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I personally have never shorted a stock. And although I understand the basic premise of shorting, I certainly would not consider myself uber-knowledgeable on the subject. As such, I have what I am sure is a simple question if you don't mind:
How do shorts "hold" any shares of a stock (let alone millions)? Isn't the basic premise of shorting such that shorts open their short position by borrowing stock to sell at the current sp, and they are betting that the sp will go down, at which time they will purchase shares on the open market to return to the party from whom they borrowed originally?
If so, then at what point do shorts actually "hold" any shares?
TIA...
Well said, JJ. That about sums it up.
Merlot-induced predictions blowing thru your northern windpipes are good enough for me. Sausage-induced predictions blowing from your southern windpipes -- not so much...
As always, thanks again JJ for sharing your knowledge and perspective with us who are but mere laymen to the ways of the law!
< crickets chirping >
< plantation shutters banging open and close, open and close >
< tumbleweed rustling down main street >
Does anyone remember the last time we've gone this long into the AH session w/o a single trade??? Unless the Nasdaq.com site is wrong or is not getting updated, that's what I'm seeing...
LOL! Careful what you wish for!
Sausages are like 10-K filings... ...they look tantalizing on the outside, but you don't want to know what's in it.
For me, when it comes to sausages, I take the "don't ask, don't tell" approach -- I won't ask what (or who) is in it and you'd best not tell me.
As investors, we all value performing DD, but when it comes to sausage, I find that ignorance can be bliss.
So bottoms up, and all hail the porcelain king!
I did not mention insurance in my post. I was speaking of taking even money and a guaranteed win vs the possibility of receiving extra money. I do agree that the insurance bet is a sucker bet, but it wasn't what I was referring to.
In an actual tournament environment where one move will result in a winner-take-all outcome, then of course, gaming theory changes as to what move becomes recommended.
But in the VRNG case, I suppose it depends on whether VRNG views GOOG, MSFT, ZTE, and whoever is next as individual "tournaments" or whether they view GOOG as just the current hand to be played, followed by MSFT as the next hand, followed by ZTE as the hand after that, etc, etc, etc.
Hence, my initial statement to redux that this blackjack analogy is not entirely accurate and may not necessarily be the best analogy to use in relation to VRNG...
...but I will say this: If this MB morphs from a discussion re: VRNG to having more discussions re: gaming theory, I just might pony up the dough to subscribe to iHub in order to post more than 15 times each day!
maybe he meant peso instead of dollar?
Have you ever played blackjack? In blackjack when you get a 21 and the dealer shows an ace, before the dealer reveals his cards you can request even money vs the 1.5x you would normally get. That's the smart play in blackjack and getting whatever reasonable amount of money they can get from Microsoft without a trial is the smart business play.
@JJ,
Thanks for the nice recap of the items GOOG specifically identified.
However, in the interests of clarity for everyone, it is important to note that the notice of appeal also contained the language "including but not limited to" prior to the vomit list of specific items.
My read on this is that it is similar to VRNG's notice of appeal in the sense that they are basically saying that they may potentially appeal every single decision that went against them, respectively, during the course of the trial.
But IANAL...
LOL! That post again?!?
I can't even begin to count how many times I got attacked for saying this same thing.
what about supplemental damage ruling, can come before 822 replies, etc?
@xlt,
No offense taken and certainly no apology necessary! This is the beauty of crowd-sourcing where different folks provide different perspectives and contribute different things!
@xlt,
Certainly there are always numerous market forces at play, including but not limited to the unknown impact of short covering as you mentioned.
My numbers were not intended to either capture all of them or to predict where the sp would end up -- as I mentioned in a different post to JJ, these numbers were strictly limited to the "book value" if you will of the monetary award and the impact of this singular variable to the sp.
There are certainly other factors that will contribute to the sp, including but not limited to the items you refer to.
My rough calcs were simply focused on one piece of the overal sp puzzle: Quantifying the potential net monetary award and resulting accretive benefit to the sp attributable solely and directly to a court award in the GOOG case in the amounts referenced in tobinator's spreadsheet.
how many motions remain to be ruled upon?
Thanks for your contribution, tobinator!
To add to it, using the same assumptions/variables that tobes incorporated into his calcs, the "net to VRNG" after adjusting for 20% contingency and 35% estimated taxes is:
3.5% = $336M
5.0% = $481M
7.0% = $673M
Based upon ~115M FD shares, the metric that we all ultimately care about is that this net amount translates to this much accretive value per share:
3.5% = $2.93
5.0% = $4.18
7.0% = $5.86
Of course, if it ever gets this far where VRNG is actually going to collect these amounts as future royalties, then this means that no settlement was reached (i.e. no lump sum payment all in present day dollars), so discount for time as appropriate...
