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Does our vote really matter?
If it does, then executive compensation pack would have been voted down every year then.
30M last dash budget (avg .20 cents) seems extremely low to me especially after Apple put its foot on the ground. I would argue Li would settle for plurality rather than majority. He would still run the show (in front or behind the curtain)
On the other hand, if Apple does not get involve. It clearly sets in the reality. Li takes over would not be that bad after all. It is clearly better than bankruptcy.
Calling the bluff on Apple seems to be win win for Li. He can't lose.
Effect of Poison Pill
With 1.1B shares authorized and 882M shares outstanding, Li's 405M shares will be 46% of the outstanding, or 36% of the authorized.
218M shares can be used as poison pill upon Li's attempt to takeover.
To my understanding, LQMT can issue those 218M shares to anyone and anytime without shareholders approval. (Just like the 105M shares that was sold to Li for 8 cents).
If insider is all on board with Li takeover, those 218M shares at some (insider friendly) price can be consider Li's (independent what name he choose to put it under). 623(218+405)M shares will put Li at 57%.
On the other hand, if insider is not all on board, they need Apple to hold the line.
If Apple steps up to the plate, Li will be stuck with 36% and will be very expensive to buy 150M shares from the open market.
But then, why would Apple care to bid? To me, that is the KEY for this whole deal.
With EONTEC in the loop, one can argue Materion is no longer the must need partner
He could have purchased the IP (non CE) outright. Why all that drama?
Or he can choose to pay hefty royalty
When one owns two business that have financial transaction in between. One can choose whatever fit them well at any given time.
In my Steve Job example, what do u think Steve will do? In case u r not aware, Steve's fortune came from Pixar not Apple.
Li can make a lot of money thru Eontec if LQMT becomes a "puppet broker" that clears all the legal path for a direct Eontec/Apple relationship.
Question remains if Li chooses to have Eontec pay LQMT hefty broker fee for all the trouble.
Hmm....wonder what Steve Job would have done for an Apple TV deal that involves Disney/ESPN
Hmm.....
Apple keeps taking on Tesla Graveyard
Now we have LQMT picking up Apple Crumbs
Watt is that all about? That's too Steipulative
Apple care for IP exclusivity rather than chump change royalty.
Let's stick with the 90/10 rule.
It will take 10% effort and 90% return for Apple to protect (exclusivity) on true high volume "consumer electronic" devices that does not need a lawyer to defend.
It will take 90% effort and 10% return for Apple to protect (exclusivity) on not so high volume "consumer electronic equipped vehicle" that will take a supreme court green light.
In the grey area, will be things such as "battery casing" which exclusivity will be enormous reward back to Apple if that ultimately becomes the tipping point of forever snail pace of battery technology advancement.
For EV to advance and make it to mainstream, there must be break thru technology on battery front to justify charging station ECO system. Elon Musk will tell you "it is not the car but the battery" that matters.
Eontec "big piece" capability and "good enough" lower cost BMG align with LQMT/Apple's CIP's ultra precision to form the capsulated casing for the forever lasting battery.........Something for ANAX to comment.
LAME DUCK / PUPPET EMPEROR / FALL GUY
There will always be a role for someone such as Steipp. Someone in that role needs to get paid somehow.
LQMT lost its soul back in 2010. We need to accept that.
More importantly, it is better to assess how "Apple <=> Li" true behind the scene business relationship will pan out. One can dream/speculate all kind of synergy.
One will always question why LQMT. Businessmen from both companies have thought it through and decided it is better with LQMT than without. Hence the "deal" on the table.
For LQMT short term shareholder, they just have to pray there will be some "accidental benefit" breadcrumbs that can trigger "wise" money to care.
For LQMT long term shareholder, we can only hope Li will have "personal" incentive to SHELTER/TAX INVERSION. Under that scenario, LQMT will be "linked/perhaps even bias" with the success of his empire.
Hind Sight Chartist always can find a segment that fits their argument on any investment.
