Do the Math? So how much of AAPL's $181 billion in 2014 revenues will be subject to the VHC royalty rate of .0098? Tell me that and I'll get you a number pretty quick. If it is 30% then that provides VHC with revenues for 2014 of $532 million.
I don't really believe the numbers of shares short is a reliable statistic. However, why would persons in a short position not be covering their position now and banking their profits? After all the PPS has declined from $34 in the past year, and from $25 over the past two years. At some point, like maybe $17 a share, there is not much downside, but quite a bit of upside. The risk of continued short positions seems too great to maintain. I really don't get this huge sell off at this level. I thought naked short selling was illegal. My broker is constantly asking me to loan shares to shorts, which I will not do.
So what is the shorts exit strategy if they have not bought to close by now? I can't understand why short interest has remained so high during the downward spiral in the PPS. Great to see the upturn today.
I'd say if shorts are covering now they made some very healthy returns. Clearly they have done a lot better than anyone holidng this long positon all thru 2013 to date and watching the PPS go steadily down from around $28 on 1-1-13 to sub-$17. I have most of the shorts on this board on ignore, so I have no interest in their rhetoric. Unfortunately the longs on the board are left with almost blind speculations over the continued morass of litigation, unending appeals, & potential retrail decision. Meanwhile what is the management team doing other than showing up in court occasionally. Do we really know if they are engaged in monetizing their patent assets by negotiating with other parties - no real proof of it.
Hope you are right. Long term holder and patiently waiting for BSDM to move back to $7.00+. Been adding some at the low $1.15 area. Not a lot of shareholders in this company according to the AR. Still I am not sure when to expect them to reach BE, but would like to see it in 2015 at the latest.
All you say is correct and undisputable. But, the PPS is $1.19 and why bother selling it now? The downside is not much at all, and they are reporting meager progress. Clearly they need a new CEO, based on his inability to grow this business for so many years. We might see a day when the sale of one unit is not newsworthy, and that will be an indication the company is actually executing a business plan. From the #$%$ they put out as so called financials, if remains hard to tell how many units and how many antennaes they need to sell a year to actually break even and what exactly is the timeframe for accomplishing breakeven.
I've owned VRNG for over a year, sold monthly Calls on 15,000 shares averaging about $.14/share/month at a strike of $3.50. Bought in under $3. Still holding, still writing Calls but have bumped the strike up to $4. VRNG has almost no downside from $3 and good enough upside for decent to excellent option premiums. Granted it was a nice market in 2013, but the Call writing strategy I used on VRNG returned me far greater than 20% and I have substantial unrealized capital gains at the current PPS, not factored into the ROR from the options. Your point is not incorrect, but there are other ways to prosper.
You should not be critical, given your analysis is flawed. You indicate AAPL would be taking on "more debt"- they have no debt. Why should AAPL take on debt? It is cheaper than the cost of equity. Figure it out, it is a simple matter of determining an appropriate capitalization structure, which can be optimized by AAPL taking on significant debt and buying back shares. I vote with Carl on this one, he makes good sense, and it would be good for AAPL shareholders long term which is sort of unusual.
Is there going to be a ruling in our lifetimes? Do the lawyers on either side really want to close the case? Better stated we know the AAPL lawyers are charged with avoiding royalty expense as long as possible, but got to wonder if the VHC legal team is milking the case. Delays forever, delays. What is the time frame now on the AAPL case and CSCO case?
VHC has cash and assets of about $50 million; their primary expense is lawyer fees which I believe are mostly contingency based, and litigation expenses. PPS has nothing to do with their cash position unless they sell more stock which they have no plans to do. If the PPS of VHC is $19 or it is $40 it has no impact on the litigation in place. As to your point about the AAPL royalty payments to VHC being a "huge blow" I fail to see how that is true when it impacts AAPL's current cash position by 2% or less, at most. We are not talking about reducing AAPL gross margin by this 1.5% royalty rate, overall. AAPL is playing the game and delaying paying more royalty as long as possible - time does work against patent asset holders. As to AAPL being behind New Bay - I have no idea. That would seem rather easily proven, and I have seen no proof. As to a potential buyout of VHC by AAPL or a consortium of users or VHC patents - I think that probability is quite low, but it is wishful thinking.
2013 was a pretty rough year for long holders, particularly that day in March when the PPS collapsed over $13.50 when the CSCO jury verdict was delivered. 2014 will be an interesting year and if VHC gets a retrial of the CSCO case I hope we see a commensurate appreciation in the PPS to make up for the bloodbath last March. I agree with your points except I doubt AAPL is behind short selling of VHC. Only if AAPL was planning a take over or acquisition of VHC would that make sense to me; and even then it would be so manipulative I doubt AAPL would deploy a tactic that is probably illegal manipulation. VHC is not a significant issue to AAPL with its' $150 billion cash hoard. Of course that does not mean VHC is not a great investment at this level, nor does it mean AAPL wants to lose and pay the royalties. Good luck to all us longs in 2014.