Saying that you have "just 100k" worth is a huge red flag indicating that you are going to suffer a big loss, either here, of relatively soon, when the next speculation with a consensus narrative comes along. It is almost certain that you didnt find this organically. You may get lucky, but some of the all time investment loss disasters occcur in situations just like this, where layer after layer of assumpions are involved in the analysis.

Is that any different than you predicting a big move in SMRT in a week?

Good point, but I have seen many situations play out where a group of people anticipate a settlement involving a publicly traded security. We all have to guard against wishful thinking. In the case of Stein Mart, I feel that there is no speculation holding up the stock, so unless there is shocking news, it will more than likely move higher. However, I can always be overlooking the odds of a big negative announcement, and wishful thinking is tough to eliminate. We will see how each plays out, but I know for a fact that most involved in DGLY underappreciated the risk to the downside.

The investors of DGLY know its a binary play going in.

You had "layer after layer of assumptions" in your analysis of SMRT. Mind sharing with the class your former username, and the amount you have invested in SMRT?

I can't tell you anything about DGLY. I responded strictly to someone starting a thread stating right off the bat that they had "just 100K" worth of shares. There really cannot be more of a red flag than that. OP then followed up with info about speculation about a legal settlement, so I figure he has money to burn, likely hasn't had too many shocking investment losses in his life, and probably was willing to send in 100k on nothing more than a reasonable narrative he picked up from a message board or from a casual conversation.

What I am stating is that just by the wording of his post, the odds favor a huge disaster over a positive result. Now, if he had stated that nobody is following the stock, or that nobody is aware of a pending settlement, and that he had been digging for information unavailable to the masses, then that would be a different story.

There was a company named Dendreon a few years ago where a whole group of people seemingly became experts on biotech, based on a narrative that became self fulfilling, pushing the price higher until it collapsed, and the narrative was destroyed. Investors were dealt 100 percent losses.

There was a company named Elan that was bid up about a decade ago, with the same type of people becoming experts on whether a certain drug would get approval. I recall a relatively well known poker player going down in flames on that one, costing Bright Trading a few million dollars in the process. The narrative seemed so true to him that he hinted that he had inside info. Ultimately, the narrative was wrong, and he got crushed, and took other people with him.

Sometimes all you need is a bit of information to make a "more often than not" statement. For instance, if you had a daughter, and all you knew about the guy she was bringing to dinner were one of two things.....The guy either (1) Owned a State Farm insurance agency, or (2) Owned a tattoo parlor. Which guy do you want your daughter to bring home? Once in a while the guy with the tattoo parlor will be the right choice, but if you can bet on who will have the better life, you take the State Farm guy.

The odds favor a shocking surprise. I don't need to know anything else, because if this guy has 100k on it, then lots of others like him are also holding the stock up. It will end in tears much more often than high fives and victory laps.

As to my Stein Mart SMRT investment/speculation, I may indeed be making some assumptions, and there are definitely things that can lead to a lower price, but I have a decent eye for grabbing stocks after they have decimated and demoralized others, giving me a low entry price. It feels like this is the least amount of buzz Stein Mart has had in a while, and if you read every annual report for the past ten years or so, and pay attention to the condition of the company, you will see that the company is in better shape now than it was a few years ago, and even last year.....it hit 4 dollars last year....now 95 cents or so. I believe the next major move is up. We will find out within two weeks if the next move is up or down. I have 77,000 shares, though I shouldn't be talking specifics, and don't intend to mention it again.

I will say that I was fortunate to buy PCG in January at 6.90, selling a few weeks ago at 22.75. I am pleased that it is down to 18. If I am right in my SMRT analysis, it will be a nice slingshot move, though I am prepared for the dagger if I have misread the situation. I stand by my reasons for believing that I got the money in at a very good price, but even talking about it is dangerous, as I am inclined to defend the position, and that could closed my judgment. I did make a mistake three weeks ago buying RAD at 9....it went to over 11 within a week, and I believed it was going higher.....sold last week at 9, but I lost a bit because I bought more at 9.50 before it went to 11. It did go down to low 7's briefly, but has stabilized just over 8....so I made the right move.

One of the reasons I sold was that there were way too many message board pumper making wild assumptions, and I started thinking a bit much wishful thinking, so I abandoned being associated with it, as those still holding shares won't be bailed out with higher prices until most all of them give up....still might get back in this year if it goes lower.