Tale of Two City
I was on vacation in Belize past Christmas
Belize City:
Normal tourist area. Crowded but not booming consider it is peak season. Traditional tourist attraction but very little Chinese shops (Neither should be)
Belmopan:
Belizian home town. Residential area that feels like Detroit Michigan. As we were heading to our hotel with the touring bus, I happened to notice a huge Chinese Supermarket. Within 5 seconds, I see another one. Within a block of 1/4 mile, I counted ten such huge supermarket lining up on the same route. Yet I noticed they seem to be all dormant with little or no traffic (and not a single Chinese in sight).
When I reached the hotel, I asked the manager why is there so many huge Chinese Supermarket. He answered with a smile and say this is booming business here. We welcome them here.....They are lining up to open store here and change ownership once every five years.
Booming ??? I said I hardly see any traffic.
Manager this time reply with a bigger smile....He said
"DOES IT MATTER?"
Military DOD market has a super long sale cycle. No business can survive solely on Military demand/revenue from the "get-go".
Has one ever heard of DARPA "startup"?
With that being said, no Military customer will/can count on vendor that has little/no future. As a result, COTS business emerged back in the 80s. All qualified vendor must be "COTS viable".
Is LQMT "COTS viable" to DOD program manager's eye?
If you ask that question before 2010, the answer is "no".
If you ask the same question at the end of 2015, the answer is at best "maybe"
If you ask the question now, the answer is "implied yes" base on recent publicity from the DOD world.
COTS (Commercial Off The Shelf) means product that has/will have commercial success. It seems like someone is betting on LQMT future.
BTW, One can say the same thing about the Medical market.
Are we hoping/wishing DOD/Medical to pay the short term bill? I will take Li's 63 million lifeline to be a better bet.
Home Button removal is to allow "screen size" not "phone size" to increase significantly. Note "screen size" must align with 1920x1080 standard HD aspect ration.
Antenna band liquidmetal prediction came from Atakan Peker.
Ming Chi Kuo did not have liquidmetal prediction that I am aware of.
Need to screen out weed from "second hand" analysis prediction some time.
Please check this math for me
Before Li first investment:
Outstanding = 477mm
Reserve = 223mm
Total = 700mm
Float = 440mm
Closely held = 37mm
Insider + >5% owner = 70mm
Outsider = 370mm
After Li first acquisition of 105m thru reserve:
Outstanding = 582mm
Reserve = 118mm
Total = 700mm
Float = 440mm
Closely held = 37mm
Insider + >5% owner = 175mm
Outsider = 370mm
After Li partial 2nd acquisition of 182mm thru reserve:
Outstanding = 700mm
Reserve = 0mm
Total = 700mm
Float = 440mm
Closely held = 37mm
Insider + >5% owner = 293mm
Outsider = 370mm
This makes much more sense
Thx
Just wonder why our vote would matter.
Last I check there are only 233 million shares floating on an outstanding pool of 582 million
Let's look at all sides of the equation.
Apple:
There is nothing but downside of any hostile takeover. On the other hand, they are not motivated at all to take ownership of any kind. They did not do it at 2010 and they are not going to do it now.
Apple is a technology company not a manufacturing company. LQMT has been out of technology phase long time ago. Apple got what they want for 20 million.
With that being said, they will do anything they can to inject poison pill before the last resort of ownership.
LQMT:
No company like to be taken over at fire sale. However, there is always reason for fire sale due to their own incompetency. There is no way they could have stopped 51% ownership at the get-go with a take it or leave it offer (I argue not much more than 63 million). The thought of stopping one at the get-go for 46% and somehow stopping another 5% from happening is naive.
LQMT does not need 63 million to keep the light on. If the thought process is to prevent take over and/or injecting a bidding war, simple answer is to accept 20 million for 20%.
Again, did they have that choice?
Li:
46% motivational ownership is an oxymoron. The thought of staged take over with 46% upfront is irrational. Why make life so complicated (for every one involved)?
THERE HAS TO BE A POISON PILL SOMEWHERE
IMHO.....
