Hi Rain,
I do "love" honest discussions and disagreements of points of view done in a respectful way. I think our country would benefit greatly from more of it in more influential venues than discussion boards!
Point#1: "........asssumptions of irrational behavior, driven by spite rather than economics...... No, I actually MAINLY DO agree with you on this. I know that hubris by BOD and CEO's can be a huge influence and they can get away with big egos to the detriment of a company for a long time, so I think you have to acknowledge that this COULD be a factor. My argument was that companies might view short term financial loss, expenditures in losing court battles, to be worth LONGER TERM financial gain by discouraging other law suits, particularly when a single judge has the power to overturn even the most carefully articulated argument. When a company is a foreign national (Huawei), there may be other extra judicial influences that may be brought to bear in the form of bribes, manipulation, etc etc, that are not as easily available in this country. My argument here may be obviated by your #7. If so, I have to defer to you and plead my ignorance.....
Point #3 Agree that it is primarily an economic decision, esp since for GOOG, this could have been a very significant sum if recurring royalties were granted. ZTE, I address in my next 2 counterpoints.
point #4. Did ZTE "lose" in this battle? I would submit that neither you nor I know. You can surmise that ZTE spent $50 million, but what was the other side of the equation? How much did that AVOID losing by pursuing this battle. The murky nature of the outcome does not provide us this answer. So, I suggest that it is possible that ZTE could view this $50 million as well spent considering the outcome.
Point #5 I am NOT suggesting that ZTE battled out of spite, but rather they assessed that the economic outcome was worth the fight. What were they going to pay VRNG if they did not fight?? Do you know?? I had seen estimates by forum people suggesting above $100 million. If true (and I have no way of knowing) then the $50million spent saved ZTE $50 million.
Point#7: I will defer to you on this.
Point #8 We both agree that only time will tell. I did not state that you were TOTALLY confident, only that you had properly done your DD and were comfortable with your position.
Extra point: I do not have access to the level 2 quotes you follow, but am assuming that today's dip is the result of shorting activity since no news is coming out. This was my prediction....I was just a couple days off. I am using it as an opportunity to cover my covered Feb call sale on 5000 shares which effectively increases my position. I won't be surprised if tomorrow you post that you and your group were picking up a few more shares!
Good luck, Rain. If I frustrate you with my lack of understanding of your very clear posts, chalk it up to MY shortcomings and not yours and don't let it be a PTSD trigger! Those can be buggers to deal with, but propranolol is very cheap and can help with the sympathetic nervous system upregulation! lol
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