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We should have a clearer view of how things are likely to go after the PTAB and the Judges Markman hearing report, which should be sometime within the next three weeks. Prior to that I don't really see much to be gained in speculating on outcomes.
"Edison estimates a settlement in the region of $£250m mark"
That's incorrect. This is what they state-
"Although the value of the potential payout has not been disclosed, we calculate that lost revenue in the US attributable to the patent infringement to date could be in the region of US$200–250m or more."
That's lost revenue, damages awarded for wilful infringement can be multiples of that amount, typically three times or more.
Just to play devil's advocate,if nano were to win and an injunction was to be served to Samsung. What is to stop nano telling Samsung that they want the first x number of years worth of licensing fees up front before they would petition for injunction annulment? If Samsung dithered then their current plans for qd screens would be in jeopardy and their competitors would be able to bring potentially superior products to market before them. They've already spent at least $10bn on a processing facility in Texas. At what point would even the mighty Koreans have to admit defeat. The longer they dither the more qd units they sell and the greater the potential damages they may pay. US courts can decide to award global damages bit surely Samsung must realise that if they don't then any unpaid bills will just be moved to licensing charges,if I had all the advantages (think injunction, patents,licenses) that is what I would do. If nano win they have the advantage here. Court awarded global damages or not nano could well make them pay regardless-just over the longer term.
On balance I think we shall see something in the middle ground from damages/award. Maybe a bit more than US alone but a bit less than global.
Edison estimates a settlement in the region of $£250m mark. They will have been guided on that figure, although hopefully at the lower end of the spectrum of damages. Forward licensing is critical and I would expect one to have a global requirement.
I should add that I'm aware that the $1bn figure would only cover lost sales in North America, and that worldwide sales are three times that figure, but the legal action is against North American sales. Any further damages would be negotiated elsewhere.
It would be nice if Samsung offered a worldwide deal, but I wouldn't count on it.
Some big figures being bandied about here, which I think belong in the realms of fantasy.
I would say a settlement of north of $1bn would be very decent , based on loss of earnings times three, plus a bit more for costs incurred, damage to reputation, harm to company prospects etc. Any kind of license would have to be negotiated separately from the legal proceedings, and with Samsung would probably require some further legal action to get Samsung to comply , reference to KAIST who had to go back to court for similar shenanigans.
Sensors could be much more significant for anyone that has kept a close eye on how things are moving exponentially with IoT, AR and machine learning (incorporating automated cars).
My own thoughts are that if Nanoco win this action, it will become a much more attractive prospect for a buyout by a larger corporation. Nanoco have never really been keen on becoming a manufacturing company, they'd rather leave that to someone else, and have only dipped their toe in the water as a consequence of losing sales to the Korean OEM's.
If Nanoco wins, it is very probable that the will see a sustained yearly profit growth of more than 100%. Such and occurrence would result in a PE ratio of high double digits. Imagine further that annual profitability exceeds 1 BP per share. A high double digit share price is not out of range.
Okay I know there are substantial risks here, but the rewards are potential high too. However I think even if things go well for us, investors will have to wait several years to get top dollar for the shares . The appeals will no doubt take years and Nanoco needs time to "develop" the organic business as well- hence my question about 5 years hence. That said if I have understood correctly for every £ 1Billion Nanoco gets in a settlement (we need to remember Nanoco won't get all of any award as we have to compensate our case funder, lawyers etc) the share price value "should" increase by £3. Thus to get lets say a share prcice of £24 we would "only" need a sum of £8 billion from Samsung to actually go to Nanoco. Is that really feasible? I think MC with his talk of 14 million TV's sold would have said yes, but BT seems to have his feet more on the ground. We can only dream. The other possibility of course is that the shares become virtually worthless if the trial goes against us and no new business opportunities ride to our rescue. Has there every been a share with such a large range of outcomes? 8th May today so if BT was accurate we should hear something in the next 23 days aslthough the trial is still months away.!
More funding will need to be raised well within 12 months, unless there is either a successful outcome to the litigation or new cash flow from sensors, display CFQD or something else. LOAM’s increased share supports the view that either a further cash raise is unnecessary, or that if needed, it will cough up again for a larger share of the equity. So there is still considerable uncertainty but I believe, we shall secure income though the STMicro partnership in the next few months and secure our status as a going concern. If we can do that, an SP measured in £ and not p is not unrealistic.
If we ever get to £25 Botbot will be able to finance a modest space exploration programme.
Important to keep feet firmly on the ground I think and to take our signals from Nano’s moves rather than target prices. Upsides could be massive, but current risks are significant too. For us that have been brave enough to back nano at their lowest ebb will stand to gain the most from a post litigation Nano.
There could well be a few who sell if there’s positive news on the legal front. Don’t forget there are a significant number of PIs who have been underwater for a long time and will jump at the chance to get out of a share that has caused such angst. Nonetheless, I expect a big rise and a retrace after the euphoria wears off and some selling kicks in. However, I think selling straight off the back of the legal case would be like cashing out a bet on Usain Bolt before he’s even set in the starting blocks.
It’s certainly worth sticking around to see what a rejuvenated Nano do with their IP and, as others have alluded to, the potentially massive market cap that could follow as a result.
I just wanted to check. At the moment the MC is c.£80m. In my opinion it's at least a 10 bagger from here so £2.70 minimum. Is it possible to hit £25?......let us hope so. I'm not saying no. The tech sector is fickle but once you are in peoples sights it can go quite crazy. 50 x EV is not unheard of. Check Snowflake.
Fingers crossed Brian Tenner is our man then! A court win will give him plenty of resources to hopefully push the company and the need for manufacturers to license from us will give us a revenue stream moving forward to help keep the momentum going. I'm going to have to rethink my post settlement strategy now amerloque
I agree whole heartedly, Frostbar. Lack of funds to benefit from patents have constrained Nanoco from the start. A win would give them tremendous leverage and ample funds to issue a dividend, buy back shares, and expand rapidly into many markets. Companies infringing on their IP will either license the technology or face lawsuits.
With the caveat that technology could always turn the world upside down, Nanoco profits could soar to 100% or more per year for multiple years, causing the share price to exponentiate. Their biggest problem will be managing growth. They need to profit as much as possible from expiring patents, while building a solid foundation for the future. Much as Bezos has done at Amazon, they need to balance a profitability focus with establishing a world class foundation.
Given good management, Nanoco's share price could reach into the high double digits in coming years.