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Universal Display Corp. Message Board

  • aporeh aporeh Jul 29, 2013 10:01 PM Flag


    According to the word on the street Novaled sale to Samsung was the source of the large drop.
    The reasoning was as follows: (1) Samsung paid "only 200mil" for 500 patents (2) Samsung will have enough patents to "drop" UDC when the current contract ends in 2017. (3) LG will be scared by Samsung patent portfolio and will stop producing OLED. OK, so let's examine the real story

    Argument #1 "Only 200mil"
    Novaled tried to IPO the company this year with a target price of "up to" 200mil with Goldman Sachs, Deutsche Bank bring the lead underwriters. Last year Novaled had a revenue of 17.4 million euros and a profit of 3mil. Samsung decided (Wisely) to put up the said amount and Novaled made an exit. I assume that Novaled could not get their company valued at a better price because they actually have little to contribute.

    Argument #2 : Ending the Samsung/LG/ UAO and UDC agreements
    The fact is the UDC holds key patents in the industry, both manufacturing and basic design patents such as flexible screens. UDC portfolio is huge and since it does not manufacture companies cannot "barter"* with it over patents. Therefore, any violation of even a single patent will result in Samsung having to stop selling OLED screens in the US and Europe and pay royalties and penalties. Not an option....

    Argument #3 LG will be scared by Samsung.
    Actually, Samsung is scared by LG's old Kodak patents and wants to have its own portfolio. Novaled was cheap and Samsung decided to buy them.

    Conclusion: Those of us who saw a buying opportunity when the stock dipped to 26.9 (and I did) got the spoils. I am hopeful that tomorrow more analysts will address the fact that paying 200mil for Novaled affirms Samsung commitment to OLED, which IS a positive sign.

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    • Adding to the interesting story (details posted by various analysts):
      (1) "Doosan Corp. (000150), whose conglomerate parent describes itself as South Korea’s oldest company, in May dropped a bid for Novaled"....
      (2) Novaled and UDC have been collaborating since 2006
      (3) Novaled product doesn't compete with UDC


      I am wondering why UDC did not try to purchase Novaled in a stock/cash buyout. That would have given it a complete turn key system. It would be interesting to hear the response of UDC's management. My take s that UDC doesn't need these patents as it has enough patents in its portfolio and really doesn't want to dilute its war chest in case it has to go into a protracted IP war.

      P.S. This is all like a big chess game.... this is really fun and interesting.

    • And, of course, Novaled and Universal Display do not compete. They deal with different parts of the stack so their technology is considered complimentary. For a very fullsome discussion on this, look on the OLED-INFO site

    • Excellent analysis -- very impressive.

    • Nice post.

      I would have followed you today, except that I added not too long ago on the last leg down, and I own far more OLED than is rational. Good job.

      This is all good news, and makes on wonder whether Samsung would like to own OLED, as well.

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