...but the real wildcard is seeing how the market will react to the rulings and how much, if any, premium it may or may not be willing to award VRNG for securing victory in its rookie enforcement campaign...
@Bsav,
The interesting thing that no one has talked about is that JJ specifically chose to insert the words "as necessary" into the language he used.
IMO, there is a very real possibility (no idea as to probability, though!) that JJ could conceivably rule on 822 without requesting ANY briefings at all.
Very few non-attorneys were aware that there was no requirement for a judge to wait until all parties had the opportunity to file opposition briefs and reply briefs in order to rule -- but those following VRNG found out about it in a rude way when JJ denied VRNG's post-trial motion requesting a new trial re: laches before VRNG even had a chance to submit their reply brief!
Considering how intertwined the past damages are with the future royalties, it would not surprise me if JJ, in determining how he will rule on past damages as well as the motion re: pre-judgment interest and supplemental damages (which both would include his clarification/ruling on the RR and royalty base), will have already also determined how the future royalties will be assessed as well.
Again, not saying he will, but just thinking out loud on an angle that has not been broached yet...
3. Assuming a new trial on past damages, I'm a little in the dark on whether JJ would first have the new trial and then proceed with the briefs and hearing on the issue of the RR. I would appreciate any clarity on this timing issue.
Think about what you just said. Your argument is premised upon the thesis that there are only these two ways that any website could ever make even a single dollar based upon a search query. Just think about the enormity and absoluteness of that.
@tobinator,
Thanks for taking the time to try to put something like this together. Quick question. Am I understanding your calcs correctly in that you are first apportioning 50% of MSFT's total OSD revenues to the US (no problem with that), but then applying your potential RR's to 100% of this 50% revenue base?
If so, I'm not sure this is appropriate. By doing so, you are invoking the Entire Market Value rule, and I'm not convinced one bit that this will fly. I know that others have opined that it is appropriate and have used the reasoning as "Well MSFT has been infringing ever since they launched Bing, so every dollar they earned with Bing is on the table", but this is not only flawed logic but completely irrelevant. By this logic, VRNG should have been able to claim 100% of GOOG's US revenues as the revenue base by which to apply their 3.5% RR, but they did not -- and could not. There is a reason why VRNG only claimed 3.5% of the 20.9% of GOOG's revenues from 2005 onward.
My understanding of the EMV rule is that by applying it, you are essentially saying that without these patents, the accused product would cease to function and would have zero marketability as a stand-alone product. And this is clearly not the case with either GOOG or MSFT w/respect to their use of 420/664.
420/664 is NOT search. And 420/664 is NOT foundational to monetizing search advertising. Making money off of search advertising existed before 420/664. Think of 420/664 as steroids for the monetization of search advertising. If you recall those old BASF commercials from long ago: "We don't make a lot of the products you use; we make a lot of the products you use BETTER."
As such, there would seem to be a need to try to quantify the extent of "incremental benefit" that MSFT would have theoretically gained by virtue of their use of 420/664. This will be much tougher since there is no history of Bing's revenue performance w/o 420/664 the way there was with GOOG in their pre-2005 revenue numbers. And perhaps this is where using the 20.9% from GOOG as a surrogate may be the way to go for the time being, with the caveat that this is a variable that is still very much squishy and in a state of flux.
Thoughts?
At least we got some life back into VRNG.....this should set up for an exciting week....
Can't disagree with that, amigo. Was just noting where the $200M figure and the speculation "might" be coming from. I wasn't personally stating a figure, nor speculating on the value of the potential settlement.
I dont think this will settle for less than 350 million. My guess and what i have seen with donald stout so far is he is the king of big settlements
DR noted that Microsoft settled with VHC for $200M in 2010. Might be the source of the figure and speculation.
I have not looked into their NOL situation, but if what you say is true, then that is certainly good news and should result in any gross settlement amount being adjusted solely for the 20% legal contingency. Thanks for sharing that NOL tidbit!
If it is a SETTLEMENT, it will typically include rights to future use. Most of the time, these settlements call for a one-time lump sum payment in an amount that covers both past use (usually heavily discounted, but in this case it may simply be an agreement to not treble the amount) and future use.
