Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Could anyone answer me why LOAM is selling down Nanoco, which is down 50% and retraced to 6-month lows, and not IQE, which is up 100%. I am nothing short of puzzled.
I am starting to prepare myself mentally for Nanoco to be left with less than £50m. What a rug pull...
Exactly why it is laughable for BT to tell investors the company has not provided guidance.
A lot of guidance was provided, directly and indirectly. With $10-20 per TV initially being called the low end of the range by Mike Edelman and the DB analyst being told your model is valid, this makes Brian's email to investors early last week look suspect and further erodes his credibility.
GBT - I don't condone all you have said about BT and general approach (you have gone over the top) but you raise many valid concerns and I understand your anger.
@HenryHistorian - trustworthiness is absolutely on the line and more, in my opinion.
The board would have had known the litigation strategy and at what number they would actually have to consider settling (can't make that up as they go along) so my problem is that if he has been guiding to a multiple of that number all along and then capitulated, meanwhile LOAM gets out before everyone, it smells a little bit. Bear in mind they were his paymaster who voted to approve his higher salary etc (simply because the litigation had progressed) so you start to ask questions over conflicts of interest etc.
Only time will tell...
I just looked at GigaWitt's account and noticed that he conveniently signed up just before Christmas and then goes quite... most of his posts are just defending BT, LOAM, and previous management, Nanoco's advisors etc.
Look through his posts and he seems like nothing other then a mouth piece for the company. Since the settlement news arrived, he has also been trying to talk down expectations. Sounds like a very 'in the know' person who seems to have remembered every word coming out of BT's mouth over the last year. References to QDVision, Nanosys as a next target, etc also very strange... you sure know a lot about the background story.
Adds to how dodgy this whole thing is getting; FCA should take a good look at this. Wouldn't be the first time I have seen it.
https://arstechnica.com/gadgets/2023/01/tcl-backtracks-on-making-its-first-oled-tvs/
https://www.flatpanelshd.com/focus.php?subaction=showfull&id=1672866003
This is very interesting... TCL apparently claimed that they were going to release a QD-OLED at CES on January 4th and just days later on Jan 11th after the Samsung-Nanoco settlement news change their tune?!? Maybe there is hope!
and @Hawi - any notion that I am linked to the account that was set up is ridiculous, simply because I used "..." ?!? There are many people who seem to be upset here, understandably so. I still hope for the best but simply do not like the messaging coming from the company.
Well said by @BeContrarian.
Let me ask you guys something; if we have agreed a lump sum payment which implies a royalty of $2-3 per TV (if you consider global sales, historically and forward looking) what do you think this says for how we price our products going forward. Consider that there are much higher volumes of QDs in TV/display products then there would be in any sensing products. I am not sure of exact amounts but let us say that there may be 20-50x more QDs used if not more. Does that mean that we are then going to license our IP for those products at $0.04 - $0.10 a device or even less? Nanoco is a public company and will have to disclose what they are settling for, so customers will be able to infer how we price products and they may even have MFN clauses in their supply agreements in place with respect to pricing, especially if you are a giant like Apple/STMicroelectronics.
The RNS from Monday is written in the theme of "Hmmm... how do I write this to not appear to hiding a bad result... when I am hiding a bad result".
This should be the line that should forever shatter confidence in Brian Tenner and the board:
The gross settlement value should be expected to be towards the lower end of the range of expectations for a successful jury trial outcome as previously guided by the Company.
Just comical...
The reference to time value of money and a rising interest rate environment is a load of nonsense as well. I am surprised the company didn't throw in a COVID-19 related excuse in the RNS.
I am not sure what relevance the $400m number had... I think BT was implying that because the market cap was close to that at the time we were ramping up production, then this was the source of the $500m number that had been thrown around by the press, namely the Times who our management team seemed to have been speaking to regularly / they were the only dedicated main stream media outlet covering the story.
Again, the only downside / lower end damages figure that Brian's comment re a low end of a jury trial outcome could have actually referenced would be the Dow model ($6 per TV / our lowest damages model). BUT, this figure doesn't address future sales or the rest of the world... so it just doesn't add up.
0/10 for communication from Nanoco. Shameful stuff, really.
Still going through the motions and reviewing what was said by management about guidance etc because it just all doesn't seem right given the bs from the RNS and the email Brian sent to many of us..
Just look at lines like this from Brian's piece with Times in June:
https://www.thetimes.co.uk/article/nanoco-in-line-for-windfall-after-samsung-concedes-in-patent-battle-xrh2k9dm3
The outcome could be transformational for Nanoco. If successful, the company, which is listed in London and valued at just over £100 million, thinks it could be awarded damages worth “multiples of [its] market capitalisation”. That chimes with the thinking of others in the City, who have pegged the case’s potential value at upwards of $500 million.
