Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Amerloque, thanks for an interesting post but I'm not sure what you base 3. upon. Whatever the result Samsung will continue to use QDs, they have too much invested not to. Whatever the result they will continue to produce QDs in house (I count Hansol as in house to Samsung). They're not going to be buying material from Nanoco. They will either be producing them licence free if they win or as we hope and expect under licence from Nanoco, the fee paid either as a global figure now on estimated future sales/production or annually upon an agreed figure for sales/production from an agreed independent outside source. Either way it should not affect Nanoco's own production facility.
It follows 5. is also not entirely correct imo, though that nobody will trust Samsung is undoubtedly correct.
I do agree completely that STM will produce their own QDs, or have them produced to order, hopefully under licence using Nanoco's IP. Nanoco may well have a consultancy role during the set up of production
If N were to lose against S, STM might examine whether they actually needed to licence the IP, but I cannot see STM or Samsung, or most other significant future customers actually buying much material from the Runcorn plant. Most CFQDs will be made under licence, if not straight away certainly after the use of the material has become established.
I may be wrong about where IR CFQDs would be produced, I hope so, I'd very much like to see large scale production for major world players happening in Runcorn, but I suspect it won't.
Hence STM will need a production engineer as advertised.
I had been working on the basis that should we lose in the current US case the value of Nanoco would be a few pence. I know that ignores the organic business but I've had jam tomorrow from this company too often to place any value on it until I'm spreading it on my bread. But thinking about it, a decision against N by the jury in a US trial (unlikely but possible) would not be binding upon a court in Germany, China, the UK, or anywhere else. Neither would a favourable decision either of course. But a non US court comprised of professional and experienced judges specialising in the field and in their own legal system, would be unlikely to even be influenced by a lay jury's decision in another jurisdiction. On this basis though crucially important the Texas decision and its appeals result either way will not be the final round in this litigation unless the funders pull the plug.
Samsung will not want to sell CFQD TVs only in the US. They need permission to sell in the RoW just as much.
What value do others here place on the European and RoW litigation should the US case fail?
Re Delay. Anyone who is involved in or has experienced court listing knows that you cannot read anything about the strength of a case or the prospects of settlement from a decision to remove a case from the trial list and refix on a later date. On any given date courts will list for trial in advance three or four times more cases than they can deal with in a given listing period, on the basis that a proportion will settle. Sometimes this works out, three cases settle, one fights a trial, everything happens according to schedule. Sometimes everything settles and the judge has a reading week or they rush something into the list at short notice. Often too few settle and some have to be put off to a later date. The decision which to adjourn can be based on "this isn't going to settle therefore it has to go off", or it can be "this could settle therefore give it more time and we won't necessarily have to rejig our October list to try it". Court listing is generally done by an official, judges can have a say but usually don't have much hand in it. The court's priorities when deciding which case to take out and which to leave in are "what makes running the court easiest" rather than anything to do with the cases themselves! That's here in the UK, likely to be the same in a busy well run US court too.
Which the reason for the delay to N v S here is anybodies' guess, a little like trying to conclude something from the pattern the tea leaves form at the bottom of the cup.
I find the rise this morning surprising, like many I'd been expecting a fall back to 40p until the last week of this month. Hope it is a sign the wider market has noticed and thinks N's prospects are good.
I've been waiting 10 years for it to germinate. If it doesn't do so now it's going on the compost heap. (Mind you there won't be much point in selling so might as well just forget about it). Life will seem boring without Nanoco v Samsung.
Rumour, maybe not the right word, but sticking with it, the rumour is what has spread more widely in the market this week that price wise there could be a sleeper about to awake in Nanoco.
Win/lose is binary, but win $200 million or win $3500 million is not. I don't think the market values N at 50p on the basis of a binary situation, or that a win would mean £1. Imo Nanoco at the moment is a bet rather than an investment. Lose the case we lose our stake. Win the case and most think it should pay out far more than evens at current levels. I keep reminding myself that a valuation of £2 a share (on the case alone) means £700 million cash after deductions inc tax in N's bank. That means at least a $1,400 million award in the US. £2 a share would be very tempting.
The question is then, is the investment case afterwards strong enough to justify remaining invested and if so at what level.
When to sell?
Buy on the rumour, sell on the news, at the moment we're seeing the first half, the rumour has spread a little wider and buying started in earnest. The judgement will be the news. If it goes badly you'd have to be very quick to salvage much. If it goes well, as i believe it will, what to do then?
What are views here? Some say Nanoco will be a viable and potentially big player in the growing CFQD field in future years. Maybe, but that doesn't mean not selling. Would selling on a price spike on or closely after the news of a win be best, or holding medium to long term? Might awaiting Judge Gilstrap's decision on wilfulness uplift (if decided it was wilful) the best strategy. After having held for so long there is a danger of an emotional attachment to the company, and also the desire to squeeze just a few more pennies out of my largest investment in the portfolio, holding back the decision to sell at the right time.
