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I feel 100% vindicated, as this is virtually exactly the outcome I predicted months ago (what is 0.5% among friends??). Thanks JJ, you got it right!! Congrats fellw longs! Next up, GOOG loses their appeal.
This is not just an I told ya so - but read my posts from months ago and you will see I have called that the Court would use the 20.9% base (not at all alone on this!), would likely require another negotiation before ruling on an RR rate and that the burden would be on VRNG to establish the alleged work around infringes, all of which is in the Order. I also was able to discern what the Court would do with the Becker deposition issue well in advance. This means I have been correctly interpreting the law here, and properly applying the facts to that law, which means (and the real point is), my take on the rest of the litigation process is more likely to be correct (but of course not guaranteed.) This continues to convince me to hold my shares. To restate and be clear - I think no negotiated rate, the new system still infringes, and the royalty rate will be 5 or 7%, depending on the Judge's mood the day he rules. I also think GOOG's appeal is not at all likely to be successful, especially given the basket they put most of their eggs in was taken away by the USPTO just a couple days after they filed their appellate brief. I think we continue to get wild swings here, but I am holding til (final) judgment day. I have tired of the day to day review of this stock, but not the stock itself!! :) Please pardon if this is too self-congratulatory. It is not intended, but I wanted to make my point. Good luck to us longs!
I promised myself I would ignore ths stock and not sell a share until after we get a favorable appellate ruling early next year, which I believe is highly likely. That was easy until recently. The '420 ruling made clear what long timers have known all along. The USPTO was a sideshow. Now, with the supplemental damages ruling, VRNG is getting tons of attention. For my part, I will be watching how VRNG handles 3.75 ( additional warrants in the money), 4.25 (additional sales available per sales trading plans by insiders), and 4.35 (the price of last year's secondary.). I don't have an itchy trigger finger yet.
Separately, thanks to the posters here. Especially as mostly only a lurker for the past couple months, I have enjoyed nearly all the posts I have read.
Yes, agreed! In economics terms, the available supply of shares (the float) has been reduced because more shares are in stable hands. Lending the shares makes no difference because they were able to be lended before the transfer to stable hands (if they couldnt be lended after purchase by stable hands, it would double the effect.). Stable hands reduces the velocity, or turnover, of the shares making the same shares unavailable over time to new buyers and forcing them to buy different shares. The supply curve shifts to account for less supply and the demand curve stays stable, resulting in a durable higher price for the same level of demand. And, BTW, the gains come AFTER the reduction in supply, not before, so the durable price gains should show up AFTER the actual addition, so starting in July. There should be an initial increase and then a slow rise to a new stable price range.
I agree it's pretty odd!
We are in the Russell 2000 if we are in the Russell 3000. The Russell 2000 is the BOTTOM 2000 stocks by market cap in the Russell 3000. The top 1000, appropriately enough, is the Russell 1000.
BONUS - also added to Russell Global Index. EOM.
I apologize for being unable to explain my points clearly enough for you to fully understand them, and that includes whether I am merely arguing semantics. Have a great night as well.
I am afraid that grammar is not in the eye of the beholder, your fact and opinion statements were listed, fact (1), fact (2), and fact (3). Reading it quickly or slowly makes no difference, I went back and tried it both ways and came up with the same meaning. Ignorance may be bliss, knowledge may be power, but civility is priceless. Score points on arguments, not trying to make snide comments against others.
Calling an opinion a fact does not make it one. Prices are facts, reasons for price movements are opinion. The day before the Becker depo issue arose again, the price was 3.01, the day after it was 2.83. That means the price move is likely the result of the Becker issue, but that still is opinion. With shorts standing on the neck of this stock, valuing a move over time due to any one exogenous event becomes troublesome. Perhaps I would have had less quarrel if the original post stated the early April rise was a one day event. But you link events weeks apart to attempt to come to a conclusion. Past the day of announcement, the number of variables are so great no one can state as fact that a single variable caused valuation, or a lasting change in valuation.
Perhaps if you re-read your original post, you will understand my point better, as you label both the price (a fact) and the reason for the price change (opinion) as facts.
For me, I dont think this stock now trades in the least on the MSFT suit or settlement, except for the day of the announcement of the settlement. I am not sure about your "facts," but it is a fact that the Becker deposition issue arose again April 16th. My take is that the stock went up on anticipation of resolution of the RR motion. You dont have to agree, but stating opinion as fact doesnt do anyone any good, even though I do value your opinion.
This brings up an interesting point. Does the settlement cover future royalties? It covers the settlement of past damages as alleged in the complaint, but perhaps not future royalties. Another question to be answered definitively.
I respectfully decline to get into a debate on the "true value" of a company or the role of "speculation" in the valuation of companies. You are welcome to your opinion, which I do not share. Lets leave it at that.
