Someone has a bid in to buy 10,000 shares at $1.50 and the Ask is $2.25. Looks like something may be up.
They present at the LD Micro Conference tomorrow morning. Let's hope there is a nice PR to go along with it.
A reminder taken directly from the SWCC website:
Testing a small wind turbine to the requirements of the AWEA Standard will take at least six months due to the requirements of the Duration Test. Depending on the wind regime in which the test facility is located, testing and reporting may take as much as 1 year to complete. The process of completing SWCC certification depends on the quality of the test reports and level of issue resolution required. SWCC certification is expected to take approximately 2 to 4 months once test reports are received. The structural analysis of the wind turbine can be performed in parallel with the field testing.
Once more... google small wind certification council and click on Applicant Turbines. It only costs $2,500 to file the intent notice and "apply" for certification. They have not even filed an intent to apply yet and it takes 6 to 12 months for the durability testing PLUS another 2 to 4 months AFTER all test reports are received!
Now verify the tax credits for small wind expire on December 31, 2016. It is pure and simple fraud for Dieter to state they will be certified before the end of the year based on the facts from public sources.
There is no product and there is no certification application pending. Now it is possible he filed the application just now and it isn't on the SWCC website yet. That is irrelevant as even beginning now, it is virtually impossible to become certified before tax credits expire.
Another email blast from Dieter this morning filled with lies and half-truths.
First an admission:
"What you probably don’t know is that not a single vertical axis win turbine (VAWT) in our class has been certified by the industry’s official Small Wind Certification Council."
Then a lie:
"Sauer Energy is well on its way to be the first and only to receive full certification"
They have not begun the process as can be verified on the Small Wind Certification Council website. Go to their website and click on Applicant Turbines. You will see that Sauer Energy has not even begun the process. How can they be "well on the way" to achieving certification when they haven't even begun the process with an application? That is your PROOF of yet another blatant lie.
Another ridiculous statement:
"FIRST, we’ve chosen to go with the vertical technology, not horizontal. The design is extremely energy-efficient, and lends itself to all kinds of further technological advances "
A VAWT is LESS EFFICIENT than a HAWT. The design is NOT energy efficient and there are no VAWTs that can show even remotely they can produce any economical return on investment. That is one of the reason there is not a single one certified. The other reason is they are not mechanically sound enough to pass the durability testing.
"The only items left are to perform are both operational and non-operational analysis and life-estimation. These specific tests are laid out by the IEC and SWCC, specifying that a turbine must have a 20-year life expectancy."
OMG! The "only" items left to test are EVERYTHING. They haven't even applied yet! It doesn't cost much to apply. Even if they do, they will never complete the testing before the tax credits run out.
"That won’t be until towards the end of the year, and there’s nothing we can do to hasten this process"
There is no product and it has not begun the testing process. It CANNOT be certified before tax credits run out. You have been defrauded. eek legal advice.
Finjan’s complaint also seeks enhanced damages, including treble damages. We have sought a stay of Finjan Case 2 from the court because, among other reasons, we contest Finjan’s right to recover damages on three patents—6,154,844, 6,965,968 and 7,418,731—for which Finjan was awarded lump-sum money damages that we contend are for the life of such patents in Finjan Case 1. We believe this verdict was in error and intend to vigorously defend Finjan Case 2, regardless of whether the case is stayed. However, we cannot be certain that we will ultimately prevail. If we do not prevail in Finjan Case 2, another large damages payment may be imposed upon us and our business and results of operations may be harmed. Trial in Finjan Case 2 is currently scheduled for October 30, 2017.
We have not recorded a liability with respect to Finjan Case 1 based on our determination that a loss in that case is not probable under applicable accounting standards. Given the early stage of Finjan Case 2, we are unable to estimate the possible losses in that case. Accordingly, any damages payable as a result of a final judgment in these cases could materially adversely affect our financial condition and results of operations. In addition, any public announcements of the results of any proceedings in Finjan Case 1 or Finjan Case 2 could be negatively perceived by securities analysts and investors, and could cause our stock price to experience volatility or decline.
What a horrible disclosure! You would be a fool to invest in a company that lost a lawsuit for infringing on patents that are the key to their products and got sued again for willfully doing the same thing. Enhanced damages, treble damages and fees in TWO cases. That is too big of an unknown for any savvy investor to take a chance on. Blue Coat NEEDS to wake up. They will lose more in market valuation than what it would take to settle the lawsuits! When did Bain Capital become so incompetent?
