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Do you know what rule this is based on? Can't find anything like it in the regs, but that does not mean it doesn't exist.
So if I am reading this right it only applies to sales, not purchases of stocks.
Nothing in the regulations prohibits them from buying stocks on the open market as long as they do not breach fiduciary duty or use insider information to profit, which seems difficult to do if they can't sell until everything is fixed.
Am I reading that right?
Good Point. Insider Trading Definition from SEC Web Site:
"Insider trading" is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insiders—officers, directors, and employees—buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC. For more information about this type of insider trading and the reports insiders must file, please read "Forms 3, 4, 5" in our Fast Answers databank.
Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.
Examples of insider trading cases that have been brought by the SEC are cases against:
Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments;
Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information;
Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;
Government employees who learned of such information because of their employment by the government; and
Other persons who misappropriated, and took advantage of, confidential information from their employers."
Hope I am not right that friends or family were behind the purchases the day before the news was released.
http://www.sec.gov/answers/insider.htm
Unless the T-Mobile deal is done there is not much else that is not already public knowledge, so there should not be any restrictions on insiders buying (or selling) shares as long as they are filing the Form 4.
There are no restrictions on insiders buying or selling once the news is public. Whoever purchased the 800K the day BEFORE the settlement was announced, that is a different matter. I was waiting to see if it was an insider but no Form 4. My guess is it was a close friend or relative of an insider or someone on the legal team.
That is when it struck me as odd that neither Kyle nor Christian purchased any shares. Now that I think about it, I don't think Christian has ever purchased any shares.
In any case, it just struck me as odd that none of the insiders want cheap shares. Perhaps they are planning on taking their returns out in back-pay. Presents an interesting problem because officers who are banking on pay rather than getting their profits out in increase in share value could mean that they are more interested in quick money now than share value later.
Well I certainly hope not. That would be a REALLY BAD SIGN.
I find it interesting that no insiders have purchased shares. When good news was on the horizon Williams purchased more shares. I find it odd that none of the insiders feel confident enough to invest their own money.
That is 100K shares less than sold the day before the news broke.
I am saying that they knew where the technology came from. As I recall they tested it at one time to be sure it worked. Others will have to fill in the details but from what I recall they (or the company they got it from) had a "black box" agreement with us which they violated. That is why they owe us from day one.
I agree the real payout is in putative or special damages. The rest will be based off estimated revenue lost, which I feel will be significantly less, but still worth the time in court.
No offense aassnnaapp, but I think it is worth the time to discuss this amongst ourselves so we don't panic at the meeting. It does not hurt to be somewhat educated even if it is only guesswork.
For example, if management tells us that they have decided to resume the T-Mobile case with a contingency attorney everyone should not panic - it could be a very good thing.
If management tells us they have a settlement than we should be realistic about how much that settlement should be. I still don't know how to value this patent but I certainly believe special damages in the amount a $100M is certainly not ridiculously high (actually, I would say a few million low).
In any case, management should be able to explain how they valued the settlement, what they assumed the risk was of trial and the math as to why they decided to settle. The systems I described will be how T-Mobile will decide how much they are willing to pay.
I don't expect a settlement. Nothing is stopping us from pursuing licensing deals elsewhere or even going after other US infringers. Being tough with T-Mobile will demonstrate that we are not a pushover willing to take pennies on the dollar.
I guess I am expecting this thing to go back to the courtroom, especially after the developments of the state case. It might be better if everyone had an understanding of what they can expect (or what they feel is deserved) BEFORE walking into the meeting and not attack management for what is a reasonable business decision.
JMHO.
Correction - using LGs 42% figures. (Math was right, numbers are wrong)
All numbers in millions of dollars rounded to tens of millions.
Estimated value of the claim - $10 Should Consider a settlement of $7.5 - our take at 42% = $3.2
Estimated value of the claim - $15 Should Consider a settlement of $11.3 - our take at 42% = $4.7
Estimated value of the claim - $20 Should Consider a settlement of $15.0 - our take at 42% = $6.3
Estimated value of the claim - $25 Should Consider a settlement of $18.8 - our take at 42% = $7.9
Estimated value of the claim - $50 Should Consider a settlement of $37.5 - our take at 42% = $15.8
Estimated value of the claim - $75 Should Consider a settlement of $56.3 - our take at 42% = $23.6
Estimated value of the claim - $100 Should Consider a settlement of $75.0 - our take at 42% = $31.5
Estimated value of the claim - $200 Should Consider a settlement of $150.0 - our take at 42% = $63.0
Assuming a 75% chance of winning the case.
Net as apposed to gross.
Special damages will be the biggest part of our claim. I believe that we can rightly claim that we lost all of the revenues from the overseas patents as a DIRECT RESULT of T-Mobile's infringement. Had they paid us for the last 6 years we could have paid off Diac. If we are not at least making that argument in court we are idiots.
Just running the numbers from low to high. I have no idea what this thing is worth and until someone here with an idea of the business can tell me I am covering all the bases. How are you figuring your estimate?
