LEXR is a lot like MU, SNDK, RIMM and RMBS having to go to court to force payment or wanting avoid paying royalty income. License and royalty income currently only represents 2% of sales of $189 M in quarterly sales for LEXR but potentially shareholders have a nice special dividend payment if Toshiba has to pay up. So I think stock going to be bumpy like RIMM/NTP proceedings.
(from LEXR web site)
Lexar Media, Inc. v. Toshiba Corporation and Toshiba America Electronic Components, Inc.
After a six week trial in the Superior Court of Santa Clara County, the jury found Toshiba Corporation and Toshiba America Electronic Components, Inc. liable of breach of fiduciary duty and theft of trade secrets and awarded Lexar over $380 million in damages. The San Jose jury also awarded Lexar an additional $84 million in punitive damages.
The total damages awarded to Lexar in the case are $465.4 million.
However, for SNDK
Product revenue was a record $530 million in the third quarter, up 45% year-over-year and 17% sequentially.
Revenue from license and royalties was $60 million, up 40% year-over-year and down 2% sequentially.
I think SNDK and LEXR are pretty much in a cross license situation.
The big question is what type of hoops does SNDK and LEXR have to go through to collecting royalty from new MU venture which is where they will make most of their profits.
At some point, MU could make flash as unprofitable as DRAM and gross profit margins at SNDK (37%) could falter and LEXR will be forced to abandon the retail porduct channel of reselling memory products including flash made by Samsung or others.
I just don't see it happening soon for SNDK but you may already seen LEXR fold up their retail presence under the growing pressure from SNDK at the high end and lowest cost Asian suppliers for Walmart. I haven't checked Walmart shelves this fall since they must have started stocking shelves in OCT to see what their are carrying and what they will sell out before X-mas.
AI