They did mention the lawsuits in the S-1 filing:
For example, we are currently involved in ongoing legal proceedings with Finjan, Inc. (“Finjan”). On August 28, 2013, Finjan filed a complaint (“Finjan Case 1”) in the U.S. District Court for the Northern District of California alleging that certain Blue Coat products infringe U.S. Patent Nos. 6,154,844, 6,804,780, 6,965,968, 7,058,822, 7,418,731 and 7,647,633. On August 4, 2015, the jury in Finjan Case 1 returned a verdict that certain Blue Coat products infringe five Finjan patents in suit and awarded Finjan lump-sum money damages of $39.5 million. On November 20, 2015, the trial court entered a judgment in Finjan Case 1 in favor of Finjan on the jury verdict and certain non-jury legal issues. Finjan has also filed motions seeking enhanced damages on the judgment, including treble damages, which refers to the tripling of a damages award, as well as interest and attorneys fees, which, if awarded, could be substantial. We intend to vigorously contest this judgment and investigate all available remedies for relief, including currently pending post-trial motions and, if necessary, an appeal. However, we cannot be certain that any of our motions or our appeal, if we choose to appeal, will be successful.
On July 15, 2015, Finjan filed a second complaint (“Finjan Case 2”) in the U.S. District Court for the Northern District of California alleging that certain Blue Coat products infringe U.S. Patent Nos. 6,154,844, 6,965,968, 7,418,731, 8,079,086, 8,225,408, 8,566,580 and 8,677,494. On March 1, 2016, Finjan amended its complaint to allege that certain Blue Coat products also infringe U.S. Patent Nos. 9,141,786, 9,189,621 and 9,219,755.
to be continued
A big clarification is needed. $100M is the initial amount given in the preliminary filing. I can remember many IPOs that use this number for a placeholder and then the amount is many times higher. Doing a little more digging, it is more likely that the true IPO will be for up to $500M.
The prospectus should be available soon and we will see how they reference the ongoing lawsuits under the "Risks" section. I would think they would want to clear up everything with Finjan before the prospectus is outlined and I am still hopeful for some big news coming very soon.
The combination of strange trading activity along with the Blue Coat IPO announcement makes me think a deal is done and it is just being drawn up and will be announced imminently with the IPO paying for it.
You getting excited yet, truthbetoldkids?
Bain is going to hang on to as much as they can and the IPO will "only" be for $100M. Now for the good news in the commentary of the uses for this money:
Michael Knight, president and chief technology officer at Encore Technology Group, a Greenville, S.C.-based Blue Coat partner, said the amount of debt held by the company was concerning, as he would rather see the security vendor invest in product development than paying off previous debts.
"With Blue Coat's current debt load, they will have to show that only a small amount of the hoped for $100 million will go toward reducing debt and a maximum amount would be put toward sustainable research and development and sales enablement strategies," Knight said in an email. "As a security vendor, research and development is not only critical but is paramount in maintaining value and relevancy so minimizing spend in that area would be disastrous and nothing happens without sales."
They are getting pressure from their partners to do "sales enablement strategies". What could be better than locking up the intellectual property at the heart of your products?
Hmmm... now what could they do with $100M and isn't it curious they chose right now to raise it?
Dare we dream?
You know I hate blind pumping as well as blind bashing and I back up what I say. Here are some random thoughts to make you think:
Finjan patents are a big part of BCS products.
Bain Capital bought BCS for $2.4B around 6 months before Finjan won a $39.5M jury award.
Bain is now taking BCS public.
Bain does not like loose ends and not controlling the IP could greatly hurt the IPO.
First lawsuit is awaiting judge's ruling for pre and post-trial interest plus $7.8M in fees.
Second lawsuit is alleging WILLFUL infringement which could result in triple damages.
Baffling delay in the judge making her ruling on hearing conducted back in April.
Harbourvest (Bain neighbor in Boston) holds around 20% of Finjan stock.
Other insiders have controlling interest and can approve a deal without outside shareholders.
It is not a bizarre leap of faith to connect the dots and think some kind of a deal can be done here with BCS. BCS would be legally obligated to point out their legal proceedings in their prospectus material for the IPO. It is obviously material if they have already lost one case and have a similar one ongoing for willful infringement. Not controlling the intellectual property that is at the heart of their products could easily hurt their valuation by hundreds of millions of dollars if not up to a billion dollars. Markets don't like uncertainty. Two great scenarios: I could see BCS buying Finjan to control the IP. At the very least, they should quickly want to do a licensing deal and settle both lawsuits. I could also see Bain throwing $100M at Finjan and coming out sweet. They could hold Finjan and keep it as a separate entity. Of course, both lawsuits against BCS would immediately go away and a licensing deal for a nominal amount would be signed. Bain would continue to pursue licensing deals with indirect competitors while denying licensing to key competitors. They would continue to allow Finjan Mobile and CybeRisk to grow and create value there.
