Rashomon, thanks for the answer about Berg's buy. Yahoo record these as two consecutive days in April (13,14 if memory serves) at 40,000 and 100,000 respectively just above the then "Maginot line" at $15. Berg has since sold a lot of IDTI, so I presume he has ample ammunition to protect that line again. We should see his presence in the next few tough days (g).
Did you get the same impression I got that the holy's strategy is slowly moving away from manufacturing as the "mainstay" of future profitability and licensing as the work horse of future profits? If indeed they can get within two/three years a $ billion of other people production paying royalties (or about $30 MM per year), then $45 MM was a small price to pay. Gee, even if you assume another $90 MM of the holy one own investment in the technology, that is still a pretty good deal.
I think that we may have a transition in the market perception of the holy one from a future producer with possible target market in the $500 to $1 B sales annually, to a future licensor. The difference is huge. To get to sales levels of $500 MM for instance, we should expect something of the order of 5 to 7 times their current investment in cap ex (I would say between $40 to $50 MM for production rate of between $70 to $100 MM annually), or at least another $200 MM or so. But staying at let say the $70 MM to $100 MM (once they get there) level of self manufacture and not spending these huge amounts on cap ex, but collecting royalties on other people's effort seems much more judicious, if of course, they can show that they can be successful.
Of course, one could take a "devil advocate" position and state that if the patents had that kind of future royalties stream in them, Telecordia would not have let these go for just 3 MM shares. I thought that Lev responded quite well to that possible query by suggesting that only the merging of both Telecordia and the holy technology yields a workable and profitable Li-polymer technology. Of course, we still need to see the "profitable" part working. I think many were disappointed with that $1 MM down the drain batch of batteries. To think of it in positive light, that $1 MM in lost production was potentially $2 MM in sales, and thus without that unfortunate incident, the sales rate in the last quarter should have doubled (shoulda, coulda, I know <g>), and the operational negative cash flow could have been cut by 30% to only about $4 MM. well, maybe next quarter.
Zeev |