The share price was 40p at the time... so that doesn't really add up with Brian's comment that he was implying a multiple / transformative value whilst the company was around ca USD$75m. This confirms back peddling to make it seem like what is coming isn't a disappointment. What is scary is that he won't say that it is a multiple of market cap in June when it was ca £120m.
This tells you that we should expect a very bad number.
Now go and read the Turner Pope research from the same time (https://www.turnerpope.com/wp-content/uploads/2022/07/NanocoGroupplc_6_6_2022_FINAL_BG.pdf). They name one of the uses of funds as:
"Strengthen the Group’s balance sheet opposite Samsung during the litigation process to reduce the attractiveness of potential delaying tactics designed to weaken Nanoco"
Delay tactics? We folded like a Chinese suit. The only use of proceeds were to pay the CEOs salary which 2x'd in FY22. Brutal.
@Nanogeddon - that's why he was best off saying nothing/providing a limited / nil amount of disclosure... The company has a clear problem with overpromising and under delivering. It must be in their culture and you only have to look at Edelman and now Brian.
Go back to Michael Edelman's investor talk interview where he was saying that this was looking like a share of billions of dollars to where we have actually ended up... Brian talked up damages in the same way, albeit not as aggressively,
Then, I can point to multiple examples where BT referred to reasonable royalty rates. In one case, he actually pointed to 0.75% to 1.25% royalty on the end value of Samsung (depending on the size of the panel). Why would you ever even open your mouth on something like that if you were going to trade/settle at a small fraction of the amount. To sell false hope to PIs?
Then... to come out and refer to expectations which were never actually given, is just something I have never seen before. It is comical but was his get out clause for a bad deal.
And sorry for being a downer. This has been a tough week to swallow, but I always believe its best to cut through the bull****... we have already been fed enough of that by the company.
I think everyone here needs to brace for $150m GROSS or even slightly less....
To be honest, I think we threw any logic to the wind in calculating a settlement amount... it just became about a big figure and the easy option as opposed to any real framework for valuing use of the IP. Logic would tell you that we would have only agreed $6/tv and no less... but that is assuming everyone is rational and operating with logic, which is wrong to assume (clearly).
No one can answer why Edison is suddenly referring to use of 'lost earnings' versus lost revenue as a basis for damages. Did they just make this up?!? Surely they have been getting their damages numbers from the company. I don't see Edison as a firm which is digging through court filings etc... they certainly aren't paid enough to do that.
You have to also realise that when a settlement offer arrives, everyone's interest diverge; the lawyers (want a settlement quick and to monetise / move on), advisors (same thing), the litigation funder (same thing), LOAM (need liquidity and to get out of a position), PIs (go for it), management (have cash that we never had before regardless of valuation / license framework)... we all have different objectives. I just go back to the idea of expectations.... the majority of investors expectations were for the company to follow through on their talking but they have likely gone for what suited everyone else imo.
At the current valuation, a lot of bad news is in the price... but my point is that if management think they can pat themselves on the back for this outcome i.e. where they have cash but the share price lands at 30-35p, they can bugger off. It really did scare me that BT tried to shift the goal posts on expectations in the 90th minute (or rather in extra time) to create a narrative that they've done OK.
I am personally expecting $150-175m gross settlement value, which would mean $75-90m USD net to Nanoco.
I go back to the point I made the other day about the framing of 'low end of expectations'... well, I am sure management spend time looking at these boards to try and understand what investor expectations and concerns are, and will have completely disregarded the fact that many of us had expected a $250m as a floor and were ready to go to trial to get that amount.
Management may see this as a win at a corporate level but are going to take a huge hit to their credibility with investors. IMO, if and when a disappointing settlement arrives, it will get people asking how real the STM and other organic opportunities are or whether this is just another narrative to pump the stock and give false hope, particularly if the display opportunity is dead in the water because of a ridiculous 'catch all' license.
I am eagerly awaiting more detail on the settlement and after that a plan for the cash we will have. We should stand ready to be further disappointed but also to hold management accountable.
@BeContrarian... $300m not a chance my friend. I hoped the same (had always seen $250m as the low case) but that wouldn't have been the low end given that Edison speak to the company and they walked away from that number.
If we granted a cart blanche IP license for Samsung to sell film to third-party manufacturers for a measly $100m net or less, then management is nothing short of incompetent.
The real problem in my view is the fact that management, who have only ever seen single digit millions in the bank account, didn't have the "bottle" as you say in the UK to risk it for the biscuit. How many shares have they ever actually purchased in the open market in the previous 5 years. A lot of questions to be raised over incentives and alignment of interests with private investors after this fiasco... PIs should feel hard done by.