We are seeing trades printing above the Ask and below the Bid today. Sure makes me think a deal is already done and it is going to be valued based on today's closing price. I can't believe this many people are getting horrible fills. Very strange activity, indeed. Two competing interests are jockeying and manipulating the price.
Is this going to be your typical deal announcement on the close of a Friday?
Everybody make a 100 share buy at market at the close. I have a hunch it is going to be in our best interests to offset the flurry of small sells at the close. Something is up and truthbetoldkids may be on to something with that Blue Coat IPO revelation.
I was very familiar with Harbourvest which made me take extra notice of Finjan when I began my DD.
It is kind of like Monopoly. I don't think the two would be in direct talks over Blue Coat Systems taking over Finjan as a standalone deal, but I could see it coming up with some wheeling and dealing as a sweetener to another deal. They could be involved in a multi-billion dollar deal and as an afterthought have their Finjan holdings thrown in. It completes all 4 railroads for Bain while being just an extra property for Harbourvest.
Like I said... the only thing that worries me is "only" getting a 100% premium and having them sell out for $3/share in exchange for employment contracts with the acquirer. I think a minimum price should be $100M or a 200% premium from here.
I don't know what it is, but I sense that something big is in the works. They are going all-out to increase visibility and make the operations appear strong with the financing. If I were the other litigants... I would try to get a licensing deal done as soon as possible before they could be acquired and the acquirer saying, "No more licenses. We want exclusive use of the patents and you are hereby given a cease and desist order and we will litigate if you don't stop violating our patents".
I just don't see a downside here at these prices and I will continue to buy these crumbs when they are available. We have painting the tape on BOTH sides which makes me think they are getting down to the nitty gritty with evaluating the enterprise value. We have seen the price artificially high at the close and artificially low. There are definitely competing interests painting the tape and an objective observer can see it both ways.
This could get very interesting.
By the way... I think it is less likely that Blue Coat acquires Finjan than they do a licensing deal that ends both lawsuits and allows them to continue using the IP.
I would rather see the latter as I think there is more potential gain as an investor for allowing Finjan to pursue their business plan than selling out now.
Blue Coat is the wild card now. This judge is too good to delay a ruling this long unless she was told there are serious talks ongoing and both cases may settle soon.
Bain bought Blue Coat for $2.4 BILLION months before the trial.
As a public company it makes sense for them to want to get rid of the unknown and settle. Look what is happening to Sophos. They have lot about $150M in market cap in the past week since they came out unfavorably and had their defense taken away. They need to settle to take away this uncertainty.
Blue coat could come out VERY BADLY in the second trial since the allegation is WILLFUL infringement which could result in treble damages.
Did Finjan get the financing to help acquisition talks with Blue Coat? Now they can say we don't NEED you to buy us and we can survive on our own. It values the enterprise at more than a fire sale valuation.
I think it is most interesting that there is no ruling yet from the judge. I am left with no other explanation than she was told to wait as there are serious negotiations ongoing to settle BOTH cases. An acquisition wouldn't surprise me. ESPECIALLY with the IPO of Blue Coat. Bain doesn't like loose ends and I can't believe they wouldn't control the IP before going public.
The problem is valuation. The market cap is low, but the value can easily be argued at many multiples higher.
Look at the size of the orders somebody flooded the market with at the close to try to make it appear down:
16:00:02 $ 1.46 41
16:00:02 $ 1.46 23
16:00:02 $ 1.46 22
16:00:02 $ 1.46 32
16:00:02 $ 1.46 100
16:00:02 $ 1.46 2
16:00:00 $ 1.46 100
16:00:00 $ 1.46 33
16:00:00 $ 1.46 11
16:00:00 $ 1.46 38
15:52:51 $ 1.51 159
I think some shorts are getting really scared there isn't enough volume to cover and they are trying to cover slowly at break-even before they take a huge loss. This is one that could double with the right news.
Slide 10 of their presentation states the current status of the Palo Alto case is "All IPRs Decided".
Is there a question of only lifting the stay on 6 of the 10 patents asserted?
