Hopeful - if they're licensing the technology, as their "way to market", then what are they going to "ship" to EC? In your extensive comments you mentioned several times RIM will not be a traditional manufacturer and shipper of chips, but a licensor. They're either one or the other, or a combination, but you seemed to be pretty clear they do not plan to sell physical product.
I have a hard time buying Brad's comments that we will never know who is using RIM product; that rather we essentially have to trust that if someone like EC places a PO and then revenues are realized on RIM's income statement then there is obviously an "end-user" at the other end of the transaction.
Trust me - there isn't always a customer on the other end of a PO between a distributor and a "manufacturer/source". Without EC providing evidence of a successful installation I'll continue to believe RIM is full of it and this is their latest plow to make it appear they're doing something.
Even if they do move product (I assume hand built FPGAs) through EC onto "college campuses in AZ".... who's going to make the ASSP (under license), and when, that will fuel RIM's "revenue/profits"?
If they're not going to manufacturer, only license, that means they'll take a VERY small cut of the end product's ultimate value. That also means they'll have to sell 3-5Xs as many "chips" to get to the same place they could have chosen to get to by manufacturing directly - which by the way has been their long standing "strategy". So I see they've pulled another 180 degree about face on shareholders by going with "Narin.Org" and a "Licensing Model". The latter is clearly a much less lucrative approach for RIM and their shareholders.
With 500-900 million shares out now and over the next 1-3 yrs - their licensing fees aren't going to go very far.
$100MM..... 5-10% licensing fee (and I'm being very kind)... $5-10MM pretax earnings... less expenses (Ray and Brad's gigantic comp packages, just for starts), they're probably going to end up with a 2.5-5% post tax earnings (and again I'm being extremely generous in that estimate).
$100MM in revenue - $2.5-5MM in earnings, divided by 500MM shares = 1 penny per share earnings, best case. A multiple of 20 gets you 20 cents. Lets get crazy and say 60 cents.... (60X EPS). If they only earn 2.5% post tax, then you halve these numbers to 10 cents, to 30 cents, for a 20-60X EPS.
My guess is Spoke and Jules will have their own estimates for "licensing fee %s", though regardless of their industry knowledge it seems pretty clear "licensing" vs. Manufacturing is a pretty cowardly way to go. It says "we know we can't raise the money, we know we don't have the skill set to manage a manufacturing and distribution process, and clearly it's easier to simply "license" and why would we make it any more difficult to run RIM"? We make a ton of unearned income... the story is unfolding in such a way that we can keep the house of cards going... so lets "license".
Hopeful - your screen name is apt. You need to be very Hopeful to be in this investment. The company's performance utterly lack thus far IMO.
AI
