Member Info for ceejay101

Nice to see people modelling once the known knowns are known.

I can't read the article but perhaps the headline triggered the fall 'polymetal to shift listing from London to kaz'

https://www.ft.com/content/98686967-d0a9-4a42-b2a7-2ea13d734f9d

when it comes to the settlement amount, i actually think you are all right and also all wrong.

I've posted on here previously about high/low settlement. The concept will allow N to breakdown the claim into multiple parts. Let's say
a. past US sales
b. past EU sales
c past ROW sale
d. future Whole world

I'm sure there are plenty of breakdowns for different line item. Each line item will have had a high and low value. Let's take US historic sales. A low value might be attributed to it based on earnings rather than revenue. The high value might incorporate a wilfuness element and be based on revenue or otherwise.

The settlement agreed would have resulted in Samsung putting the low value into a pot (which is guaranteed) and then a second sum determined through arbitration.

Why do i think you are all right and all wrong. Well, the low amount is what has been agreed so far. The outstanding bit is what will go through arbitration and will result in the settlement getting increased.

Revenues can be used although most likely in instances where the patentee is manufacturing. This makes sense to me as there would then be an associated economic loss of production.

Non producers would most likely on earnings.

https://www.investormeetcompany.com/investor/meeting/interim-results-for-the-period-ended-31-january-2022

I guess interim results next week then. Lots of Q&A then

I posted earlier today about high/low settlements.

https://www.stout.com/en/insights/article/getting-yes-high-low-patent-license-and-settlement-agreements

Having re-read it and the 2 main rns's I am of the view that the low value settlement was agreed..the remaining key points which have values attached will contribute to a higher settlement and are subject to further negotiations and agreement.

In the context of that the 2nd RNs makes more sense to me.

This is an interesting article.
https://www.stout.com/en/insights/article/getting-yes-high-low-patent-license-and-settlement-agreements

It suggests that parties agree on a low settlement. Key points are identified and a value is attributed to each one which then results in higher settlements through arbitration.

I wonder if this is being applied with nanoco.

The market (which we assume is right most of the time) would never attribute full market value to an assumed settlement before it is known. The view that we are priced at the settlement amount is way out.

the market will assume a discount until cash is in the bank. On that basis we know a settlement is above where we are. Even when cash is in the bank there will probably be trade at a small discount to cash.

The one off payment is interesting. Lots of patent infringement cases are brought about by patent trolls that don't produce anything. They are not interested in royalties but the next patent case. There are instances of royalties being awarded from cases involving apple and Samsung where the patentee is actually producing something rather than sitting on IP.

@gigawitt - what is to say that the 2nd rns elaborated the process of what the settlement rather than in response to internet chatter. We only have the word of edison to judge on that point. If i had a £1 everytime edison got things wrong.....

I was trying not to be contentious and not really focus on the amount of the award. I'm optimistic it is north of $400m . To be honest, the value I attribute is irrelevant. I'm more interested in the SP.

The point I'm making is that we most likely won't know how much it is other than whether it is for us only or global. This is itself will likely dictate the markets implied view of the settlement value which will impact the SP.

Each investor will have their own view as to what the settlement might be. For example I have hypothesised 100% probability of an award > £50m. I won't bore you with my other figures.

The biggest issue I then foresee is that Samsung will compel nanoco to not disclose the full settlement value. This will leave nanoco in a precarious position where a special dividend is announced or some other means or implying the benefit to shareholders.

By the time the settlement is signed we might still be none the wiser and the SP will be stuck and potentially based on the general consensus of what is the implied 100% settlement value.

Put aside the Edison note for a moment as that may or may not be conjecture. Is there a possibility that certain guidelines for the settlement approach were discussed and agreed either on the Friday or over the weekend which then warranted a subsequent RNS. In particular there may have been expectations that a deal would be concluded within a week. The second RNS clarified timings were not within the gift of either party. It is a convenient truth that there would be speculation over the value of the settlement.

To me an obvious thing to call out is that you would expect a pre-trial settlement to be lower than an award. Edison were just covering there a-holes and waiting for the award to be settled first before any possible upgrade.

Most companies and their broker would not be in continuous contact, especially if BT is busy with a settlement.

That theory seems like complete tosh on the FCA requiring clarification following a false market. First a 30-40% rise is hardly uncharteristic. If it was required then NAn would have been compelled to issue a statement intraday on the Friday. Unless the FCA have a WFH policy on Fridays?

As for judging a false market, how the can the FCA be party to what may or may not be the result of any settlement. If it were then that in itself would probably breach guidelines.

I really don't know the reason why BT provided the second update.

just throwing it out there. if an NDA is signed then we might not immediately find out the value of the settlement. It might be hard to establish the award size and hence the price.

I've just looked up other settlements between Samsung and other parties. A lot of the settlements are not disclosed.

It will be interesting to see how this is put into an RNs and whether a special dividend will be disclosed at the same time

Let me start with the items that are true.

1. The RNS yesterday raised lots of questions
2. The market is always right, well most of the time
3. Prior to cash in the bank the share trades at a discount to the settlement value.

I will focus on 2&3. Prior to Fridays RNs the mcap is about where it is now. The result of the case was binomial. Either we win or lose. The price of the share had risen on the expectation of a win and would have dropped if we lost.

The share price rose on Friday with the settlement RNS. The probability of a loss had diminished and the price readjusted to reflect that. since then the price has fallen back to where it was. This raises the question to me of how much discount the market is pricing now that there is more certainty to the settlement. If the market is correct then it is only attributing between 2-3 times the current market cap for the award.

You might ask why 2-3 times, if it were more than that then the market would adjust the price, unless there is inaccurate information available to the market. This goes back to my earlier points of a discount and the market being right. The risk element of losing the case has now been replaced the ambiguous statement and possible lower end guidance.

to avoid the question coming up about ongoing payments , please read through page 22 of the following article.

https://scholarlycommons.law.wlu.edu/cgi/viewcontent.cgi?article=1542&context=wlufac

I've cut and pasted part below

One advantage of a lump sum license is that it avoids the difficulties associated
with determining and making regular royalty payments for future sales of the infringing product. Although a lump sum requires the parties to make some estimate
regarding the level of future infringement, 14 4 once a flat rate is agreed upon, a single
dollar figure resolves all claims between the parties. As a result, "lump sum payments can be quickly and easily administered" without creating "an ongoing contractual relationship between the parties."1 45 It also gives both sides certainty regarding the total amount of compensation 4 6 and avoids potential disputes over
accounting for royalty payments.1 47 Finally, a lump sum license can be an effective
way for a patent holder "to raise a substantial amount of cash quickly,"1 4 8 which can
then be invested into new research or used to finance other business activities.

I've just read an interesting analysis of legal settlements for IP infringement post an eBay case.

The full settlement for past and present doesn't mean Samsung will own the patent. The historic amount can also be calculated differently to the future based on the past being an infringement. It avoids the concept of a royalty being negotiated or clarified for what is a proven and successfully selling technology. Potentially we will then get wind of the full settlement without knowing the breakdown.

Based on historic, global sales and future application for lifetime of the patent I can still see the full settlement value still coming in at a significant figure.

I read this as future royalties are not part of the settlement. It doesn't make sense to me though how future litigation and patent peace can be applied unless royalties are also agreed. Maybe not in the settlement but corollary to it.