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Albert Podell
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Graduate of Cornell University, 1958. Graduate Fellow, Univ of Chicago 1958-60. Received Doctor of Laws degree from New York University School of Law, 1976. Have practiced litigation from 1976 until retirement in 2010. Have been an active stock investor since 1964,and active theatrical investor... More
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  • Out Of His Depth: Salzman Article On UNXL Is A One-Sided, Inept, Hatchet Job

    Avi Salzman's article in Barron's of May 13, titled "Out of Touch," is so one-sided that, were it a ship, it would tip over in even the calmest frog pond. And it is so lacking in hard news, or even correct information, that one wonders if the title is a sub-conscious confession by the author himself.

    Just look at how he slants the deck:

    1. He interviews some shorts, but not a single long.
    2. He mentions, as being in the Uni-Pixel camp, tiny Williams Financial (which few on Wall Street have heard of), but mysteriously omits the support and high ratings that UNXL has received from such big boys as Cowen and Ladenburg.
    3. He does not mention any of the 20 major institutions that have bought, and contentedly continue to hold, stock in UNXL, to the point where the institutions and insiders now own more than 60% of the outstanding shares, and are quietly trying to buy more before the stock really takes off around late June.
    4. He never mentions that just two weeks before, in the semi-annual Big Money Poll published by Barron's - yes, Avi, Barron's. Ever heard of it? -- UNXL was selected by the top money managers in the nation as one their nine favorite stocks for the year ahead. (Or perhaps, Avi, you think you know better than they do? Hey, what's in your wallet? And what you been smoking?)
    5. Avi makes it sound as if Kodak were a car-wash open to all, and fails to mention that it is constructing a multi-million-dollar, state-of-the-art, dedicated facility in Eastman Industrial Park solely and exclusively to make UniBoss in partnership with Uni-Pixel, and that this relationship is a cornerstones of Kodak's new business strategy to concentrate on printing materials on film.
    6. He dwells, at great length, on the past failure of UniPixel execs, to commercialize TMOS and fingerprint-resistant film but, hey, if you had ever seen me on my first two years on skis you never would have thought I'd one day be skiing black diamonds on Aspen and Alta. I guess Avi never heard about avoiding earlier mistakes and learning from experience. And if his article is any example, he has not.
    7. He highlights the CIT lawsuit, and tries to worry his readers about it, but he fails to mention that UNXL last week won its motion in the federal court for the eastern district of Texas to remove and remand the case to a state court in Texas, where it now could win about a million dollars in legal fees from CIT pursuant to the Texas "loser pays" statute.
    8. He quotes a sell-side analyst, who has been promoting Atmel, for the brilliant comment that he does not see any competitive advantage to UniBoss, without disclosing whether the guy has advised any of 'tutes that are long Atmel, or short UNXL and part of the group who are now $100,000,000 underwater. And he never interviews even one of the multitude of investment bankers and analysts who are long UNXL and who warmly congratulated CEO Killion on his the company's stellar achievements at the conference call on April 30. (Hey, Avi, you ever heard of a level playing field. Or being fair?)

    `Avi also gets his facts so wrong that any big-city reporter would be fired.

    • He says that UNXL has only $15.7 million in cash. Hey, Avi, what did you do with the $40 million UNXL netted from the secondary just two weeks ago? Or are you so out of touch that you are still citing the amount of cash it had on hand at the end of Q1? Guess you didn't want to let the facts interfere with your thesis?
    • He states that UNXL only has the "capacity to make 60,000 square feet a month in Texas," but either does not understand, or willfully does not want to mention, that that is just the capacity it had at the end of April. And that it is carefully and consistently being increased, according to its business plan, to 200,000 square feet per month by the end of June, to 700,000 square feet capacity by the end of September, to one million square feet a month by end the year, all in Texas.
    • He does mention that UNXL claims that UniBoss is "cheaper and more responsive" than competing products, be he fails to mention that it is also less brittle, much thinner, far more flexible, less breakable, more conductive, uses less power, can run on smaller batteries, does not need to rely on China for supplies of rare-earth indium, has no graphic lag time, can be scaled up to home-movie-screen sizes, and that it scales up at an arithmetical cost, not a geometric one like the competing ITO crap. Oh well, maybe Avi had space limitations. In addition to his other limitations.
    • He does mention that one of UNXL's scientists holds a lot of patents, but he only mentions the ones he has yet to commercialize. And he tries to paint a negative picture of UNXL by dwelling on another exec, who has not worked at UNXL for four years, who believed that the earth was flat, or that the White Sox would win the Series, or some other wild thing.
    • But Avi fails to mention that Robert Berg, who is widely regarded as one of the top people in the field, came aboard the Pixie Express as its VP for global sales in February, and that Robert Rusenko, a rock star super stud when it comes to running complex production lines, joined a few weeks ago as VP for manufacturing. And if Avi had mentioned them, he doubtless would have opined that they both blindly jumped aboard without thoroughly checking it out first, Same with Dell, of course. And Intel. And Texas Instruments. And Kodak. Can he genuinely believe that all these highly successful leaders of American electronic technology failed to send their engineers over to the Uni-Pixel facility to check it thoroughly, and work for weeks with the UNXL technical staff, to satisfy themselves that the Pixie can deliver. Hey, Avi, dear, you ever hear of what psychologists call " projection?" It means you wrongly accuse others or doing what you are really doing yourself. How much due diligence did you do on this article, son?