Perhaps it might go something like this
1. Turing Phone caught Apple's attention
2. Apple recognized Eontec might be the perfect match for the ultimate 10th anniversary iPhone X.
3. Eontec recognized (or purposely done) Turing Phone is just a "brick" prototype. It needs Jonathan Ive treatment.
4. Upon detail negotiation, both parties recognize they cannot shake off LQMT somehow (or at least it will cause time to market due to legal team involvement)
5. Li woke up one night and realize he can "have the cake and eat it too" simply by acquiring LQMT (merely as a conduit) in fire sale and set up a legitimate offshore investment entity.
6. Apple of course cannot risk Eontec being in control as the "single source" vendor. They accepted the deal with the condition that Li cannot have 51%.
7, Li settled for 100% win in Eontec and compromised for 46% win in LQMT with practically 100% control for both entity.
8. Li has the right to split the Eontec/LQMT Apple pie whatever he choose for personal gain.
THIS IS PURELY FICTIONAL.......
What is motivation for Li to stop at 46% from the get-go?
Perhaps someone on this board will know this
Does Apple have a say upon any 51% ownership of LQMT?
If yes, professor Li will most likely max out at 46%.
Aren't we assure being part of the future ride?
Professor Li is the clear winner with this deal.
After much debate thru the optimist/pessimist/realist on this board, it appears we have come to the above conclusion.
At 63 million fire sale price, he gained access to a set of CIP that might have costed Apple 300 to 500 million to make (according to Atakan Peker).
Thx to partnership with Atakan Peker, he has LiquidMorphium which is good enough for Touring Phone. I want to believe (naively) LiquidMorphium (possibly a tweak by Atakan Peker) alongside with Apple/LQMT CIP, Engle machine, will be good enough for the tight tolerance requirement (for sapphire coupling) and water resistance need by Apple and many others. This effectively obsolete the original LiquidMetal. One can see why Materion is freaking out.
This simply will shift all the competency under one roof (Eontec) with LQMT merely act as a broker.
How the Apple pie will be distributed is totally under the control of one person (Li).
We, LQMT share holder, naturally would love Li to place more emphasis on his "offshore" fortune.
How many Hustler will it take to move 63 millions out of China?
A) 1,260 cash smuggler
B) One Steip
Turing Phone is a "brick" targeted for "highly secure" market. It will have limited volume.
Neither Apple nor LQMT will care
Perfect....now we finally find the non-CE maret.
This is much better than selling knives.....IMHO
FDA approval in Far East is much less stringent.....hence shorten the sale cycle......from eternity to long term
Cool...nice to hear common sense prevail
Sounds like we are in agreement that LQMT still have a "little" say in the matter.
Steip the "deal maker" not to be confused with the "dream maker" has done something right "circumstantially" at the 23rd hour.
Li the "opportunist" got himself a great bargain for 63 million chump change. LQMT matters does mean something to him personally. As you suggested, LQMT can be a great shelter for his future empire.
Once Eontech buyout LQMT, all the legal twist will be untangled
With Professor Li on board with LQMT, new non-ce arrangement can be made. Don't you think?
There must be a WILL before there is a WAY
First thing first, we hereby assume
"Eontec Alloy + LQMT/Apple CIP" is a NEED by Apple and hence a WIN for Professor Li (both as Eontec and LQMT major shareholder).
Otherwise we should abandon this conversation
I agree with your contractual assessment totally.
So, contractually wise, I see no way that these contractual cross-licensing deals allow Eontech to make ANY deals at all with AAPL either IN CE or outside of CE in North America and Europe.
For North America and Europe (LQMT RSM’s territory, the only departure from this would be for Eontech, LQMT and Apple to sit down at the same table and renegotiate all of the signed and sealed contracts as of this date. I don’t see this happening.
If is is WIN WIN in all front, why wouldn't they sit down and talk
However, I do see the possibility of Eontech selling to AAPL in the CE market, but ONLY in ASIA. Of course, LQMT will receive NOTHING from AAPL or EONTECH, in this market, because of the two FULLY PAID UP, PERPETUAL LICENSE stipulations.
Why would Apple entertain the idea of producing ASIA only product.....just to rip off LQMT???
