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I can't believe the market would grant such a massive deep discount to VRNG for both a judgement (Home Run) and a settlement (Single or Double).
I think a settlement in the range I mentioned ($75 - $125 million) would definitely be a positive for the company and the stock should pop to somewhere in the $4 range. VRNG would have a ton of cash to use in other lawsuits (current and future) and be able to acquire more patent portfolios. The settlement would validate the IP, the business model, the licensing/litigation team, and the overall strategy going forward.
After all, I am discussing, arguing, debating, and throwing out my thoughts and opinions on a settlement outcome. My realistic $75 - $125 mm range was always based on an agreement - not a court award that should, by nature, be much more favorable to VRNG than a settlement.
@postyle,
We can't completely ignore what the market is telling us can we? VRNG is trading at $3.20/share. This translates into a market valuation of $260 million - $350 million (depending on how one chooses to "interpret" the capital structure of the company). What does this tell us about a baked in settlement value? Or the value after a favorable judgement?
@$oldier Hard,
I hear what you are hypothecating, but I believe that realistically, as VRNG is a public company, the requirements imposed by the SEC cannot be violated simply due to a confidentiality agreement like the one you are theorizing about.
Accepting, and complying with, confidentiality terms as you described would put VRNG in violation of the very regs that stipulate the conditions and criteria under which any public company must file an 8-K with the SEC.
A settlement of any amount is VERY MATERIAL to shareholders, and as such, require timely 8-K disclosure.
Although any final award by JJ or any settlement may not be material to GOOG (i.e. so GOOG likely would NOT file an 8-K upon resolution of this case), but it is VERY material to VRNG.
Confidentiality can certainly be applied to other non-monetary aspects of the settlement terms, but not on anything that can affect the sp.
3 follow-up notes:
(1)
The $120M that was used was directly from 826, which referenced Exhibit PDX-441, a direct piece of evidence presented during trial.
(2)
Although there have not been many court awards or settlements in the "$500M and up club", as you point out, that is simply a function of there being very few cases where the provable damages amounts get that high. How many of the historical precedents you are using involved infringers who generate $50B in revenues per year, of which approx half has been proven to be a result of infringement?
The size of the award/settlement is directly proportional to the amount of revenues proffered up to have resulted from the infringement.
It does not happen often simply because most infringers do not have the revenues to make the math spit out a number that large. The formula is the key. So long as the formula is reasonable, then the attributable revenue is simply a variable that gets dropped in and whatever number comes out at the end is whatever the number is.
(3)
Based on the weight of the evidence proffered during the trial, it is quite clear that had the jury applied their math skills properly/consistently, the number they would have come up with would have very clearly pointed to the RR and base, and this discussion would never be happening right now.
The entire premise that yourself and flyersdh have of valuing a potential settlement as being so low is based primarily on accepting the jury's past damages award -- and more importantly, the RR and base that can be reverse-engineered based upon this award -- as gospel. Not only that, your premise would require JJ to accept this RR and base as well (i.e. you are expecting JJ to apply a future RR and base that is nowhere to be found in any of the evidence/testimony proffered during the trial).
@postyle,
But isn't your assumption (which may be based on accurate historical precedents that you have observed over your many years of following patent stocks) contingent upon the fact that the jury verdict, although an official part of the record, is indeed correct and -- more importantly -- accepted to be materially correct by all parties involved in the settlement negotiations?
Just as each court case is different from any other court case due to the specific nature of the patents, extent of constructive knowledge, etc, etc, etc -- I would be interested to see which of your prior post-verdict patent settlements involved situations where there was clear agreement amongst all parties that the jury verdict was wrong. In addition, I would be interested in seeing any of your historical settlements that involved jury verdicts that were not accepted as being based upon the weight of the evidence presented during the trial.
The points I raise above are supremely critical in evaluating the odds of whether not only will settlement occur but at what amounts.
If there was consensus agreement between the parties (in particular, VRNG) that the $30M jury verdict was reasonably accurate, then, yes, I would absolutely agree with you that VRNG would recognize that this "low end of the spectrum" is supported by the evidence and as such any settlement offer that represented a 3-4x multiple of this amount should eagerly be accepted.
HOWEVER, it is quite clear that not only does VRNG not believe one bit that the $30M is the "low end of the spectrum", they have a very strong argument that this $30M is not supported by not simply the "clear weight of the evidence" but that it is not even supported by a single fraction of an ounce of the weight of the evidence, but rather, that the "low end of the spectrum" that they would consider would be: ($120M for the SEP-2011 thru SEP-2012 period) + ($120M per annum for each of the next three full years up thru SEP-2015) + ($60M for the 6 month period from OCT-2015 thru patent expiry on 4/4/16) = $540M.