I would assume that it is a fee per customer using our service, not total revenues of T-Mobile, not even total cell revenues. Anyone out there have any idea how many T-Mob costumers actually use the ANSAP? I would imagine that we have asked for that data as part of our discovery with T-Mobile ... have we gotten any of that back? If we haven't then I can't imagine we have enough information to even intelligently talk settlement.
Redone clearer with LGs percentages. 75% chance of winning. Again, all numbers are in $Millions
Estimated Value of claim: $10 Should Consider a settlement of $7.5 : our take at .28% - $2.1
Estimated Value of claim: $15 Should Consider a settlement of $11.25 : our take at .28% - $3.15
Estimated Value of claim: $20 Should Consider a settlement of $15 : our take at .28% - $4.2
Estimated Value of claim: $25 Should Consider a settlement of $18.75 : our take at .28% - $5.25
Estimated Value of claim: $50 Should Consider a settlement of $37.5 : our take at .28% - $10.5
Estimated Value of claim: $75 Should Consider a settlement of $56.25 : our take at .28% - $15.75
Estimated Value of claim: $100 Should Consider a settlement of $75 : our take at .28% - $21
Estimated Value of claim: $200 Should Consider a settlement of $150 : our take at .28% - $42
OK, for easy reference. To calculate whether a settlement offer is worth taking you multiply the risk of loss (as a percentage) times the amount. In our case, again, using a contingency lawyer, we would receive 32% of the settlement with TMob. Let’s assume a 25% risk. Calculations look like this: first column what we think we can win – second column what we should consider taking assuming there is a 75% chance we will win. The second set of numbers is without a contingency lawyer (we get 68%) with a 50/50 chance of winning. All numbers are in millions of dollars. If LG is right, then I will have to adjust the numbers.
remember, the first column is the TOTAL Settlement, not what we would get. The second column is how much WE GET out of the final settlement.
32% take with a 75% chance of winning.
10 - 2.4
15 - 3.6
20 - 4.8
30 - 7.2
40 - 9.6
50 - 12
75 - 18
100 - 24
125 - 30
150 - 36
200 - 48
68% take with a 50/50 chance of winning. Lawyers fees not yet deducted.
10 - 3.4
15 - 5.1
20 - 6.8
30 - 10.2
40 - 13.6
50 - 17
75 - 25.5
100 - 34
125 - 42.5
150 - 51
200 - 68
Where did you get that from?
The figures are simply used as guides. $25M is five time $5M so it makes an easy reference. Although the actual math is better for us as the numbers go up, I thought it formed a baseline to work from. Clearly, any settlement for less than $8M is not worth taking.
The percentages are from the settlement. If Diac get 28% and we hire a contingency attorney (usually somewhere between 30 and 40%), then we get the remaining 32%.
Nothing here is based on anything other than reading the settlement and having some business/law experience. This aint rocket science. It is just common sense.
There is no rush to settle T-Mobile. We have the clear rights to the patent in the US. Now Turinni can get to work licensing it like he has always said he could. T-Mobile owes us millions in special damages for infringement, perhaps hundreds of millions. We must get a contingency attorney so we are not paying the bill and max it out.
Turinni is now free to get us some deals. Lets see what he can really do.
BTW, some easy math. Conservative estimate of settlement with contingency attorney, $25M. less 40% to attorney and 28% to Diac leaves us $8M. Therefore, NO SETTLEMENT DEAL SHOULD BE CONSIDERED THAT IS FOR LESS THAN $8 Million.
I don't agree, but it does not matter. What matters now is who we are hiring as the contingency attorney to take over T-Mobile. A contingency attorney will push for the maximum return, and since he is spending his own money to get that return, he will not push to the point of failure. He will get us the max. even if he takes 40% to get us that, the 32% of $50M we will receive with a contingency attorney is more than 68% of $5M we will receive with the current officers doing the negotiations.
No it did not - not in chapter 11 reorganization. Diac would have been a creditor in line like everyone else. Secured by the judgement but nothing more. Most arrangements have some language that threatens automatic turnover but it does not preempt federal law. Part of the point of bankruptcy is to protect ALL the creditors, not allow one to steal all the assets. We could have then appealed the judgement as well as sued him for interference. Heck, the way this thing was being spun now we could have even tried to appeal the original judgement. As the only asset of the company the Judge would not allow turnover until it was clear that they company had no other way to settle its debts. With pending litigation against T-Mobile the judge would have protected us until the time that case was over. Years if need be.
The only reason I can see for not wanting to take this path is that it would have opened the internal actions of the company up to public scrutiny. We would have actually seen how management worked.
Water under the bridge. Now the rest of you have better figure out how to protect what little, very little you have left.
Excuse me?????? It is the only issue at this point! It will set the stage for every other claim.
Why all of a sudden is everyone low-balling the T-Mobile settlement?
DRAGO and Sosa, you already know about the T-Mobile deal and you know I am right!
