In less than two weeks Hussey will give us an update on how they plan to monetize the IP going forward: NPE, Sale, Licensing, and/or Litigation. I wonder how locking up the value of our IP with a NPE would affect valuation of the Co. by a potential acquirer...at least it would remove it as a liability...I think this will be a positive catalyst for the stock when announced because clearly Hussey is focused on extracting value in the near term.
Wake, All the scenarios that you have listed are an option indeed. But, IMO, the most powerful scenario is keeping the combination and try to increase our sales as fast as possible to support our IP momentum. If we just win or settle one of these cases the rest will fall like dominos and that will results in Augme becoming the most powerful mobile ad platform in the market. This will create not only multiple revenue stream for us but raise the barrier to entry to others and make us more competitive then the competition.
Sentiment: Strong Buy
That is why I posed the retaining blanket licensing status of Augme/HC no matter what happens. It gives the power of the patents and some competitive edge to the core side even if separated, but at the expense of them not being able to be exclusive.
I agree that ultimately the combination of the 2 is the most powerful, and more likely to produce the largest return long term, but the IP has proven to be very volatile, thus alot of the PPS gyrations, so the idea of disconnecting the performance of the one, from the other is also very appealing, along with giving some of the longer term shareholders some reward for their long-suffering. If I had a relatively high level of assurance that there was going to be a validation of IP in the short term, then I would not feel that way now, but I dont know that, and the road so far has told me that it may take longer than anyone realizes. That is my thought.
Although I agree that TWIGTTSOTP (the whole is greater...), I dont see HC value only connected to a validation of IP. It can apparently stand on its own in terms of value (although admittedly not as great), regardless of the status regarding IP, so i have a little different opinion on that.
You guys still think they can generate revenue from their IP. Stop it. The courts have already told you that their patents are indefensible. No one has to pay AUGT for it. Sure, they still have some cases pending, but the YHOO/AOL cases were the oldest and clearly the most winnable. If they got away with it, why shouldn't everybody.
They can't collateralize any borrowing with the IP. They had to dilute again at .85. The IP, sadly, is worthless. The best they can hope for is cross licensing.....but that won't generate any money unless AUGT actually sells services to someone. No 3rd party is ever going to pay a royalty or commission or whatever to AUGT for IP.
Sentiment: Strong Sell
HF, had to reply to you this way. As Imiami pointed out correctly BH is an interim CEO and as such he wouldn't have authority to make any of such decision fully by himself. Even the position of the CEO can not have the power to make such a decision. Its the BOD that must vote on such decisions. As part of the BOD we have GP who main interest is the monitization of the IP. With our HC revenue the deal they have in place will fall apart and their enforcement of the IP becomes difficult as a non practicing entity. They stake in the game is great so far as they spend over a year on these lawsuits and I don't thing they want to screw that up. So based on that I willing to wager that IP being sold out is not an option. Now letting a NPE take over is an option if GP is still part of the deal.
Sentiment: Strong Buy
Siri, I noted in my original post that Hussey is interim, and we outsiders really do not know for sure exactly how much leverage he has with the Board should there be differing opinions on how to proceed with anything of significance. We also don't know the exact terms of our deal with GP, and how it would be handled if we took a different direction in monetizing the IP, after GP has invested time and some of their capital in these cases. (We have invested our capital as well.) There are several possible scenarios for dealing with that issue, and I have often wondered how that would be worked out. We are not in disagreement on anything major here. My only point is that it is a very interesting situation with a lot of complexity, and implications for future outcomes.
Putzah, IMO, this is the most complex decision Hussey will have to make while he is interim CEO. I am somewhat apprehensive about this yet to be decided strategy, simply because I don't see how anyone can absolutely know at this point what would be the best path to pursue. I am sure he is going to get differing opinions from the various "consultants" he will be talking with, some of whom will have their own agenda (GP for example). And his decision will definitely affect the long term stock price one way or the other. My guess is they are going to attempt to move forward with an NPE, so that management can then focus on the core business and also reduce cash burn. Hopefully such a deal would bring in some revenue sooner than continuing to pursue the litigation path. There is little doubt in my mind that Augme is going to be acquired, especially if MM soon falls to Microsoft or someone else. I wonder how that likely scenario plays into Hussey's thinking when negotiating a potential deal with an NPE, because it is certainly possible that an acquirer would want the IP along with the HC business. If one really thinks through all the possible scenarios it becomes somewhat mind boggling. I do not envy Hussey having to make this decision, but...that is what he signed on for.
HFB, Why would anyone would want to separate the HC and the IP. This is exactly why we bought HC in first place to combine the best of technology with that of sales channel. It is exactly the combination of two that makes us a leader in the space. Separating IP would make HC yet another Velti or MM without the head start and protection. The best path is what BH has done...slow down the IP front until the revenue catches up with burn rate and BE. Meanwhile continue with what we have on legal front and hope that GP can deliver. I have no doubt that eventually this will happen based solely on the fact that the IP is very strong. Remember also that there at 80 more IPs that have been filed and will awarded soon in next 2 years. BH's position is definitely a tough one but even though the sale of IP is one solution it is not the best long term one for the HC.
Sentiment: Strong Buy