And I call this the "low end of the spectrum" because it factors in no growth. And it also does not factor in a RR in excess of 3.5% which is still very much on the table, which GOOG is at risk of if it does not settle pre-emptively. And let's not forget the threat of appeal of laches that risk is at risk of as well. These factors comprise the "high end of the spectrum", and when VRNG assesses the risks associated with GOOG's potential appeals, this is precisely where both parties should logically be expected to end up agreeing to a number in between the "low end" and the "high end".
Respectfully submitted for your consideration...
I rely only upon my own DD when it comes to VRNG; my concern is for others who may be unwittingly led astray when stumbling upon some of these posts for the first time...
All stocks are speculative and of course a balanced approach works but WE KNOW IN PENNY WORLD WE ARE LOOKING FOR A SCORE!!!
@ivebeenhad,
Come on, please stop with this incessant distorting of the facts.
(1)
JJ did NOT "change" his ruling on laches. He had never made ANY ruling on laches. JJ made his ONE AND ONLY ruling on laches after the noted recess.
(2)
897 clearly states that JJ was unaware that VRNG never received a copy of the Odetics case until after he announced his ruling and Kenneth Brothers (from DS) mentioned to JJ that DS had never received a copy of the case and that he was not aware that QE even provided it to the Court. Upon hearing this, JJ asked QE why DS was not provided with a copy, at which time QE handed one to QE.
To say that this leads a reader to conclude that GOOG bribed JJ during this recess is quite dumbfounding, to say the least...
@ivebeenhad,
To be clear, it was not an "update". The post-trial motions that GOOG filed on 12/18, of which there were 3, all happened to be JMOL's.
On 1/25, VRNG filed opposition briefs (i.e. their arguments to the points GOOG raised in the 12/18 JMOL motions).
Today, on 2/15, GOOG filed their reply briefs (i.e. their counter-arguments to rebut the points VRNG made in VRNG's 1/25 opposition briefs).
Hope this makes things absolutely crystal clear now...
It's a simple matter of judicial protocol. These are renewed JMOL motions that GOOG filed post-verdict that were continuing the same line of argument that they started during their PRE-trial JMOL motions.
And once these motions were filed -- which we all knew about back on 12/18 -- the subsequent opposition briefs and reply briefs were expected by everyone, especially after JJ ordered 850 in granting 846, and established 2/15 as the hard deadline for filing these reply briefs.
Again, nothing out of left field here. Not sure who you're relying on for your info, but you may want to take a step back and re-assess things. As much as it may seem that I am giving you a hard time, I assure you my intentions are good -- after all, after this case wraps up, I would hate for you to have to change your handle to "ive been had again"...
ivebeenhad,
The only thing that's surprising is the fact that you're surprised at what these filings are. These have never been filed before. These are reply briefs that are standard for any post-trial motion after the opposition briefs were filed. Everything was laid out very clearly in all of JJ's responses thus far to all the affected motions today, if any interested party took the time to read and understand them.
Even if docs were filed today, why would you even have thought that they would trigger any rise in the sp? The filings scheduled for today were only reply briefs to 820, 825, 831, and 833 -- with the briefing schedule for 822 not even having been determined yet. Market will only continue to yawn at this stock until JJ rules.
Well said, Tinkerer... ...as many of us know from other plays, uber bulls continually trumpeting out rose-colored visions will ultimately be more dangerous to WDDD longs than any bashers/shorts could.
Caveat emptor, certainly, but there is something to be said for maintaining a measured and balanced view of things, especially related to a name as speculative as WDDD...
They have until 11:59pm (EST, I believe), so stay tuned...
So with a 700M settlement, if you say the sp will hit $12, then you are saying that the market will immediately reward VRNG with a multiple after only its first win? If not, then after taxes, there is no way the BV comes anywhere close to 12, especially with no ongoing source of operational revenue (and Facetones is too immaterial to even qualify for this conversation). Even without taxes, the BV doesn't hit 12.
Multiples are awarded for revenue streams that the market believes can be replicated. Not only does 420/664 have an extremely short shelf-life left, but even if VRNG can replicate another victory (ala MSFT), it is mathematically impossible to replicate the dollars simply because GOOG controls 65% of the search market. There is only a maximum of 35% left to monetize, with MSFT and YHOO each controlling ~15% each.
I would be interested in hearing your thoughts on this?
holy schnikeys! 2.5 years??? Should I be jealous of your cost basis?