    Avi's next major journalistic coup is to state the obvious as if it were his Eureka moment. He lambastes UNXL for having had only loses in the past five years. Gee whiz, Avi, you never heard of a development-stage company before? Maybe you know some that made money from Day One? Maybe you could tell us about those. Now that would be a story worth writing. But we won't hold our breath.

    • Then he paints a frightening picture of UNXL entering a "crowded" marketplace. Well, Avi, the marketplace is crowded because this is a hot area, perhaps the hottest in all of technology right now. And -- since you apparently do not invest - let me explain that that means there is money to be made. Billions! Many, many billions! That frighten you?
    • Next Avi frets that UNXL will have to "compete against more experienced players." Well, Avi, you ever heard of Goliath? You ever notice how a startup called Amazon licked butt and devastated Barnes & Noble and Borders and Sears and Montgomery-Ward. Montgomery who? Or how Yahoo News and the Huffington Post have stolen readers from the big daily print papers? Or how Dell and Apple doomed giant Digital Equipment and the IBM PC and Atari and Compaq? Or how what were once itty bitty biotechs. now world- renowned as Genetech and Amgen and Celgene and Gilead and Biogen wiped the floor with big pharmas like now-extinct Upjohn and Parke-Davis? Or how, back when every drug company was desperately searching for a cure for HIV infection - talk about a crowded and competitive field! - little Protein Design Labs and Vertex, wielding a new concept called rational drug design, were first to market, while the big boys were still following their old ways and looking for a promising fungus on Japanese golf courses? It is called having a disruptive technology, Avi. Ever heard the term? What rock you been living under, lad? Oh, the same one where you met all those shorts who begged you to write your little hatchet job because, as they confessed to you, they were "getting their heads ripped off."

    Also, Avi, didn't you ever in your life fight somebody more experienced than you and win? Oh, you never tried. You say, your mother wouldn't't let you? Well, bud, that explains a lot. Sorry I asked.

    Last, Avi, and I don't know if this fits within your skill sets, but did you ever run the numbers before you opined that the Pixie will not be able to deliver in commercial quantity? Let's do the math. I'll make it easy for you. Let's take Killion's stated goal of a million square feet a month of product by the end of December. A square foot is one unit, and the line is about a foot wide. Out in Lufkin they gonna be working two shifts a day, figure seven hours a shift with an hour out for barbecue and chili dogs, or 14 hours a day, say 20 days a month, comes to 280 hours of running time a month. You still with me, Avi? Hate to lose you in this higher math. So 280 hours multiplied by 60 minutes in an hour - you were aware that there are 60 minutes in an hour, right Avi? -- multiplied by 60 seconds in a minute, gives us 1,008,000 seconds of operation a month, or a full second available to push out each foot of UniBoss to achieve the goal of one million. I'm sure you did not do the research. Avi, but are you aware that the plating/printing machines used by the Pixie, can run at dozens of feet per second, turning out dozens of units a second? And that UNXL ordered another set of machines months ago? And did you really think that Kodak would risk the wreck of its reputation, as it emerges from bankruptcy as a totally transformed company, by signing a deal to produce ten million units a month for UNXL if they did not know they could do it?