Lets not get all in a twist. I stated that there are non-financial events that can mitigate, but perhaps not eliminate, business risk and lead to a re-valuation of a company. Five examples - (1) a defense thought to be potentially valid, such as statute of limitations, is held invalid; (2) the defeat of a piece of legislation that could affect enforceability of patents; (3) the award of a patent; (4) the declaring of a patent standard essential; and (5) perhaps most supportive, companies in the patent space are routinely re-valued on the results of a favorable (or unfavorable) Markman hearing.
I don't agree, in fact that is silly, but admire your attempt at a witty reply.
The universe of positive events that can lead to an increase in the valuation of a company is not limited to those that provide immediate financial gain. For but one relevant example, completed, favorable steps towards full implementation of a business plan can remove time and business risk, even if the risk is not fully mitigated. And you lost a lot of credibility, IMHO, when you added that bit about the USPTO. Just sayin'.
Do you call ballgames after the third inning? It isn't even noon, for crying out loud. I know it may be "accepted wisdom" that this stock won't hold its gains today, but, stay with me here, what if the fact of the HJJ ruling and inclusion in the Russell result in it holding its gains into the close? I am not saying it will, but it seems we have many generals declaring victory in the midst of battle. Absolutely no disrespect intended, just an observation.
I agree, I have been truly taken aback by the amount of misinformation, perhaps disinformation, and flying assumptions this stock engenders. The best advice you have already given, (paraprashing) keep your feet on the ground. Thinking things through rationally and logically can be a true edge in the stock market, especially with respect to VRNG.
Right after I read all the articles on how the USPTO proceeding will affect the ultimate resolution of this case.
Investors continue to view VRNG news through their personal filter. Longs remain optimistic, sceptics remain sceptical and shorts remain pessimistic. Nothing new.
My view on the deal after digesting it some is this. I am disappointed with the lack of transparency. Whether the deal is a "good" deal or not, I am willing to trust management. As for the stock price, which is my primary concern in the long run, I believe the stock is undervalued. We will see what this deal does to the price in the next day or two. I think it will be a straw on the camel's back that will break the long jam on valuation. Will it be the straw that breaks the camel's back? I don't know. I don't think so. If it gets the share price above 3.33 on a sustaining closing basis, however, then add the technical picture improving and the straws continue to add up. At some point, the camel's back will break, I believe. This will have a valuation north of $4, which I strongly believe it deserves presently. (I definitely am not in the double digit crowd, but 4-6 with a good GOOG settlement seems fair to me. The range differs based upon numerous assumptions too many to get into here.)
I am not sure there are bigger players that "know more than us," especially at this point, that's another assumption. The stock has been open 30 minutes or so. I don't think we can draw any conclusions yet. If this closes about 3.33, I am happy. If not, c'est la vie. The big fish has always been Google. I still think in the larger scheme of things, this is a positive. Others are free to have other opinions, that's what makes a market. Best of luck to both of us!
I agree with this 100%. If you don't trust management, you shouldn't be in the stock in the first place, I think. If this causes you not to trust them, perhaps it would be best to sell. Personally, I have seen no reason not to trust this management, and just the reverse, every indication they know what they are doing.
I am unclear how we know these patents were "thrown in." Was anyone here in the negotiation? I guess we are making an assumption based upon "industry practice." I am not sure that is a valid basis to conclude anything until we know a lot more about the patents.
Perhaps if we all waited to see the market reaction, we would have another important piece of the puzzle in evaluating this deal. If the price rises substantially, it certainly would alleviate any concerns I may have about the current non-transparancy of the deal. That said, it is an unambiguous positive for the stock. There is no need for any wringing of hands. This also frees up the lawyers for the next big litigation.
A close above 3.33 puts us above the 50 week and 200 day moving averages and considerably improves the technical picture. As for the settlement, I haven't the slightest idea of its total monetary value, but its non-financial value in validating VRNG's business model and setting VRNG up for the future is considerable. Good news!!
Thanks Arp! EOM.
Good morning all! Just a couple quick notes - after having thought about it for a couple days, please allow me to jump ship and agree with what I think is the majority that HJJ's wording that the RR ruling is "ripe for ruling" means a mandatory settlement negotiation period is NOT likely. Also, just FYI, the Nekkei is two days in to a classic four day, over weekend pattern for a very large decline Monday, if the pattern holds. If it does hold, then the bottom will be sometime Tuesday in that market, with a reversal that day. Does not mean much for VRNG, I think, but it may mean this afternoon in the US general market there will not be a rally. Speculation for sure, but I guess this is the place for that! :). Have a great Memorial weekend, I plan to!