Wow, I had no idea how bad things were until now.
Even you can't believe that. And exactly how is this "confidential" settlement supposed to be registered in calypso, a public company's books? A small settlement will be a small settlement, period.
So, how much do you think we will get from T-Mobile?
So Sosa, what is your ball-park-figure for the settlement with t-Mobile. How much do you think we are going to get?
Sosa. I do not need Dave to tell me how badly we screwed this up. I have enough of a legal background to see what has happened.
As for suits against the officers of the company, I believe there will be plenty of opportunity for that. But to what end, Turinni has no assets in the US and Pierce is nearly judgement proof, though I think she stands more to lose. It would be a moral victory only.
Lets wait and see how Diac plans to "exploit" the patents oversees and who will be officers/shareholders in those companies. Then we will talk again about breach of fiduciary duty and self dealing.
That is the way some people might spin it. I don't see it that way. There were several options open - paths not taken. In my opinion fear drove this settlement, not common sense.
Again, it is done. Can't change it. My concerns now are with the future.
That value was set as the fair market value of the patent. In any case it is hard to argue you are owed $116M for an asset that now you claim is only worth $5M while it has now been infringed upon by T-Mobile. Diac would not be able to deny that since he is a party to the suit. What are we asking for damages on that suit - that is what Diac has admitted in court documents only those rights are worth.
No matter, we never tried to get the judgement reduced as excessive. Water under the bridge.
That was the time before. the last time we paid them.
Ask Sosa if you don't believe me.
Be careful. The logic behind the t-mobile settlement will be to get someone to acknowledge the patent. This logic will cause them to settle for far less than they actually deserve (no surprise there). But it will also set the value of the patent. So if we low-ball this one, we low-ball them all.
Beside, they did not need to crush us before, we were doing that on our own.
I am willing to wait and see, but I am not terribly optimistic.
My guess is that will be the discussions at the "forum". They have several options to get back on the pinks, none of them are actually that difficult. Next step after that will be raising funds, either through authorizing additional shares (100M or so) or selling a portion of the patent, my guess is the selling part of the patent since that requires far less external scrutiny. Once again we will be told that it is our only option and if we don't we will lose everything. It is actually very sad.
I really hope I am wrong. GLTA.
What bothers me most is the lack of nerve on the part of the company officers. If they were not even willing to get into the courtroom with Diac, who has limited assets to defend his case, how do you think we are going to fair against T-mobile. You think they did not see what just happened?
Sorry, not seeing your logic. How can it be that the company, with less assets than it had today, be worth $116M (Diac's judgement against the company based on its worth), yet the same asset only worth $5M today? If it is only worth $5M, then why not appeal the judgement, a separate action from the verdict. Done all the time when judgements are excessive.
Sorry, not buying that this was the best deal we could get. Did we even counter offer or was this simply what Diac directed we would have to take?
I never said I would wait until the meeting to get the facts. I don't expect there to be many facts at the meeting, only fluff. I said I would wait until the lawsuits to get the facts.
Counsel is always going to be cautious and rightfully so. There are no guarantees in a courtroom. But I doubt they even considered other options. I doubt they were given the time. Did they look at going back and appealing the $116M settlement as excessive, probably not. Did they consider Chapter 11 reorganization which would have protected the assets of the company, probably not. Were they allowed to consider ANY other options other than the deal on the table, probably not.
Management's concerns and shareholder concerns are not always aligned. Management will look for an easy solution that brings in cash so that they can get the money everyone here is ready to throw at them. Shareholders are interested in getting return on their investment. Not always the same thing.
Inevitably there will be lawsuits. I will wait to get my information from them rather than a forum.
If this settlement is any guide, my best guess will be no more than $25M. We will be told that we had to settle, that it was the only way to keep the company afloat, and that there will be other ingfringers to go after, but none of that will happen. Lawyer will take 25%, Diac will take 28%, Management will take 25% for everything they are so "rightfully owed", taxes, paying back loans, and other expenses chew up the rest. PPS will spike on the news but then fall back once the actual financials are released.
I doubt you will get factual answers there. But here is a question you can ask "Who is Diac going to hire to manage the foreign patents, particularly in South America?"
My source was Kyle Pierce.
Maybe I was misled.
I would agree. If T-Mobile wanted to crush us they would have gone back to court. I think they might be ready to deal, but what the final deal will consist of is another matter.
Not sure how that plays into things now. My understanding is the same as yours as to the facts. They raised the money by selling the last of the reserve shares the company had (the reason they had to get a transfer agent). They also did this without providing a prospectus but that is a separate issue.
The fact that management came that close to screwing the pooch does not instill me with confidence about the nature of the settlement.
That will depend on the language of the settlement. My guess is that Diac did not screw with that since he stands to gain handsomely from it.
If I had to guess, I would say it will take three months to settle with T-Mobile. A lot of assumptions built into that, but I am optimistic that it can be done in that amount of time.