adjust for any stock splits.
So if the 35 million warrants, with an exercise price of $0.012 were held until after a 1:20 reverse split, then:
1: The 35 million warrants would be 1.75 million warrants (35/ 20 )
2: The exercise price would be $0.24 ( 0.12 * 20 )
And the proportion of common shares due/owned by the warrant holders would stay the same after the R/S as before.
Louis J. Desy Jr.
Not sure that was the 35 million shares sold
I tend to think that the volume was not the 35 million in warrants, since even with the PTAB result, I would expect to see the stock price drop if 35 million shares were all dropped onto the retail market within a few weeks. Prior periods of selling of, what appeared to be converted shares, usually had large volume with price drops.
It looks like that the 35 million shares have not been sold off yet.
There is also a question as to if only 35 million shares are going to be issued, since they are increasing the outstanding share count.
Louis J. Desy Jr.
Oil prices drop every time there is a supply report
It looks like when there are agreements announced, the price spikes; but then a rig count or inventory report comes out and shows an over supply, and the price drops.
Louis J. Desy Jr.
Why still listed?
Anyone have any idea why the company is still listed? Is someone planning on doing anything with the company at some point?
Louis J. Desy Jr.
Dilution of at least 19%
I reread the press release, while few details are given, they do mention the authorized shares will need to be increased above the current allowed 250MM. There are (were?) 210MM shares outstanding, so the dilution is at least 19%, and is going to be more depending on how many shares are issued.
The one good thing, is that as long as it is a reasonable amount of money raised, is this could be the last dilution needed to get to the end of a trial. I also think that having enough money on hand would make it more likely that ATVI would settle, since trying to wait for the company to run out of money would not work.
Louis J. Desy Jr.
Reverse split and listing only
Back in 2012 that was the expectation and plan. Once WDDD got to a certain point in the process, they would do a reverse split to get the stock up to or over $3/share. That would allow the shares to be traded on margin, and allow other classes of investors to buy the shares. It was not expected, back then, that there would be any dilution. If anything, since things were expected to be going their way, it was expected the stock would have been trading up.
What is happening now is almost the reverse of that.
One good item, is that the press release does mention that they will have enough to go two years, so that should take them to the end of any district court trial and maybe even though an appeal.
I will look to see if we can tell how much dilution there will be.
Louis J. Desy Jr.
The report looks like a disaster
Everything is going in the wrong direction:
Revenue is down, even same store sales is down, showing that existing stores are not becoming more efficient or running better
Losses are up, even closing a lot of stores did not reduce the overall loss
They are planning on selling off the last of their brand names and real estate, but what good will that do if it is just going to be dumped into trying to save the money losing retail stores.
Margins are down, so the company is getting less efficient.
It does look like the end will come sometime in 2017. I can't see vendors extending credit after the end of this holiday season.
I can see the company deciding to file Chapter 11 just after the holiday season is over (Jan or Feb 2017?), since at that point the company would have the most cash stockpiled from all of the holiday sales, but not paid any vendors for any of the inventory, leaving the vendors as unsecured creditors in a filing.
It would also allow them to direct the sale of the real estate and brand names towards the more secured debt holders instead of being used to pay off the unsecured vendor payables.
I think any vendor that has open terms with anything related to Sears has got to be either out of their minds or engaged in charitable giving for when the company finally goes Chapter 11 and leaves the unsecured liabilities with a repayment of zero.
I still find it hard to believe that a company that was, at one point (late 1970s/early 1980s) was once a financial powerhouse and even though to about to become a 'one stop place' for anything a person could want or need. That was about the time that it looked like they were going to offer banking and other financial services within the stores, plus their own credit card that would have been on the same level as Visa, Mastercard or American Express.
Louis J. Desy Jr.
Oil price up on OPEC cut?
It looks like oil got near $50 on the cuts, but hard to tell if this will stay at $50 or drop over the next week.
Louis J. Desy Jr.
Broker finding shares
Anyone with any sense of how little the company is worth should be glad to sell out at the now current bid of $116 (still halted), and say, "Bless the muppets" for rushing in to save the stock.
Considering that the company just did a reverse 1:15 split a while ago, I would think that there would be holders of the stock glad to get out on a spike like this.
Louis J. Desy Jr.
Annual meeting delayed
Not exactly sure why, but it looks like the annual meeting and the proposed merger have both been delayed with the filing of a TRO (Temporary Restraining Order).
8K report about delay:
http://ih.advfn.com/p.php?pid=nmona&article=72780441
The order is in effect for 60 days until after other issues are ruled on.
No idea how long that could be or exactly what is going on, at this time, but I would think it is not a good sign for the stock to have the annual meeting delayed.
What ever is going on, it is clear that insiders of the company are having some kind of big legal fight, which is usually never good for any stock price.
Louis J. Desy Jr.
Preferreds lock up doesn't matter
If the insiders are still holding millions of shares that they were not able to unload with the SirenGPS run, there would be no way to sell off more shares by converting the preferred yet.
No 10Q/K report shows the company with any revenue, so far.
For some reason the Q3 2016 10Q report is not out yet, and through 06/30/2016 revenue is zero.
