Replies to post #64307 on XpresSpa Group Inc (XSPA)

[Rainmaker80]

Actually No it doesn't seem that way.

I suggest you read my past posts where I discussed how the ZTE settlement actually plays into VRNG's favor, even at such a low rate

Your comment seems to assume that companies would rather end up paying more "all in" (legal fees, injunctions and eventual ruling) out of some form of spite vs act rationally and paying less.

To me when I see such comments I generally view them as highly irrational. CEO's and CFOs answer to boards and shareholders, they make the decision that is in the best interests of a company both short and long term.

In the cases of Google and ZTE, it was clear that VRNG was expecting and asking 100's of millions of dollars. A simple cost benefit analysis by even a layman would tell you, it made sense for those companies to fight via legal channels.

Once ZTE set the bar so low, as I said in the past, they essentially took one for the team (ie spent a great deal to lower the rates that most others will likely benefit from). Now, they didn't 'collude' to take one for the team, it is simply a figure of speech and the result of what their long fight created.

So the question investors must ask and yourself as well, is do you really believe that a company like Huawei, that makes billions per year, would choose the following


1. Multi year legal battle costing

A. $20-40 million
B. Global injunctions causing disruption via their supply chains to their customers and another potential $30-50 million or more (think Romania ZTE)
C. Likely a significantly higher number than whatever the rate of $21 million equals on a percentage basis that ZTE paid (as ZTE clearly paid a number well below what "FRAND" is)

Effectively - pay upwards of $100 mil or choose to pay


2. $35-45 million (guestimate given their size relative to ZTE)


I think common sense points you in the right direction. Do not forget the Chinese government has endorsed these patents so arguably the chinese market is also 'in play' on infringement now.

I suppose many here can choose to think company's act out of spite. As I have said over and over, it never is out of spite, it is always an economic decision.

The economic decision here for people who are rational is pretty clear.


Good luck to all REAL LONGS