Granted, it is always possible that a settlement could be crafted that calls for both a lump sum to cover past use AND an ongoing future royalty rate for licensing the patents going forward. But this is rare and I highly doubt MSFT would agree to such terms. It almost defeats one of the primary purposes of a settlement, which is to set a finite boundary on the cost -- and having royalty payments in the future that are unquantifiable due to a potentially increasing revenue base simply makes no sense for any party to agree to.
JMHO though... ...stranger things have happened already in this case...
Strictly by the numbers, you can take the $200M (if it is a legit number, but even hypothetically you can do your own calcs on the pps impact of any settlement amount), adjust it for the 20% legal contingency, then adjust it further for 35% estimated taxes, then allocate it amongst ~115M FD shares, and you will get $0.90 per share. And then there is always the unknown impact of market sentiment (i.e. how much of a premium will investors begin awarding VRNG now that they have scored their first meaningful patent monetization victory?).
Source of this rumor, please?
No one knows for sure how serious and deep the talks are yet. All we know is that they are in talks.
It could also very well be that it is simply a courtesy 2-week notice to the Court, considering that the date of the letter that was faxed was yesterday, 3/27, and the originally scheduled pre-trial conference was scheduled for 14 days later on 4/10.
Who knows? This is partially why everyone seems to be loading up heading into the long weekend just in case something is indeed imminent!
Although always encouraging to see green, the volume is currently trending to still fall short of being double the 90-day avg. Certainly good, but not the volume levels you would expect to see if "smart money" was really moving in because they knew something (and in a legal case like this, I don't see how anyone, regardless of how smart they are, can know in advance when and what JJ will rule).
I may be wrong, but with all the increased hype that has been building up around "the motions being ripe for ruling", coupled with the long weekend, in the absence of news, this looks like (so far anyways) the typical weekend pile-up as speculators don't want to be on the outside looking in should something come in AH today or over the weekend or PM on Monday.
With the nice spike today, we also have to hope that longs won't be our own worst enemy, especially those traders who recently bought shares and may flip for nickels and dimes now, which will inadvertently add selling pressure to the sp.
Let's just hope that should no news come out this weekend, that we won't see the same cycle we've seen in the past where folks dump due to no news. Baby steps. Barring any news, let's just build a solid support at $3.00 and take it from there next week...
Although always encouraging to see green, the volume is currently trending to still fall short of being double the 90-day avg. Certainly good, but not the volume levels you would expect to see if "smart money" was really moving in because they knew something (and in a legal case like this, I don't see how anyone, regardless of how smart they are, can know in advance when and what JJ will rule).
I may be wrong, but with all the increased hype that has been building up around "the motions being ripe for ruling", coupled with the long weekend, in the absence of news, this looks like (so far anyways) the typical weekend pile-up as speculators don't want to be on the outside looking in should something come in AH today or over the weekend or PM on Monday.
With the nice spike today, we also have to hope that longs won't be our own worst enemy, especially those traders who recently bought shares and may flip for nickels and dimes now, which will inadvertently add selling pressure to the sp.
Let's just hope that should no news come out this weekend, that we won't see the same cycle we've seen in the past where folks dump due to no news. Baby steps. Barring any news, let's just build a solid support at $3.00 and take it from there next week...
Well, my left hand is itching real bad tonight.
Lol. Considering today's drop I wish that was my sell @ 2.90!
Actually I take that back. The person I know was the seller. I have no idea who bought it or whether it was one buyer taking that entire block.
Actually it was retail. I know the investor who placed the order. It was a limit order that was partially filled @ 2.87 and the final block was filled @ 2.90.
And in fact someone pushed the PPS up at the end with a little volume push. Might there be news soon....These things tend to be telegraphed. Very exciting times to be in VRNG especially with the volume improving, albeit on the downside. Looking for Pacer Doc's!
I read the 8k and and read the financing documents in detail.
If I have time I will reread-
I am very familiar with this company and have spent much time evaluating the company and I have a decent size position almost all at around .12
I am very bullish on the prospects of the patent portfolio.
However, for the first time today I am a bit concerned about the upside on the stock- there are many issues with the financing from a structure prospective
but the biggest one if the conversion price.
I dont understand how that helps the company
Latest comment from "princetonATTY44" from the comments section of his recent SA article:
From today's 8-K it's obvious that institutional buyers are on to Worlds (WDDD). The closer we draw to the Markman hearing the more interest from institutions. I suspect with a positive Markman Worlds will make application to upgrade their listing status. It's just great to be on the ground floor of this seeing it happen real time as opposed to getting involved after the Venture capitalists have invested.