SynQor ruling means P1 will pay $45M in cash to SynQor in Q1. P1 will lose $.10/share in Q1 which is $12M loss. They will also have a $0.05 charge for legal fees due to SynQor appeal. Thus P1 will lose $63M in cash in Q1 taking their cash position to $200M. Due to the SynQor judgement, P1's power electronics BU is totally worthless. P1 will have to pay more to SynQor in patent royalties than they profit on the BU so they will never see positive EPS from the power BU again. Also due to the SynQor judgement, there will be zero interest from other companies to acquire P1's power BU so the power BU is now a big problem for P1. It is too expensive to shut down, too costly to operate, and to damaged from the SynQor suit to sell. The power BU will start to eat up P1's cash reserves at absolutely the wrong time.
With all of this coming out in the Q1 earnings report, P1's stock price will plunge to $3.45 and continue to sink lower from their in lock step with the decline in its cash reserves.
Yet another mistake by Thompson. How much does he wish he had taken that $15 offer for the company back in 2010?
First quarter ends next week, how do you figure that between now and then they are going to shell out 43 million? From what I understand there were 11 companies involved in the suit... i doubt very much PWER is paying the lions share. Seems like SynQor exists solely upon money made out of lawsuits... they best watch their backs, especially in going after CISCO and some of the bigger dogs.
Correct if I am wrong, I think I saw where they have already reported and but the money aside for the judgement. I have no idea about offer, $15 looks nice hindsight. Your insight into Power BU is spot on from what I can ascertain.
Looks like you are insider who lost the job at P1. Looking back taking a $15 share offer (if there was one that was only known to insiders) would have been nice. However, with more than 1 million invertors installed, P1 would be much more valuable just on the service potential itself.