Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
For anyone new to this board, speaking as a lawyer (qualifed and practicing solicitor), Gigawitt consistently gets the most basic of legal principles wrong, so much so that I seriously doubt he has ever stepped foot in a court room.
In short, pay no attention to him.
Peregrine, there is some truth in that. Take the issue of no future royalties. Nanoco couldn't have said in the RNS that future royalties would be incorporated into the one-off payment because, being a "no fault" settlement, there wouldn't be any public admission by Samsung to infringement and therefore a need to pay royalties. It therefore created this pretence whereby Samsung superficially will pay for litigation peace but in reality everyone knows they're paying the equivalent of royalties.
In that respect I do have sympathy for the lawyers who drafted the second RNS as it was a very difficult task. They couldn't use words like "transformative" because the accepted offer hadn't turned into a binding agreement, and also because that would have risked antagonising Samsung before crucial negotiations. Unfortunately the cautious tone in the RNS was wrongly interpreted as a capitulation, including by me at first.
Screenlearner, my belief is that the second RNS on 9 Jan wasn't about calming the market or adjusting expectations, but because Nanoco were legally obliged to give the market a steer on what the settlement looked like. Otherwise there would have been inside information for anyone knowing if the settlement was high or low.
This raises the question why the second RNS didn't accompany the first. The strong likelihood is that there wasn't enough time from the judge's grant of the stay at midnight and the market opening at 7 to draft the second RNS. It would have needed lawyers spending a lot of time on, and there simply wasn't that time or lawyers available at that time of night. Much better to release a very simple RNS followed by the longer Monday one.
Unfortunately this has confused various simpletons like GIgawitt and FH who don't have the background legal knowledge or experience to understand how these things work.
I'm almost amused at this point about how GW and FH have hijacked every conversation on here to make it about them.
I'm also grateful in a way for their vacuous posts because it really does show their positions are based on nothing meaningful. You'd hope that once the final agreement is revealed and they have been proved completely wrong they might exit left, but somehow I doubt it.
To make my point clearer, "future prospects" are not just the organic business but getting damages and ongoing royalties from other QD users. If BT is "more confident than ever" then it suggests the amounts Nanoco can obtain, by reference to the Samsung agreement, will be sizeable.
The "I'm more confident than ever" phrase has been widely ignored.
Let's remember than Nanoco's strategy was always to finalise the Samsung litigation and then go after the other players for damages and royalties. Nanoco would have wanted those other players to pay fair value for all historic/future/global sales. If Samsung get away with low-ball amounts, however, (which will be pretty easy to work out from the final agreemenr) then by the same token the other players could point to that and drive a hard bargain. But if Samsung do end up paying fair value then so will they.
Some of the things you say are comically stupid.
Make myself a hostage to fortune? This is an anonymous site. Also, isn't that what you did when you couldn't stop saying a settlement would never happen.
As for thinking the market has reached the wrong conclusion, of course I think that. And isn't that basically the point of investing in individual stocks? Dearie me.
Look back at my posts from 13 Jan. I predicted Nanoco would receive £550m-1.15b net of fees and GBP conversion. Nothing since then, particularly nothing posted on this board, has caused me to reconsider that prediction.
What doesn't make sense for all those claiming that the accepted settlement offer included global and future sales is why we haven't got a final agreement yet, not to mention the fact the RNS very clearly stated further negotiations were necessary.
Evidently some serious negotiations have taken place, most likely imo about how much Samsung should pay for future use based on their likely usage of the patents.
To anyone new who doesn't know NGR, he predicted there would be no settlement under any circumstances, which he got completely wrong, and otherwise shows a lack of legal knowledge in his postings. Not someone to pay attention to.
@Kind, I agree. I feel like the majority of this board is living in some sort of alternate universe. When the final agreement is revealed there is likely to be a lot of regret from people who didn't invest / sold / didn't buy more.
I should have clarified on the example, that Party A pulls out of the contract before Party B starts making the widgets. Then the damages would be $50k. If Party B has made the widgets and cannot mitigate the loss by finding another buyer then the damages would be $1m.
I promised not to post again but I want to say something about this revenue/earnings point.
I believe Edison mentioned it because they realised their original estimations were arrived at on the wrong basis and want to save face.
Damages in law are, in the absence of contractual provisions, *never* based on revenue, but on earnings. Edison's analysis shows they didn't understand this initially, but on reading Ray Weinstein's witness evidence they realised "oops we've been doing this wrong".
To illustrate this point, imagine Party A enters into a contract with Party B for Party B to manufacture widgets for $1m. If the margin on those widgets is tiny, so Party B ends up with $50k profit, it cannot claim $1m in damages.
In this case the difference between revenue and earnings is fairly moot, because you're talking about collecting royalties which have zero/minimal overheads.
Edison's top end of $250m was, I believe, a bit high for "low end range" and was getting towards the middle. So I believe them saying you've got to look at earnings rather than income is a way of saying you've got to dial down the $200-250m range slightly because we went a bit high.
In short, this is not a major point.
The funder has only been funding the US litigation (and maybe a small amount of Germany/China legal fees) - if it had been funding litigation all over the globe then fair enough. So I think the rate of the cut to the global settlement will be 5-10%.
This would leave us between £550m - £1.15b after GBP conversion and funder fees and then we pay 10% patent box regime tax.
For this analysis to be correct, it begs the question of why the share price is so low. One of my favourite sayings if "if something is too good to be true, it normally is". And it's here where my biggest doubt lies. But here are some possible reasons:
1. The whole case has gone under the radar. There has been some brief articles, but I haven't seen a single piece of decent analysis that considers the settlement value. Not even Edison did this, and their damages analysis is a bit amateurish.
2. BT has given no "guidance" on a settlement value, other than to say it would be for "fair value" i.e. global and for the life of the patents. I think the reason for this is that it would be inappropriate to say that a settlement could be large, when a settlement could be anything. Unlike the trial where actual figures were publicly available.
3. The dip from last Friday's high can be explained by LOAM de-risking massively and Monday's ambiguous RNS spooking everyone and producing bad headlines.
4. A settlement is by no means guaranteed. We could go to trial and lose. You cannot assume any money until we have it.
So there, my final word is that I think we will get between £550m - £1.15b and as I said I may well be wrong, but I am being sincere. Good luck all and see you on the other side.