"Where did the $5.50 come from, and the name of Pandora from your perspective if you don't mind be asking? Without some verification and substantiation of the information, it is just that... a rumor, even if started as a WAG."
I'll start by saying I have the same info as everyone else here does. I haven't heard any "whispers" or anything else. If people took what I clearly stated was a guess and turned it into a rumor, there's really nothing I can do about it. Again, it's purely a guess on my part based on tidbits I've picked up that have been posted here and observations I have made. The reason I was so specific is because if they are bought out, I want to see how close I am in terms of which company buys them, at what price and when.
In regard to where I came up with $5.50/share, at the time I made the original post, Pandora was trading closer to $11 than it was to $10, and $5.50 would represent roughly 1/2 share of Pandora for every share of Augme. It is also a number where everyone who bought the stock in the past two years would be made whole, and even if they bought at the highs, would still make a decent profit though obviously not as much as they would've liked or expected to. If they were to be bought out, it's just a price that makes the most sense to me.
As to how I came up with Pandora, they just seem to be the best fit. Further, someone I believe is pretty knowledgeable about the company and the stock posed the question "who wants to own Pandora stock" over here the other day which further supported my opinion.
In regard to the time frame, it has been implied that something big could happen as early as January (I believe by Arn, but if not, by someone else I believe is pretty knowledgeable), that Paul Arena may have taken on the IR role, the fact that the investor presentation has been removed from their website etc makes me think that something is going on and is fairly imminent.
I apologize if you weren't talking about me when you said someone who bashed the company/stock, then bought back in and started a rumor to try to make a quick buck. It seemed like you were talking directly about me since a) I'm the one who made the guess on the buyout b) I've definitely been critical of the company and I believe that criticism was well-deserved and c) made no secret that I've been buying the stock since it's dropped to levels where I think the risk reward is favorable. I don't think message boards have any major impact on the share price of a company and though like everyone else, I'm here to make money, I can honestly say that I've never started a rumor or made intentional misstatements about a company to try to move the share price in either direction, so hopefully that clears it up.
Maybe people simply like to speculate on the future of the company, as most here do all day every day. I'm pretty sure I qualified my prediction with "this is just my WAG". I wouldn't call that trying to start a rumor. Not sure why you would criticize someone speculating on a buyout for $5.50 but not criticize those who say the stock is going to $15, $30 or even triple digits. Seems a little hypocritical to me.
If it was an all-stock deal like I think it will be they can definitely afford it. If they lose the lawsuit against against Augme, how much will that cost them? A couple hundred million plus future licensing fees? They could eliminate that risk plus own the technology and the lawsuits against all the other infringers could easily would easily make up the cost of the dilution of buying them.
There are many and they don't necessarily need to spend the cash. Just to use google an EXAMPLE, what would it cost them? 1 million shares?
There's Oracle, Intuit, and a host of many if there is perceived value.
I've been thinking about buyout scenarios as well. It would seem to make sense that buying-out Augme could make sense for an infringer if their business models could dove-tail somewhat. They'd avoid the potential damages from trial, costly legal fees, attain some (in our opinion) critical IP, and pick-up a advertising/marketing team gaining a lot of steam. BUT, who could really afford that out of the (potential) infringers.
I thing Spetty referenced (casually, maybe jokingly, maybe seeriously?) Pandora at $5.50. While that sounds great (not as great as double digits organically, but better than my $2.70 average) - wouldn't that equate to roughly a third of Pandora's overall market cap?
I'd also like to think non-infringers (Oracle, other big tech/ad firms) would be interested - but there's also a lot of other properties out there competing for their cash hoards.
Ski, I certainly understand your reasoning. But financing in similar situations has been and can be arranged. The main motivation in this case for Pandora is their awareness that they are infringing and their business model depends on it. This is not a minor part of their revenue. It could even be said that without the technology they do not have a business.
I have not heard anything, but remain hopeful Judge Spero set a definitive trial date. I would just receiving the trial date itself and having it placed on the courts calendar as a long awaited positive step.
Considering we asked for September 2012 and I believe Yahoo asked for March 2013, it would appear that if Judge Spero simply split the difference, we may be looking at a December 2012 or January 2013 Yahoo trial date. I'd be happy with either continuing to believe Yahoo will never allow it to actually proceed to such point. Finally having that hard trial date will once and for all establish a deadline for the parties to attempt further settlement negotiations or proceed to jury trial.
While I discussed yesterday that the majority of these cases settle prior to trial, roughly 90% and how they generally settle for between 13-25% of total estimated damages, it's important to note that once the trial date is established, the percentage begins rising to the disadvantage of the defendant. The longer the defendant forces the plaintiff to proceed towards trial, expending additional resources, the less apt the plaintiff is to accept a smaller percentage of actual damages.
The most cost effective means for Yahoo to settle post trial date being issued, would be to do it sooner rather than later. Should they cause Augme to expend more resources during discovery etc., they will likely only strengthen Augme's demand for a higher ultimate settlement. When one considers that the Markman ruling and it's outcome plays a highly material role typically in the outcome of the case, Yahoo must know they are fighting a potential losing battle that would be extremely difficult to overcome, likely impossible.
Frankly, while I'm sure Augme and Goodwin Proctor would be open to an equitable settlement, with a trial date being established, it's they who find themselves in what could be considered a somewhat win win situation. They can settle or they will go for the "Full Monty", treble damages and all at trial. GP surely knows that this type of issue typically plays well to a jury generally not appreciative of the big corporate giant taking advantage of the little guy.
Ask yourself this one question. If your Yahoo and their attorney Richard Hung, would you risk a potential billion dollar damage award and possible injunction knowing the former founder of Blue Lithium Gurbaksh Chahal will likely not only be Augme's first deposition and person to provide testimony at trial, but he is also a somewhat controversial individual who has repeatedly talked on the public record about how he didn't invent anything with Blue Lithium, he just took what was out there and used it to score a $300 million sale of his company to Yahoo. I don't know of an attorney on the planet is going to want their entire case resting on his testimony and shoulders. This liability alone would cause a prudent defendant to consider settlement while they still have some semblance of ability to affect the outcome, it's about simple risk versus reward. Just remember, a lawyers job is not always to win for their client, but more often than not mitigate their ultimate exposure.
I dare say that based on what I've read having transpired thus far in both the Markman and the discovery hearing, there would appear to be a high probability that when GP is done with him, Chahal and Yahoo will have folded like a cheap suit. In addition, rest assured Scott Thompson, their new CEO, does not want to see his legacy marked by a potential billion dollar patent suit award knowing the loss itself and admission of liability could be highly damaging to the company's future online and mobile initiatives.
Let's hope we got our trial date.
Boston, when you think about what Pandora does, and how it is darn obvious they are infringing, and how their whole business model is dependent upon that infringement, it would make perfect sense for them to make a run at us. I would not be surprised in the least if they have not already made exploratory steps in that direction.