***Official*** 2011 Stock Market Thread

[kevman]

So whats gonna happen if they get a favorable verdict? Wil the stock double or something ?

 

[SunnyD]

Well, that depends on what information you are tryign to confirm.

Has anyone actually looked up studies on this?

Well what I was actually trying to allude to is a quick verdict usually means a unilateral verdict - in either direction. The reason people want a quick verdict in cases like this is they're looking for a unilateral verdict for the plaintiff, which generally means high damages. A quick verdict can also be for the defense in which the plaintiff's case was completely lacking in merit.

Longer decisions usually means there's probably some merit to the case, but the longer it stretches on, it usually means there's a lot of fuzzy area for the jury to decipher. It also means that there's more potential for "partial damages", which while beneficial, won't generally net shareholders nearly as much, plus also tends to be more friendly to appeals.

Basically, quick verdict = 50/50 good or bad. High risk, but high reward.
Slow verdict = More variables (technically higher risk since the jury is spending more time weighing defense arguments), potentially less reward (potentially no/partial damages).

 

[chusteczka]

So whats gonna happen if they get a favorable verdict? Will the stock double or something ?

Due to California's law that triples monetary damages awarded to the plaintiff, it is expected for the stock price to double, triple, or even quadruple. Probably due to the increased worth of the company and possibly with the hope that such an award will be passed on to the shareholders through dividends.

 

[FelixDeCat]

Due to California's law that triples monetary damages awarded to the plaintiff, it is expected for the stock price to double, triple, or even quadruple. Probably due to the increased worth of the company and possibly with the hope that such an award will be passed on to the shareholders through dividends.

You're dreaming pancho.

 

[chusteczka]

You're dreaming pancho.

I know, I know, I am on your side! I happily (and luckily) got out of RMBS somewhere around $22-$23 some time ago.

I honestly cannot think of any other reason why anyone would be invested.

 

[lothar]

Just came back from my 3 week trip Sunday night.
I officially stopped shorting MHS(the 1st stock I've ever shorted) today, and bagged my profit.
Judgement hasn't come yet(as I said earlier, I believe the merger of MHS and ESRX is anti-competitive) from the regulators, but I'm not waiting for it.

Looks like I should have shorted NFLX as well like I predicted earlier in the year, but unfortunately it didn't fit my criteria I set for shorting stocks.
What happened to NFLX? I haven't had access to much internet/foreign news because I was at my grandparents village for the majority of the time.

 

[Azurik]

I honestly cannot think of any other reason why anyone would be invested.

They're some good reasons, although it gets lost whenever a legal point comes to head.

To name a couple:

1. Rambus and General Electric teaming up, with GE paying RMBS royalties for their LED technology when it comes to commercial lighting.

2. ATI is switching their high-end graphic chips to XDR-2 (successor to XDR).

Rambus is a legit company, but mired into epic legal battles that cost the company millions every quarter in legal fees (mainly with Micron and Hynix now). You have to protect what is yours though, and they do have licensing agreements with giants like Samsung, Elpida, Toshiba, Panasonic, Flextronics, AMD, Intel, etc. They also recently bought out some other company (crypto tech-based) for $300+ million that provides another sector RMBS can play in, and which already has a multitude of licensees. Maybe RMBS will strong-arm them (won't let them renew crypto agreements unless DRAM is licensed too). Who knows.

 

[Azurik]

Azurik is most likely in the courtroom at the moment, which would explain the lack of comments from him so far today.

Yes, I am in San Francisco - hopefully this is done by Friday because I'm leaving for L.A. to visit my best friend and then I'm off to Ukraine for 1 1/2 weeks immediately after.

 

[Azurik]

Normally, the longer a verdict takes, the less likely of a positive outcome with egregious damages. Basic translation: People hope for an open and shut slam-dunk case because it leads to a black and white decision that usually means major harm was done therefore high damages will be awarded.