Agree.
However, Hype is good.
Just check out TESLA who will not make a dime until 2020 (per Elon) when all the wind is blowing in the right direction.
It is not clear to me Apple can using LQMT/Apple CIP to do business with Enotech directly with the "cross license" agreement in place.
Some legal expert can chime in on this one.
Has anybody think through what the potential of Enotech's low cost, low precision, big piece, high volume capability "alignment" with Apple/LQMT CIP to produce non CE part for Apple's Titan project?
Wouldn't LQMT earn a share of that pie?
what if Apple wound up using Enotech's alloy (for low cost) and feed thru Engle machine for precision.
In that case, Apple has to buy thru LQMT (with their cross license)and exclusivity for North America and Europe.
Enotech on the other hand will net the Asian share of the Apple Pie.
With the limited amount of shares traded and shares already up 50%. Shares buyback will be very expensive.
This is the same reason (as you stated) Li took the back door path (with precise timing) to acquire his shares.
According to Ming-Chi Kuo, Apple will not do a "revolution" iPhone for 2016. Perhaps just another "evolution" upgrade.....iPhone 6SE??
For 2017, they will finally introduce iPhone 7 ...the "Mammoth Revolution upgrade"
1. Ultra thin yet no "bend-gate"
2. Saphire "glass sandwich" hence "waterproof" and "scratch free". Finally a phone without the need of a case.
3. Home Button via 3D Touch
4. 5.8" diag size compare to current 5.5" but yet with substantial screen size increase due to home button removal and "edge to edge" display
5. OLED display for battery saving and "edge to edge" display. Note LCD display has technical difficulty going "edge to edge"
6. "Non Destructable" flush mount LiquidMetal bummper/antenna
7. OLED and Touch Sensor and 3D touch sensor 3 layers integration to achieve super thin. Note currently Apple has LCD and Touch Sensor for 2 layers integration with separate 3D touch sensor
Early Transistor Radio is not meant to be portable.
They were targeted to replace Vacuum Tube Home Audio.
Vacuum Tube is heavy and require tune up and maintenance. Transistor was meant to be light weight and maintenance free.
Early Transistor Radio cannot compete in sound quality hence continue investment in fine tuning.
Audio Freak today still argue nothing can replace Vacuum Tube. Guess what they are still in production for high end ultra niche market.
This is Ambri, former Liquid-Metal technology corp started from MIT.
http://spectrum.ieee.org/energywise/energy/the-smarter-grid/a-liquid-metal-battery-for-grid-storage-nears-production
It is not the same as LiquidMetal Technology Inc started from CalTech.
It is confusing. Isn't it?
Take a lesson from Innovator's Dilemma by Clayton Richardson
Disruptive innovation is not about the technology
Disruptive innovation is not about creating the best products and protecting profits; disruptive innovation comes at you.
Example: Consumer electronics companies in the 70s invested $3b (in today’s money) in improving vacuum tubes for the transistor radio, to make it the best transistor radio possible. Meanwhile, Sony went to market with an average product, the pocket radio, affordable, accessible to a new audience (teens who could now listen to music without their parents listening in). Sony sucked the consumers out of the mainstream of transistor radios and built customers, not the best technology. The technology was good enough for the customer; it didn't have to be the best.
Customers in a disruptive innovation model are enticed into a new system, not vice versa.
In this example: Sony purchased licensing right from AT&T (who invented transistor) for just transistor radio. Pocket Radio made transistor a "brand name".
Did AT&T make much money "directly" from Sony as they could have?.... Perhaps not.
However, it allowed transistor to become one of the modern day technology wonder.
In this case, I do see Apple's non destructive iDevices being the Sony's pocket radio. It will bring LiquidMetal the "brand name" it desperately needs.
Can Tesla and other feed off the technology and make "fuel cell battery" one of the future modern day technology wonder?
See below patent that discussed Liquid Metal and Fuel Cell
http://www.patentlyapple.com/patently-apple/2013/04/a-fascinating-liquidmetal-patent-from-apple-surfaces-in-europe.html