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Company stock option plans which give shares instead of salary are commonplace in publicly traded companies ….. companies that don’t offer them are more the exception than the rule .
I’m not defending the practice , it’s just how corporations reward and motivate management, and some of these plans ARE ridiculously excessive ( look up the esop awarded to guys like Jamie Dymond)
This is not an unusual thing. Netlist uses this system of compensation as do thousands of other corporations
I took his question to mean he was asking about royalties for us of the IP after the judgement .
I answered him re the Motion filed over the weekend which appears Netlist is looking for these royalties to be clarified by Judge Gilstrap
I don’t disagree on many of your points. I’ve been investing 48 years and these stock option plans piss so many people off for multiple reasons . The most obvious is that they’re often viewed as too generous ( especially when a company isn’t making money or doing poorly) and that every time they sell shares to pay the taxes, it looks bad ( optics)
They’re almost never questioned however when a company is doing well ( is “ the CEO deserves it , the stock is up x %!)
The truth is that corporations use them to conserve cash by issuing shares instead of burning cash or incurring debt ( a kind of good thing) at the expense of more dilution to existing shareholders.
And it seems that the “normal “ way of handling the taxes owed is by selling a few of those shares to satisfy the tax obligation.
I agree on the optics . To me , it wouldn’t be asking alot of Chuck and Gail to forego or reduce their sales to satisfy taxes. I’m not sure Id go as far as saying they shouldn’t receive any ESOP shares as these are typically a part of their comp packages.
But in my experience I’ve seen lots of executives selling shares in promising companies which makes me scratch my head and wonder why also
Correct . Would then assume Netlist would pay the anticipated associated income taxes with those funds .
Much the same way as with normal payroll taxes.
Funny you should ask , as over the weekend Netlist filed a Motion with Judge Gilstrap in Texas to rule on exactly that issue …… The motion is sealed , and won’t be visible for a week or so ( usually) but Netlist has already taken first steps to address ongoing forward licensing / royalties with Samsung with this request .
Next up , should be a motion to compel reimbursement of legal fees…. We are still waiting on that one as well.
Correct . As much as we all dislike insider sales , the correct way to view these transactions is as one would view payroll withholding taxes .
These shares represent or are a part of Gail and Chucks annual income . As such , taxes need to be withheld and paid on those amounts, exactly as if it was their salary .
One could question why an executive wouldn’t just pay the taxes out of pocket and not sell those shares to pay them, but that’s a different question .
I agree, and very well said. Watching the live trading for the last 2-1/2 years I’ve come to exactly the same conclusions.
I was able to find the source of the comment, it came from poster “investpn” on 8/16 on Stocktwits and was from his memory of the question and answer session that Gail provided at the shareholders meeting ( that he attended or watched, not sure which)
She stated that the offering was private and to a group of longtime, supportive shareholders.
Doesn’t change much of anything , but kind of punches a hole in the theory that Micron was the purchaser IMO
It was on the ST board last week ,I’ll look to see if I can find the source , but as I recall it was from a regular .
I agree on the conjecture regarding Micron / Netlist negotiations . There’s a lot of little “ tells” happening, but if history with Samsung proves , these companies don’t seem to be willing to settle on anything but are obstinately kicking these judgments and claim constructions as far down the road that they can .
Yep, I’m with you , similar for me , decided when it was $8 to hold for $15 , then watched it go to .87.
Patience, patience, patience. And I need to stop looking at it 20x a day
My issue with that theory is that Gail Sasaki made mention that the offering was made to long time supportive shareholders, or something to that effect .
I don’t see how Micron would fit her description . Thoughts?
Good guidance, I appreciate the post . There is such a huge disconnect between the share price and the documented rulings in their favor , it can confuse the average investor who has never seen this type of price behavior in an OTC stock .
I do wish Chuck and crew would take some sort of token action to telegraph their support of the shareholders. Not being critical, but they have to know that the 35-40% beat down taken by us ( and them) during that last offering was a pretty big punch to the gut.
I’m long , but I’m not gonna lie, the price action here makes me queasy. Hoping for some stabilization .
More likely to pay his bar tab
The fact that Netlist did not oppose should tell us that this is probably not a negative thing .
Netlist wouldn’t agree unless it felt it was advantageous or not harmful to them. Why else would they willingly agree?
Let’s see how it plays out, but as others have mentioned on ST , this could be Micron and Netlist agreeing / allowing the Samsung chips to fall first .
I firmly don’t believe anyone on the Samsung team has Covid , and I’m pretty certain Netlist would know also .
There’s tactics being employed here .
Trying to not let my mind go there ….. but this is looking pretty promising….
Interesting for sure. Very low volume sleepy day and then that sudden big buy after 3 pm
Hmmm,
I like your take. I just don’t trust Samsung as they’ve proven to be dishonest and now discredited .
Hopeful someone on their legal team can talk reason to them and make em understand you gotta play by the rules of the sandlot you’re in . Our sandlot is the USA. Our sandlot , our rules , or go find another sandlot
I hope you’re right , and I hope we somehow avoid more foot dragging appeals . Regardless, todays verdict was a ringing endorsement for Netlists tech and it’s pretty brilliant legal team headed up by Sheasby.
I still can’t get over that they won every single motion …. All those check marks in the correct columns, just an incredible trouncing of Samsungs guys. Like a 60-0 football score
I think you’re right , and the more I think about it , I’m not sure an appeal of this judgement solves the bigger problem that Samsung has….
Namely, as of today they can’t sell any existing or future inventory with Netlist tech in it. How does stretching this out with appeals get around that issue?