It depends. My opinion:

1. Quick decision - BAD for Rambus. Most likely means jury found that defendants are not guilty and they don't need to fill out the rest of the jury form.

2. Semi-long decision - Good for Rambus. Jury finds defendants guilty and now is assessing damages in multiple categories. The jury verdict form is kinda long, with different factors involved. Takes time for 12 people to go through.

3. Long decision - Good or bad. Good in that it's a very complex case and these things take time. Bad in that some are not agreeing, and they are debating back and forth. Could lead to a hung jury and restart the trial over again... don't want that...

Bottom line, I think it will be positive for Rambus, obviously spoken for by my shares. The last 38-0 vote in favor of Rambus (RMBS vs Hynix in infringement case in 2006) took 6 days to deliberate and they awarded Rambus $350m+.

The juries today asked to have testimony and video from Hynix VP of Marketing, which, if you ever have a chance to read the script, clearly shows he was lying and backtracking on a number of things. They also asked for Dell's testimony in support of Rambus. This leads me to guess they already found Hynix+Micron guilty and are in the punitive damages of the verdict form. JMHO.

FYI, I bought another 500 shares today at $14.30 - I just can't get enough punishment.

16,000 shares now (+ calls and puts).

 

[Azurik]

You're dreaming pancho.

Well, if you look at it as someone buying RMBS at $10 a couple months ago anticipating this decision and the run-up since then... $30 would be a triple for them. I don't think that's a long shot if RMBS gets maximum damages, which I don't think it will ($4b trebled to $12b).

I would be very happy with $2b trebled, but we'll see. Don't want to count to count my chickens yet.

 

[chusteczka]

Azurik provides very good answers to any question regarding Rambus, making it easy to get caught up in it. However, Rambus's Book Value worries me.

Rambus has a Book Value of about $4.
The Price/Book Value is $3.68.
The current price is $14.31.

It seems to me that their assets are valued at $4 and their stock price has already tripled in expectation for triple damages. This is similar to how a stock price increases just before a scheduled dividend payment.

This provides the impression that if they do win the settlement, the stock price has little room for upward growth. However, losing the settlement provides much room for the stock price to fall.

Can anyone illuminate this situation?

 

[zimu]

Azurik provides very good answers to any question regarding Rambus, making it easy to get caught up in it. However, Rambus's Book Value worries me.

Rambus has a Book Value of about $4.
The Price/Book Value is $3.68.
The current price is $14.31.

It seems to me that their assets are valued at $4 and their stock price has already tripled in expectation for triple damages. This is similar to how a stock price increases just before a scheduled dividend payment.

This provides the impression that if they do win the settlement, the stock price has little room for upward growth. However, losing the settlement provides much room for the stock price to fall.

Can anyone illuminate this situation?

who cares about book values when Azurik has been confident that RMBS is going to quadruple in value since 2007 (when it was worth nearly 50% more).

 

[chusteczka]

who cares about book values when Azurik has been confident that RMBS is going to quadruple in value since 2007 (when it was worth nearly 50% more).

Sarcasm is easy but he has defended his decisions well with thorough research and involvement. He truly believes in this and I cannot fault him for that. His involvement is the main reason I am reconsidering this stock but I am not as knowledgeable as others in stock evaluation.

 

[Azurik]

I don't pay attention to book value too much as it only tells me how much net value is per share, without regards to future earnings or prospects. Apple's stock has book value for $74, yet it trades in the $400's. I tend to be "forward-looking" in most things in life, and take risks based on that (in and outside of stocks).

Take a 21 year old college student is just graduated for example. He probably owes some amount of student/credit card debt and looking at him equity wise, he has a negative book value. With just that stock screener, investors would pass on him. However, what book value doesn't tell you is his earnings potential and growth for the next 5 years. He could be an average Joe who earns $45k throughout his life (still better than his perceived book value) or the next Mark Zuckerberg (homerun stock).