I agree settlement talks very likely are a waste of time here. But, I am not relying on just VHC, this is a standard practice it appears from the case law. Does HJJ have to do it? No, absolutely not. Lets all just agree we hope he does not and just wait to see what HJJ does (as always!)
I hope I am wrong too! And, even if ordered, it could be way less than 45 days. There is no set time frame, that's just what was ordered in VHC v. Apple. Better prepared than surprised I think.
Yes, its been a while! Maybe 6-9 months more for full value (not sure what that is until HJJ rules.). You are referring to the "dialogue" in the motion papers back in January when GOOG (successfully) sought to delay the RR motion and have the JMOLmotions heard first, I believe. Hang in there, we are closer to the end than the beginning! :)
Near as I can tell, there was a pretrial order to attempt to settle the entire action with a magistrate judge that later recused himself from further decisions in the case. It does not appear a post trial negotiation ordered by the Court on the RR has taken place. I am still very open to correction by anyone with evidence otherwise! :) Thanks.
I do not recall that. I recall that the issue arose in the context of the request to delay the RR motion by GOOG back in January, but not that HJJ ordered negotiations. GOOG merely asked for the delay in part for settlement negotiations, and VRNG said there hadn't been any contact from GOOG to try and settle. It would make a difference, I think, if HJJ post trial already ordered settlement negotiations that failed. Anyone with a clear recollection on this issue? Thanks.
The bump from 3.5 to 5 percent is for superior bargaining position than prior to the jury verdict. The bump from 5 to 7 is for willful infringement. "Virtually guaranteed" is probably is too strong, but I personally believe the Judge would never go below this, especially if he gives them 45 days to negotiate and the parties fail. At least 7 of 20.9 because the range for increase is 20.9 to 40 percent per the evidence, and I have seen several examples showing a much bigger bump for wilfullness than from merely 5 to 7 percent, which equates to a jump of 40 percent for wilfullness. Double is very common, and triple and quadruple appears in the case law.
I hate to be the one to point this out. The next ruling from the Court could be (not sure how likely, but pretty likely) an order to the parties to try and negotiate a settlement. In VHC v. Apple it was 45 days. These periods of negotiation seldom work. The Court then sets a RR after the negotiation fails, if it does. The are upsides to this, however. If there is a settlement, there are no appeals, and no waiting for payment. Also, if there is no negotiated settlement, then 7% of AT LEAST the 20.9 % base is virtually guaranteed. But hats off to the Seeking Alpha article today that at least led me to remember this fact and do the research I was able to do. And remember MSFT could settle at any time.
They are asking the judge to limit the RR based upon the work around. No work around, no argument to limit the RR. That is the only "validation" they seek, and why VRNG properly points out if GOOG had a work arond, they should be arguing for a lump sum because of it, not a reduced RR.
Yes GOOG has to pay from judgment to May 11 unless they win on appeal. This goes back to our earlier disagreement regarding required infringement proof for a work around. That issue aside, whether the Judge requests briefing or GOOG files a motion to set aside the RR from May 11 forward is inconsequential, the issue will get before the judge some way.
Also, yes, GOOG must first come forward to show a potentially non infringing alternative is available, but it is still up to VRNG ultimately to prove it infringes. This only means VRNG only has to do nothng to prove further infringement until GOOG proffers to the Court an alleged work around.
You are right, I should have been clearer. HJJ will rule on the RR motion, as he must. This RR rate will apply at least from judgment to May 11, 2013. He likely also will set discovery and briefing on whether the work around affects the RR from May 11 onward (and I think the RR will not have any expiration date other than April, 2016 in his order. GOOG would have to prevail on the work around and get a new order.)
I do! But being a lawyer, I hate absolutes, as I have been thrown a curve or two! I would put the chances like this: 1% adverse ruling for VRNG on work around (literally, one in a hundred, as per the evidence and the fact of an incomplete record before judge), which is as low as I ever go; 9% judgment on work around for VRNG as a matter of law (judge is sick of case and GOOG); 90%, he does not rule on it but sets discovery and briefing.
I think there should be a slight caveat to what you stated. Technically, the work around is before the judge in the sense that GOOG brought it up. It is against precedent and unlikely in the extreme, but the Court could make some detrimental finding to VRNG on the work around at this point. That's just me being careful and VRNG could of course appeal. Far more likely is the judge, were he to rule on the work around at all, is to find the alleged work around still infringes as a matter of law based upon the proffer of GOOG in their opposition as evaluated against the trial evidence. By FAR the most likely, however, is the Court sets a discovery and briefing schedule on the work around.
It bears special emphasis that GOOG is still asking for a running royalty and not a lump sum, which makes no sense if they really have a work around. I, for one, am not worried (opinion here.)
And, as always, thanks for your posts JJ!