    And those 120,000,000 million yearly units that will start rolling out of Rochester by late fall, as Kodak commences full ramping up, have buyers eager to pay $20 each for them. Which comes to $2.4 billion a year. Lop off 20% for defects, give away a generous half the production to Kodak, and UNXL is left with a billion bucks a year gross revenue, worst case. Divide that by the 15 million shares issued by 2015, and UNXL earns $66.66 a share for calendar year 2015. Chop that in half to cover S&A, G&A, depreciation, taxes, and cost of materials, and more barbecue for the employees, and you got $33.33 a share in solid fully diluted GAPP earnings. Give that a multiple of 40, which is conservative for an amazing growth stock like this, and you got a stock worth $1,333 a share. Oh, what the hell, cut it all in half again, and you still get a value of $666 per share in 32 months. Maybe now, Avi, dear, you understand why those shorts are getting their heads ripped off.

    And it's so kind of you to try to rescue them with your slanted article. But you'd probably be of more help to them as a blood donor. Don't worry, Avi, the Red Cross only wants to know if you have any communicable diseases; they won't ask any embarrassing questions about your competency as a journalist. Oh, I guess neither did Barron's.

    Disclosure: I am long UNXL.

    May 11 11:14 PM | Link | 32 Comments
  • UNXL Shorts: Ask Not For Whom The Bell Tolls. It Tolls For Thee.

    Two developments this week are a harbinger of the forthcoming demise of the shorts who have infested UNXL and thwarted its natural rise by their lying and spreading terror on the message boards and other outlets, and by their marking the close, painting the tape, and resorting to naked snorting to bash the stok price, until the point where they have built up a short position that exceeds the entire float and more than 50% of the issued shares. Their days are numbered and, one might say, short.

    The first development is the severe drying up of the float that began last week, shortly after the successful secondary offering, as institutions have kept the price low and gobbled up all the shares they could at the bargain-basement price of $34, until the point where the combined institutional/inside holdings now constitute more than 60% of all shares, quite amazing for a little stock that just had its first profitable quarter. I expect the 'tutes to continue to enhance their positions until shortly before the close of the current reporting period, when they will take their foot off the brakes and let the rocket rise.

    The second ominous development for the shorts is the huge decrease in the average daily trading volume, down a whopping 70% or more from the torrid average of 1,465,000 shares in March and early April, to under 400,000 avg the past seven days. What this means is that the shorts, who could have (in theory) completely covered in March in just 3.3 days, now need a gut-wrenching, sleep-killing, hysteria-inducing ten full trading days or more to cover as they all simultaneously rush to squeeze through the narrow fire exits.

    The ShortSqueeze Rating on UNXL remains at 10,000, the highest of any stock in history, even though the purveyor of that Index has yet to adjust its computations to recognize the recently reduced daily trading volume, which will more than double the pressure and the panic.

    Despite their continuing rabid rantings and threatening terror tactics on the message boards, I have found hard evidence that they have finally realized their mistake in going and staying short UNXL and are starting to cover: 1) Short interest dropped by 234,000 shares between the reporting dates of April 15 and April 30, 2) UNXL no longer makes the Daily Naked Shorts Sales List, 3) UNXL is no longer on the SEC's Reg SHO watch-list that notes those stocks for which sellers have failed to deliver shares by the closing date, and 4) the amount of short selling as a percentage of daily volume has dropped to 17% from an earlier range of 30-50%.

    But this quiet retreat is all too little and too late for the shorts, still 4,168,000 shares in the hole (out of 11 million shares issue) and approximately $100,000,000 under water. It reminds me of a pretty spring day in Japan when, from atop a cliff, I witnessed a tsunami. All the water quietly withdrew from the bay, and all was calm for a while, and then in roared the biggest, most gigantic wave you could ever imagine, crushing and destroying everything in its path. It will hit the UNXL shorts before June 21. R.I.P. Less

    Disclosure: I am long UNXL.

    May 10 3:36 PM | Link | 7 Comments
  • UNXL "Smoking Gun" Did Not Iinjure Anyone

    In his Instablog Post here on May 8, titled "CIT v UniPixel: The Smoking Gun!" Ivan Jiminez, a persistent basher of Uni-Pixel, reveals a woeful ignorance of the law as it is applied in the United States and England.

