Very interesting that Dragonite is going ahead and finding every possible entity to sue on patent infringement.
I think you are right in that if DGTLF does win the law suits, especially the critical one between them and Blu cig (BLEC) then the company will be in a position to effectively have a monopoly on the emerging ecig industry.
I think many on the sidelines just watching DGTLF or HK:329 do not realize that IF these lawsuits are won and the company receives large inflows from settlements THEN the payout could be significant. The company has already done a great many issuances and mergers/acquisitions, has a healthy balance sheet as well as making a few recent bold snap-on acquisitions which have added value so me thinks that any sudden large inflow from such a settlement COULD perhaps signify a chance for investors already owning shares to possibly recieve a HUGE one-time dividend payout!!
This company has done it before in the past; wherein the lump sum payout to investors was given as a dividend (an amount per share) where the dividend payout was close to about 70% of the share price!
For instance, HK:329 is standing right now at about HKD$0.14/share, so about USD$0.018/share and DGTLF is at USD$.02/share. There are now about 2.7B shares which means at the current market price the 'market' is assuming there is a market cap of about USD$48,600,000 for the company; this is obviously wrong as we know that the company has at least a few hundred million in assets (in HKD, so in USD it would be close to double that figure, or about USD$100,000,000). If we assume that all the settlement inflows combined could be roughly half of this value, seems reasonable when considering say $5M to $10M paid by each defendant, then Dragonite could easily wind up with an extra USD$50,000,000 on the balance sheet. This would mean that the stock price would effectively double on just valuation alone, to USD$0.04/share. But if the company decided to use the inflows to grow then either a share buy back or simply keeping the money on the balance sheet would IMO lead to such an increase in the share price. However if the company decided to simply do a one-time dividend payout then DGTLF shareholders could see a roughly USD$0.02/share dividend! Which would practically give all shareholders back their original investment worth from the current market valuation and still be left with their original share allotment! Or if they had HK:329 shares, seeing a HKD$0.14/share dividend would also be basically a 100% div payout from current levels.
At this point, who knows if they will even win the lawsuits but it seems though already the courts are leaning toward a Dragonite victory based on the patents and the default judgements however it is still up in the air. It still is though a potentiality which global investors need to pay attention to because IF news comes down that they won and large inflows will occur and the company will return value to shareholders via a large div payout then the company could just issue the dividend to existing shareholders who had owned X number of shares as of a certain prior record date, (so new investors learning of such patent lawsuit news would NOT be able to get in on the deal in time to receieve the dividend). The company has done such a large one time div payout before and it then happened to be close to 70% of the per share valuation! Of course as a shareholder I would also like to see them use the inflows for growth however I just feel at this point like any share buyback or using the inflows for 'growth' and keeping it on the company balance sheet would just be met by shareholders with even more wholesale selling and the pps would just drop further. I think the inflows would be more effective if used for a one time dividend payout to shareholders so that those who invested at the subscription price of HKD$0.22 could who now see a HKD$0.14 share price could at least get back almost all or all of their original losses.
The company itself would STILL wind up garnering the advantage from winning the patent suit because of the legal ramifications of such a win; namely, the other ecig companies would no longer be able to operate in the market place selling ecigs so Ruyan effectively would have a clear road to take over the market with their products and should IMO lead to huge gains as regards snapping up market share by selling the new line of ecig products.
I think (hopefully) more lucrative days are ahead for Dragonite and its shareholders. The best investor relations move the company could EVER do is to use ALL of the patent suit inflows to provide existing shareholders (as of a certain record date, like NOW/TODAY) with a one-time HUGE dividend payout equally just about what investors have taken as a loss in owning the shares since the beginning of the year. Just my opinions.
It is really tough hanging on to the shares of this company because of all the V8 slaps on the head however I think/hope that before this year is out, investors should either be back to even in this investment OR gaining and in positive territory based on fundamental positive game-changing events/catalysts for this company and the emerging ecig industry.
GLTA!
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