DGLY seems like a sober analysis to me. They win the settlement or they don't. Patent lawyers in this thread give decent odds of a large settlement and high odds of a marginal one as several ducks are perfectly in a row for DLGY.

I agree with you about tracing the source of ideas. Very few people do that, but it is in fact one of the easiest ways to weed out bull**** and time wasting - in life as well as stocks. Is the source of your ideas somewhere/something reasonable? If not, throw it in the bin and forget about it.

yawn. Spirit - you wrote a lot but said basically nothing.
I'm rooting for you in SteinMart, b/c why not, but the only justification you've given is that you "feel" retail will turn around and that they've scheduled a CC during market hours. You also claim that the company is in way better position than it has been for years, but instead of giving us any facts, numbers, or theories whatsoever, you tell us you are really good buying low and you've read 10 yrs worth of annual reports. Cool. Maybe there was a fundamental reason the stock price declined 75%+ since last year? We have no idea since you haven't said anything that matters. Normally the "next leg up" doesn't follow a 75% drop.

And basing any serious decisions on "amount of message board pumpers" is just lol. Can you imagine someone having a serious fundamental opinion about a company, only to say, "yeah, but stocktwits has been really overly optimistic recently." maybe you meant something more nuanced, but you didn't say whatever you actually meant.

I disagree that the source of an idea really matters. Intelligent people should be able to form an independent opinion about a well-flushed out idea with assumptions and conclusions. However, when a person does not have the time or competency to form an opinion, knowing the source will help a person figure out if its worth his time to investigate the content further.

But hey, shout out to DNDN, the first company I ever shorted! They got bought in bankruptcy by VRX - what a match made in heaven.


Edit: P.S. You can relax, the world doesn't care that you have 77k shares. In what way is sharing that info a bad idea? You clearly aren't managing OPM.

http://www.globenewswire.com/news-re...itigation.html

DGLY gets a one-time 6m payment to settle.

WG gets license to 2 patents through 2023 without admitting guilt.

It's unclear what, if any, recurring payments will be made over the next 4 years.

CC is tomorrow during market hours.

Clearly 6m is majorly disappointing by itself. We'll see tomorrow what else there is.

I truly can't imagine how DGLY could settle for such a low amount - 6m barely covers legal expenses.

I'm also truly baffled why WG tried to file an extension with the judge to get 3 more days to work on the settlement. What's so hard about settling for 6m???

These 2 things hopefully mean the royalty rate is really good.

My reasoning on SMRT is pretty clear. The company is in better shape now than they have been in a few years, yet the market cap is the lowest it has been in many many years, save for a one month period a little over a year ago. It has the highest insider ownership of most any publicly traded retailer, and there seems to be less buzz about it now than ever before.

I look to buy after others have been demoralized and have suffered catastrophic losses. The price is wandering around in the mid 90 cent range for quite a while now, so there is a pretty strong move on the horizon. We will see if it is up or down. Notice that lots of people read my Stein Mart thread, yet hardly anyone responded, and that is a great sign, as it means that nobody cares. That is how you get a great boying opportunity. Once it starts percolating and moving up, people will care a lot more, and they will be willing to pay higher prices when the crowd is holding their hand. Similar to bitcoin, psychologically speaking. If the lowest cost average wins, you need to buy when nobody cares, after others have been crushed and defeated. That is how I like to search for buying opportunities.

But I don't plan on talking about it again or checking the thread I started. Defending the analysis will cloud my judgment. Going dark concerning SMRT, but it is capable of a big move pretty soon. We will see.

I know I'm talking to noone in the thread on this, but my gut tells me (really is hoping) the royalty rate is going to be really impressive and the PR today just mentioned the 6m upfront.

WG was supposed to do "easily 100m" of revenue this year.
10% royalty rate: 10m+/yr. = 40+6 = 46m from lawsuit
5% RR: 5m+/yr = 25 + 6 = 31m from lawsuit.

Hopefully it's a higher RR that they chose specifically to set a non-legally bindind precedent for a higher royalty rate vs AAXN as opposed to asking for more in a 1 time payment from WG.

"Given the confidentiality terms of the agreement, the companies do not expect to make further public comments about the terms of the settlement not discussed herein"

That seems a bit hopeful. This is the news released:

If it says "one time" I'd say they're misleading the market if they don't mention the ongoing. I didn't see any PR mentioning an ongoing at all. Did you?