    Mr. Jiminez begins by stating that "This case is about a non-disclosure agreement, not about UniBoss or UniPixel's current process. CIT presented evidence of Uni-Pixel's breach of its agreement." Once he has embarked on that route, he is dead in the water, as I will show.

    The thrust of his argument is that, "In its patent request Uni-Pixel disclosed multiple of CIT's core technologies," which he goes on to enumerate.

    He concludes his screed with: "The fact that Uni-Pixel is or is not currently using the technologies is irrelevant. The fact is that UniPixel disclosed those core technologies in a patent request and that's the smoking gun."

    The fatal flaw in his argument is that the discharge of that smoking gun never injured anyone.

    Even if we give Mr. Jiminez the benefit of the doubt and assume that every fact he states is true, his argument is not worth a bucket of warm spit. Because this self-described "aircraft mechanic by trade" clearly does not know squat about how the law operates.

    It is a classic axiom of the law, drilled into the skulls of every first-year law student for the past several hundred years, that "A tort or a breach, in the air, does not lie." What this basic legal tenet means is that unless the alleged tort or breach results in damage to the plaintiff, it is not actionable; it fails to state a claim upon which a court can grant relief; it is legally defective and readily dismissible.

    In torts, the classic example is the miscreant who throws a brick off the roof onto a crowded street (akin to the actions of many of the vociferously nasty shorts on the UNXL message boards). He is certainly a bad boy, and not the kind of chap you'd want to marry your sister, but unless his brick actually hits and injures someone, or causes harm to someone in its impact zone, it is not an actionable event. A tort in the air simply does not lie.

    Similarly, in contract law, the over-riding principle is that the breach of the contract is only the first step in the prima facie complaint; unless the plaintiff can credibly plead (and later prove) some monetary damage resulting from the breach, his complaint fails to state a claim upon which relief can be granted and the action can be dismissed.

    In the CIT case, even if UniPixel did disclose some information it learned during the term of, and as a result of, the non-disclosure agreement by which it had consented to be bound, there is no damage resulting from said breach, and consequently no legally cognizable claim by CIT.

    There is no damage, in the first instance, because most of the information UNXL is alleged to have disclosed was fully available to the entire world in the patent applications filed by CIT itself. CIT can not sue UNXL for disclosing what CIT had already disclosed. Moreover, and of crucial and dispositive consequence, there is no damage resulting to CIT from the alleged disclosure because CIT was not shot, or even grazed, by the smoking gun. No one in the world who heard or read what Uni-Pixel disclosed in its own patent request acted upon that information to the detriment of CIT. Neither Microsoft, nor Intel, nor Walt Disney, nor HerbaLife, or any other entity in the world, is alleged to have taken that information and used it to make a product or process that harmed CIT or competed with it.

    In the Western world, our entire concept of contractual jurisprudence is based, not on punishing or imposing a penalty on an alleged offender, but on providing compensatory relief, in the form of monetary damages, to the aggrieved party. Therefore, even if Uni-Pixel did disclose some information it learned during the NDA term, there is no legal punishment for doing so in the absence of damage caused by that disclosure. Accordingly, Mr. Jiminez's argument falls of its own weight

    Since I have picked on Mr. Jiminez for lacking legal credentials, let me briefly state mine. I hold a Doctor of Laws degree from the NYU School of Law, one of the top five law school in the country, and I was, until I retired three years ago, a member in good standing of the bar of the State of New York; the federal district courts for the Eastern and Southern Districts of New York; the United States Courts of Appeals for the First and the Second Circuits, and the Federal Circuit,the special court handling cases involving intellectual property; and the Supreme Court of the Unite States. Among the leading cases on which I worked is Universal Pictures v. Sony, in which I was part of the Sony legal team, winning a landmark case that allowed the Betamax (and its later incarnations in the VCR and the DVD player) to be sold in the U.S. against the misguided attempt by the motion picture companies to prohibit their sale. In 32 years of practicing litigation, I never lost a jury trial and, by God, I would not lose this case, because CIT is not able to prove, by a preponderance of the evidence, a clear connection between any actions of Uni-Pixel and CIT sustaining damages.

    I respectfully submit that Mr. Jiminez cease trying to offer legal opinions, for which he is totally untrained and recklessly incompetent, and stick to repairing landing struts.

    Disclosure: I am long UNXL.

    Tags: UNXL, long ideas
    May 09 4:07 AM | Link | 12 Comments
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