The point is, you just never know and need to take risk accordingly and within your comfort zone. This has worked out pretty well (luckily) in my young (relatively) life

I look back at the last 10 years and think what wouldn't have happened if I didn't do this and look up to my father who has the same personality.

 

[Azurik]

who cares about book values when Azurik has been confident that RMBS is going to quadruple in value since 2007 (when it was worth nearly 50% more).

You could have bought even more like me at the single digits, even $5 and still be sitting on a triple with ongoing potential

 

[chihlidog]

Book value is only one factor when considering the potential for a stock. IMO, most people overanalyze the market. I'm not an expert, but I've been playting the markets for 20 years now with virtual money. Had I done it with real money, I'd have made healthy profits, and rarely do I actually calculate "book value" of a company.

 

[chusteczka]

Thanks guys. I also just realized there is not a direct relation between triple California damages and tripling the company's value. My question was poorly thought out.

 

[JTsyo]

I don't pay attention to book value too much as it only tells me how much net value is per share, without regards to future earnings or prospects. Apple's stock has book value for $74, yet it trades in the $400's. I tend to be "forward-looking" in most things in life, and take risks based on that (in and outside of stocks).

Take a 21 year old college student is just graduated for example. He probably owes some amount of student/credit card debt and looking at him equity wise, he has a negative book value. With just that stock screener, investors would pass on him. However, what book value doesn't tell you is his earnings potential and growth for the next 5 years. He could be an average Joe who earns $45k throughout his life (still better than his perceived book value) or the next Mark Zuckerberg (homerun stock).

The point is, you just never know and need to take risk accordingly and within your comfort zone. This has worked out pretty well (luckily) in my young (relatively) life

I look back at the last 10 years and think what wouldn't have happened if I didn't do this and look up to my father who has the same personality.

Been reading the The Unincorporated Man?

 

[Azurik]

Been reading the The Unincorporated Man?

No, never heard of it, but I just read your wiki link - interesting. I might pick it up for my iPad

 

[basslover1]

Well, I did get in on Blockbuster this morning, not nearly where I wanted to at the .08 cents it was trading at the end of last week, but still enough for a small profit.

Considering it was my first ever trade, I'm pretty happy with it thus far.

 

[SunnyD]

Well, I did get in on Blockbuster this morning, not nearly where I wanted to at the .08 cents it was trading at the end of last week, but still enough for a small profit.

Considering it was my first ever trade, I'm pretty happy with it thus far.

I'm not sure why everybody is so high on it. They're not a competitor to Netflix as long as the service it tied directly to Dish subscribers.

 

[richardycc]

I'm not sure why everybody is so high on it. They're not a competitor to Netflix as long as the service it tied directly to Dish subscribers.

supposingly It's all about their NOLs....

 

[basslover1]

I'm not sure why everybody is so high on it. They're not a competitor to Netflix as long as the service it tied directly to Dish subscribers.

Yep, which is why it has had issues going over .35 today. Well, the service goes live on the 1st, that will at least give the public an idea of its potential. I'm thinking (hoping) that they'll open it up to the public after a testing period.

From my arm chair CEO position, with Dish's integration with Google TV, I'm hoping they'll offer a BB app through the market place which allows all Google TV owners to use it. Granted the GTV wasn't exactly a success, but offering another medium for content is a start.

 

[jessieqwert]

next stop for NFLX? I don't care as long as it keeps dropping

 

[SunnyD]

Yep, which is why it has had issues going over .35 today. Well, the service goes live on the 1st, that will at least give the public an idea of its potential. I'm thinking (hoping) that they'll open it up to the public after a testing period.

From my arm chair CEO position, with Dish's integration with Google TV, I'm hoping they'll offer a BB app through the market place which allows all Google TV owners to use it. Granted the GTV wasn't exactly a success, but offering another medium for content is a start.

I did want to pick some up regardless when it was under $0.10... unfortunately Sharebuilder has no problem pulling up a quote for it, but says it's an invalid symbol when I try to buy. Fuckers.