A big fat told you so in 2011/mid 2012. I see positives and negatives from the settlement. I do see the strategy and big picture behind it. RH and IB visions are much different than PA's.
I am neutral on the development and neutral on the IP. The IP is far too complicated to understand from an investment standpoint for most and PA had some major flaws in his representations. RH and IB are cleaning up the mess quite well.
Maybe the Brean Murray analyst will speak with me next time instead of creating a fantasy model of the IP valuation and analysis. Here is the exact text that I sent to him:
1. Guiding for 7.5M revenue in 1Q2013 when the company guided to 5.3M. Why is there a difference? I am guessing it has to do with the Lucid settlement or a contract that was able to be booked in Q1. Timing issues.
2. The models are done with a 95M fully diluted share count. We know that there will be an "earnout" due this quarter paid in a combination of cash/stock at the companies discretion if they meet the numbers. $15M would be the minimum and $27.5M is the maximum. I would make an educated guess that it would be mostly paid in common stock. At $2.00 a share at minimum it is 7.5M shares and max it would be 13.75M shares.
3. Estimating cash at 3.6M 1Q2013 and a negative cash balance of 3.4M in 2Q2013. A raise would have to be done in Q2 or Q3. $20M would be the number I would be looking at raising, at $2.00 is 10M shares. This additional money should capitalize the company through the two trials. With the PPS currently under $2.00 a raise will probably be done at a lower level, I would want $1.50 if I was to participate in the secondary.
4. I am expecting about 20M shares being issued to cover the "earn out" and cash raise combined. Why is the additional dilution not being factored into the model?
5. On your litigation model I noticed you are using 40% assumed level of profits. I believe the standard or average is around 25%-30%. The reasonable royalty rate is also listed at 5.5% where the average is between 1-2%. I know there are always special occasions but why are your estimates substantially higher? During the VHC v Microsoft trial there were major overestimates being done concerning damages / settlements. The trial yielded a 106M jury verdict and 200M settlement. The estimates were calling for 500M verdicts / settlements. There were many that lost a lot of credibility afterwards.
6. The current margins are over 60% which is excellent. I don't see why margins would be under 50% in FY2015. I know expenses would increase but I don't expect them to increase at that level. I am expecting 55%+ going forward. What is the reasoning for estimating the much lower margins?
As of 2/12/2013
1. Augme did $5.2M in Revenue in Q1 2013. Finally reached $7.3M in Q3 2013.
2. I was wrong on the earn out share count
3. PA is an idiot to not raise cash at that time.
4. The analyst should have factored dilution into the model.
5. A big fat I told you so.
I am bullish on IB/RH and the core business. I am neutral on the IP. The IP is impossibly difficult to value and discuss reasonably with most investors. I don't know why many try. Ignore any IP development, seriously.
The pumpers of this stock will slowly and gradually go away just like that guy Arn, especially now that they have been proven to be totally wrong on every single issue regarding augme. Arn has disappeared and won't show his face ever again. Serial will slowly go away as people are seeing through his total bull#$@@. Obvious stock is now dead. IMO is expect a sale of the co in the future at no than ..75 to a buck. No reason to pay more, augme has nothing now, nada, zero. GAME is over pumpers
Hey birdsht, be a man for once in your life and explain to everyone here why you continue to post? Are you a former disgruntled employee who got (bird)sht canned? Come on, you can do it. I promise, it really won't hurt that much.