Well, I hate to break the news to you, but I bleed purple and gold -- and given how the season's been going, bleeding is the operative word here...
Thanks celtics2011, appreciate the history lesson as I'm just now sinking my teeth into WDDD. Took a flyer on them last DEC, so thought that it may be a good idea to actually do some real DD on them!
btw, you really a celtics fan or is your handle related to some other celtic reference?
Would you mind elaborating on this? Was this an unrelated case against Activision that WDDD's attorneys happened to have been involved with? Or was this somehow related to the current case? Thanks...
@Rain,
New to this board. It seems a lot of the discussions that seem to be butting heads should be split of into two discussions: One on the merits of trading WDDD and playing the catalyst, and the other on the merits of holding WDDD as an investment.
My interest at this time is simply playing the catalyst. As such, although I find merit in some of LOL's points re: risk of failure @ Markman, unpredictable issues coming out of left field whenever a jury gets their paws on anything, unexpected missteps by attorneys, etc, etc, etc, my concern at this time is with the anticipated run-up to the Markman.
2 questions for you:
(1)
What are these 2 new patents that are being raised in this suit and why were they not used in the NCsoft suit? I'm sure this may be a dumb question, but if ActivisionBlizzard is being sued for infringing the same patent/technology as NCsoft, then how did two new -- and relevant -- patents suddenly show up for this suit? Were they acquired subsequent to the NCsoft suit?
(2)
I actually agree with LOL that even with a catalyst play, the key is the build-up of buying pressure. With such a large float and zero funds or other TUT's currently on-board, it would seem a bit of a stretch to expect that they would all suddenly pile on between now and 6/27. Although some funds can buy stocks under $5, the vast majority have charters that specifically prohibit these purchases.
Wall Street doesn't miss layups and the big money players know a lot more than we retail folks. There is clearly something keeping them away currently in spite of how bullish retail investors seem to be.
Ultimately, in the absence of the buying power of the TUT's, how do you see retail bringing enough money to the party to runup the sp?
As you know, there are many examples of both patent plays and bio plays where major catalysts came and went without the widely expected runup.
I've been long WDDD since mid-DEC but am not entirely convinced that this name will runup as most here expect if all we have to support the sp is retail money.
Many of the bullish posts here can be copied and pasted onto other stock boards and they would fit right in -- lots of cookie cutter standard bullish posts. No issue with these types of posts, but just struggling to cut thru the clutter to find real, substantive, and meaningful info to address these concerns.
TIA...
LOL! Same as you apparently!
Not sure where folks are getting their info that the deadline for reply briefs have been pushed back to next week -- at least that's what it seems the posts here are saying anyways... ...so if this is what folks are saying, please provide your sources.
As far as I am aware, the only thing that has been pushed back to next week was 891 partially granting 888 and setting 2/19 as the date to submit the final scrubbed list of items to seal/redact. Nothing substantive with these paperwork motions.
Also, as far as I am aware, there has been no further extensions to the "meat and potatoes" motions that were granted per 846. Per 846, we know that 822's briefing schedule is still TBD, and we know that JJ pre-emptively ruled on 835 already (denied new trial re: laches).
What is still on the clock for 2/15 are reply briefs for 820, 825, 831, and 833.
These can be researched yourself on PACER (if you have an account) or on either the justia.com or us.archive.org sites to verify.
Remember, an appeal is only focused on one specific issue -- the matter that is being appealed. No more, no less.
So, no, appealing by itself does not automatically open up pandora's box and exposes GOOG to laches again.
The risk of an appeal -- again, considering that it would only get this far in the absence of a settlement -- is that VRNG would cross-appeal on laches (i.e. VRNG would specifically file an appeal requesting that laches be revisited).
Also keep in mind that if there is no settlement, that VRNG could appeal laches regardless of whether GOOG appeals or not.
Simply as a matter of strategy, one would expect that -- again, in the absence of a settlement -- both parties would file appeals if for no other reason than to maintain leverage during post-judgment settlement negotiations.
Not that I'm aware of. My notes still indicate that all post-trial motions filed on 12/18 that were covered by 846 are still due this FRI, 2/15.
The TUE, 2/19 date was related to the less substantive issue of submitting a "scrubbed" list of the items that each party still wants to have sealed/redacted.
Oh, regarding the motions, keep in mind that one motion, 822, will not be part of this 2/15 deadline, as 847 was granted by JJ in which he ordered that he will establish the briefing schedule for 822 after all the other relevant motions have been ruled on.