For me I do not think the viability of Nanoco into the future will have much effect on the price following a court win. The prospect of an increase due to the wilfulness uplift might, the prospect of spectacular surplus cash in the bank and a special dividend resulting will be the price driver.
Thoughts?
Same reason I invested back in 2012, still seems a great idea and one where Nanoco were/are streets ahead in technology, well protected with a battery of patents. It is really just that protection, which I always assumed was solid, that is being tested now, the original ideas we invested in have been shown to be good and can only grow in importance and value. I never thought a company such as Samsung would behave in the fashion it has.
If the patents were to prove tissue paper armour then I agree, the company has had it. We lose. If they hold up, as they have so far, then we our faith in Nanoco's science and its commercial viability is vindicated, hopefully in spades.
Baznik, in exactly the same position (except I've never managed to bring myself to sell), a tense time. All the signs are good, but in court, with a jury, anything can happen.
Some people on here seem to expect the court to set out to do justice. Sadly their role is more limited, it is to apply the law, hopefully seeking to do so in a just way. But to expect a result which properly compensates Nanoco for the profit Samsung have made from using their tech, and for the loss of time, funds, and credibility over these past few years which has damaged Nanoco probably permanently is to ask for disappointment. Best we can do is what the law will allow, not what justice demands. Sometimes they don't even do that.
The reductions include not only the funders' fees but also the reduction of the number by converting to Sterling, and the tax take from HMG. To estimate the final value in Sterling of an award made in dollars to a UK company like Nanoco these must also be factored in, as I had hoped I'd indicated in the first of my two posts below.
Obviously for a smaller award with the funders taking 50% at the outset the value to Nanoco in Sterling will be significantly less than 50% of the dollar number.
Sorry if I was not clear enough to avoid misunderstanding.
That's what I said, for a large award after deductions Nanoco would see a sterling figure of around 50% of the dollar number, for a smaller award they would see a smaller percentage because the funders would take a larger share.
BoracicLint, yes, post judgement settlement is a distinct possibility. The court at first instance makes an award, the loser, or the winner if they feel it was not enough, appeals that award. The proceedings are still ongoing. The parties can settle the matter by settling the appeal, or even agreeing not to enforce the judgement and not to appeal in exchange for an agreed figure. The first instance award simply sets a marker down which generally sets the ballpark, but until the time for appeal has expired or appeal has been rejected it is not final, it can be amended, by the parties by mutual consent, or by the appellate court.
The higher the award the more likely an appeal. Personally I treat opinions of awards over a billion dollars as extreme wishful thinking. Could happen but thinking it will will likely lead to disappointment. (Hope I'm wrong and we see a ten figure award). Take off the funders' and the lawyers' shares, convert to £ sterling, give HMG their share and it will come out around roughly 50% of the dollar number.
At the risk of counting chickens while still in the egg, can anyone definitively say whether UK corporation tax is payable on a US damages award?
Had the money been earned in ordinary business without the need to sue the profit would be taxable. But awarded as damages? And if damages for past wrongs are not how would any figure awarded by the court to cover future licence payments be treated, or any sum recovered in a pretrial settlement?
Given that IF successful any sums awarded to Nanoco would be almost pure profit after deduction of funders' and lawyers' costs this could be an important issue in determining what it is worth to the company, and hence shareholders.
Settlement could happen even during trial, if some piece of evidence or legal turn knocks away a party's hope of winning it could bring them to make or accept an offer they'd refused to accept earlier. But it gets harder to settle, what creates despair on one team builds hope and expectation in the other. And by the way they've behaved there's more to this than money for Samsung, it sometimes seems as if face (I nearly said honour, but that word would be out of place) determines their course.
Unloading by major holders is understandable and no indication of pessimism. If I had 3m bought at sub 20p I'd sell at least a half to a third now to hold the rest risk free. Why not bank an acceptable profit while leaving sufficient in the game to win big if it turns out well rather than risk all the gains up to now on the result?
NGR1616, don't be amazed, the display sector supplied by Samsung is supplied with complete panels. Even Sony buys panels from Samsung. To approach Nanoco, then develop their own panels, then build a plant to manufacture them and the software to implement them, offending their regular (and the only current) supplier Samsung in the process. It is never going to happen. Just as LG are the makers of Oled panels for the majority of the industry, Samsung will remain the sole or primary producers of panels with QDs, unless and until the material becomes unbiquitous. Samsung would still even then have a vast lead in their use and implementation.
One thing perhaps we all agree upon, the Nanoco's management (and their legal team) appear to be playing this extremely well, the commencement of proceedings in Germany at this precise time looks like a very good move to focus minds, maintain or even increase momentum, and keep the initiative firmly with them.