Seeking Alpha
View as an RSS Feed

Paolo Gorgo  

View Paolo Gorgo's Articles BY TICKER:
  • Immersion Post-HTC Settlement: Why No Increased Guidance?
    Fri, Mar. 27 IMMR 2 Comments

    Summary

    • On Monday, Immersion Corporation announced a settlement and license agreement with HTC Corporation that avoided the start of the court case due to begin the same day.
    • HTC will pay an undisclosed amount of compensation for prior shipments and an additional undisclosed amount of compensation for a license to continue to sell devices with Basic Haptics.
    • Investors expected Immersion to take the opportunity given by this settlement to announce increased 2015 guidance - management had clearly indicated that existing guidance didn’t include any revenue from HTC.
    • Because of this lack of increased guidance, the market may be now overreacting negatively and assume that the settlement was relatively poor for Immersion.
    • We believe there are accounting reasons that kept IMMR management from increasing guidance and that investors may get a better understanding of the new deal after Q1 results.
  • Immersion Rides The Roller Coaster
    Tue, Mar. 24 IMMR Comment!

    Summary

    • Immersion investors experienced several volatile sessions in the last few weeks, as the stock moved on news and speculation linked to 2015 guidance, Apple's haptic implementation, and the HTC trial.
    • The HTC settlement should remove some uncertainties linked to the possible outcome of the court case.
    • This may be an appropriate time to summarize some of the recent events and try to read beyond the headlines and the market erratic behavior.
  • Immersion Files To Overturn The Invalidity Of 3 Patents In HTC Case
    Tue, Feb. 24 IMMR Comment!

    Summary

    • Readers beware: some boring but relevant legal staff ahead, as Immersion moved for reargument on HTC’s motion for invalidity of IMMR’s ‘720, ‘181 and ‘105 patents.
    • In his Markman ruling, the judge granted HTC’s motion for invalidity of three key IMMR patents on the basis that Immersion provided no evidence of the timing of the filing.
    • Immersion lawyers argue that the burden of proving that the ‘846 “patenting” occurred before the patent applications were filed should remain on HTC and not the opposite.
    • The declared invalidity of three patents in the HTC case has been perceived by the market as a big question mark about Immersion’s IP strength as a whole.
    • For this reason, we believe that following closely what is happening in court may be key to forecast which direction Immersion’s stock will take.
  • Immersion Vs. HTC: Which Company Is Winning In Court?
    Fri, Feb. 13 IMMR 4 Comments

    Summary

    • Immersion experienced a very volatile session on Wednesday as investors started digesting the first decisions taken in court regarding its lawsuit against HTC Corporation.
    • The judge denied HTC's summary judgment argument that it did not infringe two of Immersion's patents - a clear positive for IMMR.
    • However, the judge also invalidated three other Immersion patents involved in the lawsuit, and limited damages on one claim to post 2/2014 - a negative for IMMR.
    • We still hope that a settlement might be around the corner, and that the Markman hearing may act as a catalyst for reaching it sooner than later.
  • Telecity Group And InterXion Merge To Take Leadership In Europe
    Thu, Feb. 12 INXN, TLEIY Comment!

    Summary

    • Telecity Group Plc and InterXion have announced a non-binding all-share deal that will create a clear leader in the network-neutral European data center market.
    • The deal is expected to be earnings neutral in the first full year and earnings accretive thereafter - total synergies are estimated at £600 million ($900 million).
    • Shares in both companies rose after the merger was announced.
    • The deal is a positive for both companies, although the new combined entity will still lack a global footprint and will have to rely on partnerships to reach other markets.
  • Jamba Adds 2 Activists To Its Mix
    Tue, Jan. 20 JMBA Comment!

    Summary

    • Last week, Jamba announced that two activist investors, Engaged Capital and JCP Investment Management, were each given a seat on the company’s BoD.
    • These two investors own in excess of 10% of the company (Engaged Capital: 8.2%; JCP: 2.3%).
    • Engaged Capital had already been pushing the company to franchise most of its company-owned units, and for major cost cuts.
    • The market seemed to like the announcement, and the shares closed last Tuesday’s session up about 7%. A new 52-week high was reached.
    • As a result of this activist push, Jamba could finally unlock some of its hidden value. It’s execution time, but the stage has been clearly set.
  • Immersion's Homeland Haptic Trailer Delivers Strong Metrics
    Tue, Jan. 6 IMMR 1 Comment