First off, thanks for the feedback. But to be clear, I am NOT trying to pigeonhole edva whatsoever. edva and mikehd25 both provided tremendous value during the course of the trial as they served as our eyes and ears in a venue where we investors were otherwise blind. As sideline reporters, you couldn't find two better ones.
The underlying theme of my post is similar to one I posted on the free forum site, where it really had nothing specific to do with edva really, but more of a general reminder to board members to not let their guards down when it comes to reading anything from anonymous internet handles on MB's. Uber-bulls are just as dangerous to us as shorts/bashers, and everyone here is in all honesty a total stranger.
If anything, at the time of my post, the MSFT suit had coincidentally just been announced and edva came out with his most recent "back of the napkin" post. As such, it was simply convenient to use edva as an example since the timing was just right. I made it clear that edva was not being singled out or being discredited in any way whatsoever. Rather, the point was simply that people should recognize that as he shifts from providing reports of actual events to providing opinions and prognostications, that people need to remember to recognize the difference between fact and opinion and to protect their hard-earned money by vetting opinions and independently corroborating information with other sources, etc, etc, etc.
Hope that helps clear things up a bit?
But if it is "the news" that everyone is expecting (i.e. the announcement of the RR and base), and if it ends up being at least 3.5% of 20.9%, then isn't the consensus estimate that the sp should be fairly valued between $5-$6?
For the sp to only pop into the $4's, it would seem that any ruling or announcement of any settlement would have to incorporate the equivalent of a RR less than 3.5% or a base of less than 20.9%, would it not?
Especially if you are anticipating a RR of 5%, then how do you reconcile the resulting $-value of the award with a sp that will only be in the $4 range?
This raises an interesting question re: patent law that we did not encounter with the GOOG case.
Would you know whether monetization of a patent can only begin AFTER a patent has been awarded? Or could monetization cover past periods where the patent was still in the application process, but for which the technology being applied for was already being used by infringers?
For example, let's say that HYPOTHETICALLY, Samsung was using VRNG's patents in their wireless charging feature of their soon to be unveiled handsets. So this is happening in 2013. Let's say that VRNG's patents get granted in 2014. Should an infringement suit be filed, would VRNG be permitted to claim damages for infringement back to 2013 when the infringement began even though the patent was still in the application process? Or would VRNG be allowed to only claim damages beginning from the date the patent was officially awarded?
Anyone else with knowledge of this, please feel free to chime in as well...
@postyle,
Good to know. So we are slowly figuring out this puzzle here. Would you know any more specifics about the patents that VRNG does hold that is related to wireless battery charging?
I guess what I would be intereste in knowing are the following:
(1)
Is it plain vanilla battery charging that is truly going head-to-head with all the other competitors in this space? Or...
(2)
Is it more of a "boutique" type of product/component/service that is not directly part of the battery charging process, but is either (1) critical in order for the charging process to work, or (2) a component that can make the charging process clearly superior for whoever incorporates it into their charging methodology -- similar to how 420/664 are not search engines and are not the core algos used to generate ads, but are superior enhancements that make the search ads more meaningful and profitable.
Interesting. Do we know for sure that there is only one way to wirelessly charge a cellphone battery (i.e. to conclusively know for sure that if this feature exists in a handset that it MUST be using VRNG's patent)?
First, the 2003 date has nothing to do with when any type of infringement occurred. Constructive knowledge is claimed to have been obtained in 2003 for 420. When infringement actually occurred is unknown -- even to edva.
Bringing up the specific 2003 date in the context of a discussion about damages and the trebling of such damages is irrelevant as the date of constructive knowledge has no bearing on it -- it is the date that infringement began.
And in your original post, the clear inference was that the trebling could potentially go back to 2003 -- this is how JJSeabrook inferred it as well, which is why he replied the way he did, and once again, which is why I initially posted my concurrence with JJ's statement.
I'm here for information, preferably factual, just like everyone else. And if I see a post that includes potentially material information, I'm going to vet it to ascertain the veracity of the asserted statements, regardless of whether it is your post or anyone else's post.
(1)
No one knows what years edva intended to include in his guesstimate of past damages except edva himself. Many of his followers are running around with the interpretation that he is implying that it claws back to 2003, which is what JJSeabrook thought as well based on his reply, which is what my initial reply was simplt re-affirming JJ's position.
(2)
If your intent was to point out that VRNG was going for treble damages, not only is this old news, but for those who may not have known it, I would question why you would use edva as your source instead of going straight to the horse's mouth: VRNG's own official complaint, in particular, points 36 and 38. That would be more meaningful DD to anyone reading these posts.
