| Note that the amount of interest Jain will potentially owe Infospace appears to be growing by around $4 million per month. When Judge Pechman announced her verdict in mid-May--about two months ago--the principle amount of the fine plus accured interest, as estimated by Jain's own lawyer in court filings at the time, was reported to be $237 million. In today's article in the Seattle Post-Intelligencer (http://seattlepi.nwsource.com/business/130396_jain11.html), the plaintiff's lawyer estimated that the amount of the fine plus interest was $245 million. So in two months, the amount of interest Jain would owe Infospace has grown by $8 million, or approximately $4 million per month. The longer Jain delays paying the fine, the greater the interest grows that he may be forced to pay later. Incidently, I have no idea by what calculation the the court awards interest against Jain on Infospace's behalf. He may appeal and attempt to delay the final outcome of the case as long as he can, but there is obviously a severe price for doing so and losing. We now have a crude basis for extrapolating how much more interest Jain will potentially owe Infospace with each passing year that he delays paying the court imposed penalty and it ain't pretty. If he delays payment by another year, the amount of interest he will potentially owe, based upon the current rate of interest accumulation, will grow by approximately $50 million, or around $1.50 per INSP share in cash--and that figure doesn't include the possible affects of compounding. Two more years and it looks like he'd wind up owing another $100 million in interest, increasing the total amount of the fine by 50% from its original level. Does anyone know what Jain's net worth is? If he delays long enough, at some point the size of the fine will exceed his personal net worth and he'll risk bankrupting himself. How far into the future would it take for that to happen? As it is, according to the article, if he does appeal, he may have to post as bond an amount equal to the current value of the fine: $245 million! Can he do it? Proceeds from his recent sales of INSP shares won't even cover the amount of interest his fine accumulates in just one month! |
