It is such a shame that so many comments on this board are so shrill and off topic.
As discussed many times before, VHC's future is quite binary, depending almost entirely on a favorable legal outcome at CAFC which may, or may not, lead to Apple deciding to seek a settlement with VHC...If such settlement were to occur, VHC would finally establish a REVNUE MODEL which would allow institutional investors FINALLY to begin to discount potential future cash flows...Moreover, an Apple settlement would probably precipitate an Android license, as VHC would surely not allow Android system (which is larger than Apple) to continue to operate without a license.
But, we still have a ways to go before VHC reaches the "promised" land....The "shorts" are still winning, as the stock still did not see a follow-through burst today.....In other words, institutional investors still do not see/imagine/discount VHC trading at $30/50/60/80/100 in the coming weeks or quarters.....Cautious optimism is the best one can say at the moment, as the stock has merely bounced off its recent lows of $12/13 up to just $16 here today.
We can only speculate what KL is doing behind the scenes as it relates to discussions with other potential licensees, such as the Samsungs/Motorolas of the Android ecosystem.....Unfortunately, VHC has always been tight lipped about any details.
However, I am inclined to see the glass as half full for now....To remain short at $16 is to dismiss entirely the significance of the CAFC citation of the VHC/Apple methodology in its 4/25 decision in Apple v Motorola. How can Apple attorneys NOT have noted the reference to their own litigation with VHC as a PRECEDENT which supported Apple's victory over Motorola......How can CAFC possibly REVERSE itself and now invalidate the District Court's precedent which it just cited to award Apple victory....Surely Apple attorneys recognize that they are playing both sides of the street. So, which is it?...
Why stay short after this?
sumark, nice post. I agree with most of what you suggest. I guess my gut feel now is: Apple/Braeburn IS the short side of this. As you suggested in one of your posts, "who could possibly be short or shorting this stock at this point?" Exactly why I feel IMHO that Apple IS the short. The answer to your question IS NO ONE, unless you control the trade.....meaning, you know exactly when you're going to settle or unwind your short position or offer a buyout/stake position. I have invested for years and NEVER, EVER, have I witnessed such GREAT NEWS have a deleterious effect on a stock to the DOWN SIDE like this one!! Who has that kinda money to risk or play with?? Answer: you probably guessed--Apple/Braeburn. They KNOW what the end game is gonna look like.
Now as to why no new buyers? Well I agree with you to a point, but so far there is no explanation as to how, some time ago now, the stock had enough/plenty of buyers to run the price over $40 yet with an even stronger than ever position there is not enough buying power to run it over $20? Sorry, I can't reason that out. What I can say is that no one (hedges or others) would buy if they thought Apple/Braeburn with about $165 billion behind it to defend it's position would buy until absolute confirmation that A/B were out of the picture!! Now that makes sense to me. Here's the best part, A/B will lose no money in this process, in fact, they will MAKE MONEY when they decide to leave. Either BUY shares or unwind in dark pools, AH, etc, other slimy ways to pull out without being "noticed." Tough to do, but with that kinda money, not impossible.
The only way A/B might get caught at this game? (One I believe they are sweating their collective behinds over) Rothman or RPX in conjunction with A/B are caught doing the nasty!!! All bets are off then!!
Look forward to your thoughts.
I have to disagree...Apple is not short VHC, nor are they in cahoots with another operator who is short...Not their game...As for why is nobody buying, I think it is very simple.
Most every major institutional investor does NOT want to invest in a patent company that has NO CURRENT business plan/model....In other words, there are no cash flows associated with any business, because VHC currently has no business model....If and when VHC can win over Apple with a settlement agreement that includes an ongoing royalty rate, that is when institutional investors will happily take a look and decide to invest...They may miss out on a 10 or 20 or even 30 pt rise in the stock...But, they won't care....The risk of a total collapse will have evaporated and they will be happy NOT to have to worry whether VHC has a business or not...It will clearly have a business.
Finally an honest long.
Best post of the year!!!!!
I along with everyone else is very tired of the "Dat You", "TimingtheWags", and the "Moistees" bozos on this board.
They do nothing but post decieving BS WAGS with factless titles. Hopefully those idiots will learn from a post like yours sumark4221.
Way to go and keep up with the honest and factful information.
As for "Dat You", "TimingtheWags", and "Moistee".......
KEEP YOUR WILD #$% BS WAGS TO YOURSELF AND STAY OFF THIS BOARD!!!!!
So, if the rationale for being short is suddenly not so clear, market pros should begin to figure out which way the wind is blowing....If the shorts cannot continue to press the stock lower, then emboldened longs, if they can be found, will begin to buy.....If there is no longer a reason to be short, then the "shorts" should cover before the "longs" get excited and really start buying..
Again, nothing to date suggests that a buying stampede is right around the corner...Without a court decision or an actual settlement with Apple and/or licensing deal with Android, unbridled buying of VHC is not likely to materialize.
But, if this 4/25 CAFC decision should suddenly change the landscape for Apple, we may just see a bolt of lightning one evening/morning in which Apple and VHC finally come to a settlement....If if if that should come to pass, then fireworks could finally explode.....A one-time settlement will be an immediate bonus...But the announcement of an actual licensing deal will finally validate VHC as a legitimate licensing business....And I cannot imagine Android players not licensing within one week of an Apple licensing agreement...And, don't forget MSFT, as well....Finally, VHC can still try to hold CSCO's feet to the fire.
In short, VHC in the 20s or 30s is quite possible/probable...Beyond that is pure conjecture at this stage. But, at least institutional investors would finally feel safe about "jumping into the waters" Heck, perhaps some mainstream brokers such as Morgan and Goldman might finally begin to cover the stock...I daresay they would initiate with "Buy" ratings.
Stay tuned and stay vigilant.