I expect that when the company finally shows some revenue, and the insiders unload the decorative common shares they have left from the SirenGPS run, that the conversions will start, the company will put out a massive PR programs, and start corralling in the muppets to buy up the shares.
Louis J. Desy Jr.
Busted?
I am not sure what you mean, could you elaborate?
I see that the stock is almost dead at $0.0003.
One possibility, that did not occur to me until I saw how the stock is still going no where, is that there were tens of millions of shares the insiders were unable to dump on the retail market from the SirenGPS fiasco, so the insiders are 'running' GoodGaming in order to be able to offload all the shares they still have available.
This would also explain why there has been no increase in the authorized shares yet since why bother increasing the authorized share count when the insiders still have truckloads of the decorative common shares to dump onto the muppets still?
At some point the truckloads of decorative common shares will be sold off from the insiders, then will be the time to increase the authorized shares and start the conversion in order to have more shares to off load onto the muppets.
Louis J. Desy Jr.
What next?
I think the stock is going to trade sideways for a number of weeks, until one of the asset sales kicks the support out from the stock.
While the financial statements are still showing some equity for the common shares, I expect at some point there will be a big loss on sale of some assets or a write down, and then the equity will get wiped out.
There may still be some swings left to trade, especially with the muppets thinking the common shares are a great buy now that the company is in bankruptcy, but in the end after the Chap 11 is done, it will be a disaster for the existing common shares.
Louis J. Desy Jr.
Option trading on BTUUQ
Since the company is in bankruptcy, the only trading allowed are transactions to close positions; i.e No writing new call or put contracts so unless you had options prior to the filing you can't buy any options.
The trading that is going on is just people selling contracts they already own to people that have contracts that are open, or people exercising contracts they own.
You should notice or see that the total number of open positions will be dropping each day as contracts are closed out or exercised.
Louis J. Desy Jr.
What Happens To Options During Bankruptcy?
http://www.optiontradingpedia.com/what_happens_to_options_during_bankruptcy.htm
Taking a tax loss
One thing that I was not aware of, until I saw what was going on over at BDGR and here at OOAG, is that if a stock no longer trades and you are no longer able to sell the shares to anyone, you can ask your brokerage firm to take them from you.
What happens is that you give your shares to the firm for nothing, which closes the trade and allows you to claim the loss on your taxes for that year.
Until I saw stock like OOAG, it is not something I would have expected to need to know, since it is bad enough to lose most of your money on a trade, it is even worse to not be able to claim the loss on your taxes and at least recover some of the loss.
Louis J. Desy Jr.
Exact day
With the liquidation process, there is no exact timeline or exact ending date. The only date that was definite was that anyone with a claim had to file by 05/31/2016. After that it is how long it takes the trustee to look at the case and do the work plus sending out any required notices. It is not unusual for the process to take months, but at some point all of the work will be done, the liquidation proceeds distributed, and that will be it. At that point a final distribution report will be entered on the docket and the shares cancelled.
If this was a Chapter 11 proceeding, then it would be much easier to tell when the end would come, since there would be an court date announced for the confirmation of the plan, after which a ten (eight?) day appeal timeline would run, and then the court would enter an order with the effective date; at which point the shares would be canceled.
Here in a chapter 7 proceeding, there is no definite timeline, but it does not really matter since earlier messages mentioned that the trading in FEECQ has been suspended for lack of reporting.
While in theory one does still own shares and could trade them off of the exchange, it is hard to believe that anyone would buy shares in a company that no longer trades and is being liquidated with nothing expected for the common shares.
Louis J. Desy Jr.
Blair interview and DB
I think the reason she does not tell everyone how bad the situation is, is because she does not want to start a panic. Even at this late hour, if DB would 'straighten up' and stop doing stupid stuff, they could be saved. If she went out there and told people that DB was a mess, it could start a panic that would finish off DB, and take large parts of the banking system with it when trading froze up and no one wanted to buy anything.
The problem of course, is that they will continue to do stupid stuff until the whole bank 'train wrecks' itself. That is the real problem. It is one thing to do something stupid but learn from the mistake and fix things so it does not happen again. It is another to keep doing stupid stuff and not do anything to fix the situation, and only stop when everything is a wreck.
That is the problem with DB. I, and others, are amazed that with all of the illegal things they were/are doing, that they still can't make any amount of real money.
The $256 million in profit, with a trading book in excess of $40T in derivatives is less then one hundredths of a percent (0.0000064). The while idea of leveraging up like that was so that you would make a lot more money than just trading on the unlevered assets.
DB results are so poor that it is almost like someone is deliberately trying to ruin the banking system.
Louis J. Desy Jr.
Shelia Blair interview
I think you meant FDIC, not SEC; but in all fairness to her, you couldn't really expect her to say anything else, could you?
IF DB would 'get its act together', stop doing stupid stuff, started to make money, and closed out its large trading book, it could be all right.
The only problem, is that as soon as it looks like the crisis is over, they go leverage up, in order to make as much money as possible, meaning that until they have a Lehman like implosion, they keep leverage way up.
Louis J. Desy Jr.
Bounce
I would expect a day or two bounce after the amount it has fallen.
Louis J. Desy Jr.