They said that Netlist tech is essential and that there was no alternative . How would an appeal make that problem go away ?
I’m still amazed that Samsung rolled the dice on this one and didn’t settle . Maybe they tried ? Maybe Hong said “ he’ll no”
These mega companies are arrogant and crooked as hell though and don’t roll over easily
Samsungs arrogance bit em in the ass today
Not sure it’s a sure bet that Gilstrap will automatically apply up to 3X damages.
He knows that applying those punitive damages will increase the chances Samsung will appeal . And if they appeal, they tie his court up for who knows how long
I hope he does of course, as a 1.2 billion payday sure beats a $300 -600 million one .
We just don’t know what kind of mindset Gilstrap is in , but I think we’ll all know next week as he has the reputation of not letting things sit.
The only thing todays $302 million verdict addressed was previous damages
Licensing and royalties going forward now need to be negotiated between Netlist and Samsung . How much these are is anyone’s guess , but based on todays numbers should be significant.
The great unknown gorilla in the room is punitive damages ( if any) which are not decided by the jury but are at the judge’s discretion . They can be 1X , 2X or 3X the original , or possibly some number between those “X” s .
Much discussion whether Judge Gilstrap will apply one of those multipliers based on the fact that the jury found that Samsung “willfully “ infringed all patents in this suit. There’s definitely precedent for it .
It’s anybody’s guess , but theoretically todays judgement could triple . Or it could stay at 302$ million PLUS forward licensing/ royalties.
Conservatively the total value of this judgement plus royalties could be $600-700 million , but could go as high as a bit over $1 billion
And keep in mind, Samsung CAN appeal and try to kick the can further down the road …. In fact I would be very surprised if they didn’t appeal . It’s what lawyers do
Next week is going to be one of the most interesting in Netlists history
I think Samsung definitely screwed the pooch for the last time today.
Ouch , that testimony is damning …..
Netlist……. There Is NO Alternative
It could be as simple as there just aren’t enough eyes on this company ( yet) and the overall market is very stagnant / crappy right now .
Everyone keeps comparing this to the run up in 2021 with SK Hynix , ( me included) but this is a completely different retail market with way fewer participants I think. We’re not getting 2-5 million shares traded days which would tell us a whole bunch of eyes are on it.
This allows much more activity by market makers keeping pps in a very narrow range .
Hopeful this changes with any good news from Texas , but for now , frustrating to be treading water with so much seeming potential
My gut says it’ll happen, just maybe not on my time line , or when I expect it to happen
I’ve been thinking the same way for some time . The share price doesn’t ever seem to reflect the situation
Exactly. Odd situation occurring on Friday . I was thinking similarly.
Why discuss damage ranges before the case has even begun ?
Not positive if true , but @robcobb over on ST indicated that the discussion of the $ amounts by the judge was done without the jury in the room . Not sure if that matters or not .
I too was a bit surprised though to hear anyone throwing out numbers in the courtroom regardless, especially on the first day . Pretty confident Judge Gilstrap would be ultra cautious about doing anything that could cause a mistrial though
Great points . I appreciate the time you put into this , it is extremely well written
“ Johnny Kryron” , The Man , The Legend, The Fraud
Soon to be on Netflix .
I think you’ve nailed it .
This has been discussed a lot and overwhelmingly the sentiments’ mirror yours.
The switch to otc allowed Hong to carefully navigate the long legal proceedings without constant fights with a BOD over every little decision.
With this decision Netlist is “light on their feet “ and can make rapid fire decisions .
There’s pros and cons up this of course . But once the legal mess is mostly cleared up he’s publicly stated it’s back to NASDAQ and a BOD.
Thanks , I’ve been here forever, ( and ST) I just don’t post much here as all I have are opinions which as my wife says are worth exactly what she pays for them.
Oh, completely agree.
Hoping for a reasonable settlement with forward licensing vs a protracted legal win and then delays and appeals is all . I wasn’t as gray when this all started as I am now !
Seems reasonable. Let’s hope Samsung sees it that way .
True, the ultimate insult after losing 99.8% on this “ investment “ would be to owe the broker $25 to sell it, lol.
I keep my shares as wall art and wish JB well in whatever new illicit activities he’s cooking up .
I keep 10,000 shares as a gentle reminder to myself to never again invest in a startup with a convicted felon who is the CEO .
Lots of people feeling exactly like you are , but I also think this “turd” will eventually shine ( or at least smell better)
I agree that Hong and crew have not done everything they can / could to keep the share price reasonable . Too many long, long gaps with zero communication to shareholders. But unlike most OTCs this one has real products, sales and potential catalysts that if triggered , could create enormous opportunities for the patient .
I’m trying to be one of the “ patients” but some days it’s not easy !
Hang in there , I still believe our day or days are coming …
Sounds like it …. Hong specifically said they were “ working with Netflix” in todays fireside chat ( see Netlist Investor Relations tab on their website)
I guess we now know for sure it’s NFLX, and that can’t be a bad thing
Amen Mike, well said.
Yep, already reached out to them 2 days ago , and have already had multiple email discussions with their corporate sales director .
Which prompted me to check here next. Due diligence , right?
I’ll keep checking to see if maybe they or I have missed something .
Have also reached out to Sun Pacific directly this morning. In all fairness to them I’ll wait a day or so to hear back from them to report what FoxESS has told me .
It's a pretty simple question, and no I'm not looking to shoot myself in the foot.
Sorry if I asked a difficult question , but it's a reasonable one.