Also, for IR... you need to update your "Enforcement Schedule" on the website. It is an old slide and not the updated one from recent presentations. About gave me a heart attack when I looked at it and thought some of the cases had regressed.
I believe they gave an update on FireEye in their presentation. I think all reviews were completed and they expected the stay to be lifted soon. Will need to get on pacer and see if there are any motions waiting to be ruled on or future court activity scheduled.
Symantec has a schedule already set that takes the trial date all the way out to 2018. I think they should be given a favorable licensing agreement and get that one over with.
Sophos is down over 4% again today (London Exchange). Their market cap has gone from well over a billion dollars to under $900M since the update on their case with Finjan. They NEED to settle quickly. Markets don't like uncertainty. Their market cap will rise more than the total value of their licensing deal once they settle. I place odds at over 90% that case will settle before trial and should be a really sweet announcement.
Perhaps someone at the Marcum Conference was impressed enough to take an opening position lifting it to $1.61. These conferences are great because even if someone doesn't buy immediately, it gets them watching Finjan and I believe once anybody does real DD on them... the reasons to buy become very compelling.
We also had the 70K+ in short interest. I can't believe anybody would be foolish enough to remain short here. The majority of the shorting was done in the run up to $1.74 which means the majority were probably shorted in the $1.50s and $1.60s. If they didn't cover yet, they will be compelled to cover as their profit gets wiped out and they are facing huge losses and possible margin calls. Hey, if we can't buy volume... they can't buy volume either to cover.
I'm glad we had that blip yesterday for those losing their patience. There will be more like it. It won't be straight up, but I need to fight the urge to try to time it. One of these days it is going to take off and I will kick myself if I don't keep my shares until then.
This happened on the day they announced the financing. There was small, but not totally insignificant volume in one flurry of buys and then it seemed like they had to announce the financing a little before they wanted to.
We'll see if there is anything announced after the bell. Some office staff somewhere might be frontrunning on news before it is publicly disseminated.
Yes, that is correct. If you reduce those held by insiders and institutions you get a public float of around 6M shares.
That small public float can help the price double or triple quickly. I have seen it happen many times with low-float stocks. The bad thing is over 50% is closely held. Let's say Cisco or somebody made a ridiculous offer for $60M or not even $3/share. The insiders hold enough shares to approve it. The rest of the shareholders would only get a double out of it and not anywhere near its real value, but the insiders would all get nice jobs with the new company.
Okay, I'm sure many people are saying they would take $3 now and be happy, but this has the potential for so much more. I believe they want you to think of it as a patent troll company now, but once they are close to breaking out with the operating units they will agree to become a division of some huge company. That is my only fear with them.
One quick note for IR. Make sure your speaker at conferences repeats the question before answering. People listening at home can't hear the questions and it is very annoying to not have that context.
I also think it is time to quit side-stepping the questions that always come up about Cisco. Why no licensing agreement with Cisco? Is it an understanding that if they don't make an issue out of poaching their employees that you won't try to enforce any patent issues with them? Is it because you know if they liquidated their 7.5% position they could tank the stock price? Is there some understanding about giving them first right of refusal to buy the company after building it up a bit? We don't need full details, but some general statement needs to be made.
Wasn't that brilliant of Cisco to take a 7.5% position? Gave them immunity from patent enforcement and they will even make a nice profit for less of an investment than a licensing deal would have been.
=The fact that the Judge doesn't just put an end to it is the scary part.
The judge CAN'T just put an end to it. She can rule on what is before her, but she cannot force them to give up their right to appeal or force them to make any payments until they run out of all legal options.
What she CAN do is award pre-trial and post-trial interest. What she CAN do is award the fees which I think were about $7.8M. The second case is where the judge can do even more. That one is alleging WILLFULL infringement and is subject to triple damages.
Forcing Blue Coat to end this all now is not in the judge's control. Perhaps Finjan is taking my advice regarding tough talk publicly, but there is a real effort being made to settle both cases right now. I can't imagine another reason why the judge's ruling would take so long.
Like I have stated before... I would like to see a settlement with Blue Coat even if it doesn't maximize revenue out of them. As you stated, this is the most misunderstood stock I have ever seen. Get the lawsuits done and begin putting all efforts into growing the two operating business units.
They got a nice buyer that took it to $1.61 and then a 100 share sell knocked it down to $1.46. Unreal.
There will be more who value it much higher and pick up chunks at a time. I keep nibbling and am content for now to keep building a position until the bigger events play out.