(3)
If you really want to breakdown edva's post, let's do it. Although edva states that 2003 and 2008 are the dates when MSFT had constructive knowledge of 420 and 664, respectively, what he cannot possibly know is WHEN exactly MSFT began incorporating the patents into their search algos. Knowing about it and beginning to use it in day-to-day operations are two completely different issues. Was it immediately? Or was it only incorporated as part of the launch of Bing in 2009? Did they use the patents as part of Bing's predecessor, LiveSearch? If so, when did they start? No one knows this. And this is a pretty darn important piece of information if you want to try to even begin to quantify past damages, wouldn't you say? Based on my calcs, it appears that edva may be assuming infringement occured during this entire past period. Whether that is true or not, I don't know and he certainly doesn't know either. Only VRNG knows what they believe to be the case and their complaint did not specify this information.
(4)
If you reverse-engineer edva's estimates, he is crudely extrapolating his guesstimate based upon the ~65% share of the search market that GOOG has and the ~15% share that MSFT has. Which begs this question that none of us knows the answer to as well: How does edva adjust, if at all, for the fact that GOOG has clearly proven to be much more efficient and effective at generating search/ad revenues than MSFT has? MSFT has clearly struggled in their efforts to monetize search advertising. In essence, extrapolating MSFT's revenues (and, therefore, estimated annual past damages) based simply on market share (i.e. "eyeballs") is misleading as it assumes that both companies are able to generate comparable "dollars per eyeball", and this is clearly not the case.
Again, point of all this is not to argue with anyone, but simply to encourage folks to do their own DD and not get too comfortable relying on others' posts/blogs. Vet it, corroborate it, verify it.
Are you serious??? And why, pray tell, would you think that a patent owner could be eligible for trebling of damages for years in which damages aren't even eligible to be claimed??? Trebling, should it be awarded, would only apply to damages related to the period of time that is eligible to be claimed, which, in the MSFT case, only goes as far back as JAN/FEB-2007 based upon the JAN/FEB-2013 filing date of the suit.
But hey, don't take my word for it. Go ahead and put Edva's trebling of damages back to 2003 into your valuation model and base your hold/sell decisions on these expected valuations and let me know how that works out for you.
JJ's right. Past damages cannot exceed 6 years. This means JAN/FEB of 2007 and NOT 2003 as the starting point, based upon a JAN/FEB-2013 filing date of the suit.
Patent law 101 fellas... ...there's a reason VRNG also only claimed past damages back to only 2005 when they filed the GOOG suit in 2011...
Gotta know what you are investing in folks and be able to separate fact from myth if you want to be able to value your investment and any expected risk/reward properly...
I appreciate your responding. To emphasize again, I am not trying to attack you by any means, but rather simply trying to vet the information -- and as any journalist learns in journalism 101 (by the way, I'm NOT a journalist!), includes vetting the source to establish credibility.
I can easily respond to each of your points, but the Mods will likely delete my post again, so I won't waste time doing so here. HOWEVER, if you truly are sincere in establishing dialogue, send me a PM and I will be happy to discuss any and all matters with you that way.
And I would love to share a beer with you when this chapter of VRNG's history is completed.
FYI, the filing actually shows 2.1M and not 1.2M -- unless of course, I have suddenly become dyslexic...
LOL... "eventually"... the dreaded word. At least I'm glad you said it and not VRNG. Rarely does anything good ever follow whenever a company issues any kind of statement that begins with the word "eventually..."
@xlt,
There may be an obvious answer to this question, but as someone who is simply a casual trader and not a sophisticated trader, I don't really get it, so I'm going to ask anyways:
If someone (whether an individual or a TUT as per your example) wants to limit their exposure to a specific position, then why don't they just lower their basis? It seems a bit of an innefficient use of capital to devote $$$ towards a financial instrument (i.e. the various options in your example) whose purpose is not to generate positive returns -- rather, its primary purpose is to limit losses.
Just limit your exposure to an amount you are willing to lose and devote the capital that would otherwise have been spent on hedging toward other investment opportunities that your DD has indicated are screaming at you to take either a straight long or short position on.
I guess in my simpleton view of this, it seems analogous to playing roulette in Vegas and betting $1,000 on Red and then betting $600 on black because you're scared that if Black comes up that you don't want to be down the entire $1,000. Well, this is very clearly a terrible bet for several reasons and every pro gambler will tell you as much -- so why would this seemingly exact same approach to investing be deemed "smart"?
Not trying to argue with you, just trying to understand your reasoning...
@xlt,
So in your example, the cost you pay to have this hedge is that your avg cost basis is now $4.40 instead of $3.50, correct?