Agreed. Nothing is explicit either way about royalties.

4 things seem clear to me there are some royalties:
1. If they really "settled" this for 6m only, they barely have made back legal fees. Since they were so optimistic on the prior CC re the amount for WG, then it would only mean they think they would lose the case. Such a move would basically be "settling" for bankruptcy given all that they owe creditors. It would make more sense to go to trial - they have nothing to lose.

2. Why would WG seek more time to work on the settlement if it was just a deal for 6m? What is so complicated about that deal that requires more than 2 weeks after filing with the courts?

3. What other aspects of the deal will they need to keep confidential if it's just straight up for 6m? (It could be this is just standard language, not a strong proof at all)

4. They were in talks with WG on the prior CC, and Ross sounded almost giddy about the amounts. WTF happened since then? Clearly there was some other money involved.

My guess is that they didn't expect to lose so much money last quarter and need a bigger war chest to take on AAXN, and thus settled with WatchGuard which is small fish to begin with.

I think the legal fees for WatchGuard were probably much less than 6m.

FWIW, I assumed in my DGLY calculation that they would settle with WatchGuard or even get nothing because the main focus should be AAXN.

I assume they will say at the very least whether or not there will be a royalty on the CC. Maybe they won't reveal the exact %, but that $ is going to show up on the quarterly reports, so I don't see why they wouldn't share their expected dollar amounts on the call.

do you still have your position? it was clear from page 1 of this thread we had different expectations re WG. I still do based on how Ross sounded on the last CC.

Yes at a cost basis of 2.50. At 2.50 I'm willing to let the entire thing play out.

mine is in the 2s as well and am doing similarly.

Looks like it took less than 12 hours from my post for the narrative to unravel, and for many assumptions to be ruled invalid. People scratching their heads wondering what went wrong. Don't worry, you have an opportunity to get even with me, as I have a decent position in SMRT, so we will see what the next two weeks brings. I believe it rallies even with ho hum results, and it will move much higher with decent or better results. The odds of surprise good news far outweighs surprise bad news.

I called DGLY and it's faulty lazy assumptions that were baked into the higher price, and I expect to be correct on SMRT very soon.

dude, start your own thread to pump your stock. oh wait, you did.
well at least agree you won't mention it again in this thread. oh wait, you did.

how much do i need to buy of steinmart for you to stop posting non DGLY related things in this thread?

whatever it takes.

Crazy , it really was just 6m. Their filings don't indicate anything about royalties.

I took off some at 3.50. I'll look to re-buy those shares at a lower price as they get closer to trial with AAXN. I just can't imagine what Ross could say on the CC that could encouraging buying after all his optimism on prior calls re WG.

Mori, do you have an opinion about whether this settlement sets a precedent for the Axon case which makes a larger settlement or a 200m+ jury award less likely? Because the street clearly is taking it that way.

It will have no effect on the outcome of the AAXN litigation.

Brutal day with the summary dismissal, down to $1.60, either a bargain or a sign of things to come depending on what the true case merits are (I'm not a patent lawyer). I wonder what morishta thinks about the odds of an appeal given this latest news:

If this is mistake by the judge then the merits haven't changed and you have a bargain...would love to see a patent lawyer hold forth on the judgment and what it means.

ouch. i exited my entire position after the WG thing. I was the guy who asked a q on the CC about why they would possibly make that deal, without any admission of guilt and no payments in any form for prior damages., and just a future licensing deal. Ross basically responded, "I don't know, we just listen to the lawyers and they thought this was a great deal for us." I exited the remaining shares that day in the 3.30s. I actually held back on the call, b/c I saw that people were selling shares as he was answering my q's and I was still in for a bunch. Looking back, that WG disaster was a huge blessing, because had they crushed the settlement, the stock could have been trading 8-10 and today the price would be just about the same at 1.6.

Regardless of any potential bargain here, there will almost definitely be further dilution to provide the liquidity necessary to appeal and go through everything after. and it certainly tells AXON to hold out until the end, which they seem inclined to do for the past several years. just a disaster for DGLY shareholders in all ways. I'm actually surprised the price action hasn't been worse today. the question seems to be how long they can stay above $1 and how long before delisting.