    Summary

    • Courtesy of “Think with Google," some positive metrics achieved by Immersion’s Homeland haptic trailer campaign are now shared publicly.
    • According to these data, the IMMR haptic trailer gained a click-through rate 5 times above the industry average.
    • As tablets, phablets and smartphones become the new personal TV, Immersion’s content and media vertical may emerge as a positive catalyst for the company.
    • Immersion has been very quiet in the last few weeks: we believe CES 2015 will help put haptics into the spotlight.
    • Several other catalysts may be in front of the company in 1H 2015, reversing the recent share price drop following a disappointing quarter.
  • Jamba: The Good, The Bad And The Unknown
    Nov. 11, 2014 JMBA 2 Comments

    Summary

    • Jamba Q3 2014 revenues of $58.28M missed by $1M and EPS of $0.03 (on a non-GAAP basis) missed consensus by $0.28.
    • The company announced a $25M share repurchase program and reiterated its commitment to accelerate the transition to an asset-light strategy.
    • Positive numbers came from company-owned same-store sales, that grew 3.7% Y/Y, and juice sales.
    • 2015 guidance calls for G&A reductions of approximately 20% and the re-franchising of 114 company stores during 1H 2015.
    • There was some good and some more bad news in Jamba’s Q3 report, leading to a big unknown: will management execute properly on its accelerated plan to profitability?
  • Immersion Delivers A Mixed Quarter, Guidance Narrowed To The Lower End
    Nov. 5, 2014 IMMR Comment!

    Summary

    • Immersion Corporation reported Q3 2014 revenues of $12.1 million, lower than analysts’ forecast, and EPS of $0.08, beating consensus estimate of $0.07 by $0.01.
    • The company narrowed guidance for 2014 to the lower end of management’s previous forecast.
    • Immersion’s BoD increased the amount of the company’s authorized stock repurchase program by $30 million.
    • During the conference call, management spent some time explaining why Immersion’s business is at different stages in different verticals.
    • We will take some time to dig into Immersion’s numbers to put management’s commentary into the right context and try to understand if Immersion is running out of growth opportunities.
  • Immersion's Partnership With SomaTone Adds Another Piece To Its Mobile Haptic Strategy
    Editors' Pick • Oct. 26, 2014 IMMR 8 Comments

    Summary

    • Last week, Immersion Corporation announced a partnership with SomaTone Interactive, adding another piece to its strategy to “make implementing haptics easy” for content producers.
    • SomaTone is a clear leader in the casual gaming niche. The company produces sound effects, music, voice work and other audio services for video game companies.
    • The two companies have been cooperating for years. SomaTone founder, Nick Thomas, joined Immersion - a testament to the potential of the growing consumer demand for “immersification” of digital experiences.
  • Immersion Launches Touchsense Engage: Showtime's Homeland Gets Mobile Haptic Ads
    Sep. 23, 2014 IMMR 1 Comment

    Summary

    • Showtime is launching mobile ads to promote the upcoming season of Homeland which uses haptic technology.
    • This represents Immersion Corporation’s first commercial ad campaign that widely uses haptics to increase viewer attention.
    • Immersion’s first proof of concept campaigns will be key to evaluate the impact of haptics on buyer behavior - and the marketability and monetization of haptic mobile ads.
  • Update: Immersion Renews License With LG, The Stock Plunges
    Sep. 21, 2014 IMMR 6 Comments

    Summary

    • Last week Immersion Corporation announced that it had signed a new agreement with LG Electronics, covering both Basic Haptics IP and the company’s TouchSense software.
    • The news removed the uncertainty related to one of Immersion’s longer time partners in mobility - but the effect on the stock price has been negative so far.
    • Immersion re-affirmed financial guidance for fiscal year 2014, leaving it completely unchanged: the market assumed that the LG deal was signed at lower than expected rates.
  • Apple's Taptic Validates Immersion's Haptic Technology
       • Sep. 11, 2014 IMMR 12 Comments

    Summary

    • Apple finally announced its much-anticipated wearable device – the Apple watch.
    • Apple’s “most personal device ever” implements a “taptic engine” that aims to change the way people receive notifications and communicate.
    • Tactile feedback, recognizably different depending on the interaction, is a key part of the Apple watch experience.
    • We believe Apple’s taptic implementation validates Immersion’s IP and opens several opportunities to IMMR.
    • We notice a significant similitude between Apple’s “real touch” messaging and Immersion’s 2013 tactile presence solutions.
  • Immersion Named 'Cool Vendor' By Gartner Both In Automotive Electronics And Asia Pacific
    Aug. 18, 2014 IMMR 2 Comments

    Summary

    • Immersion Corporation has recently been included in Gartner’s “Cool Vendor” list in both their “Automotive Electronics, 2014” and “Asia/Pacific, 2014” research reports.
    • Gartner’s “Cool Vendors in Asia Pacific” highlights companies that “provide "cool" solutions across a variety of industries and disciplines in the region”.
    • Gartner’s suggestion: “IT leaders seeking innovation should consider how these vendors may help provide differentiation for their companies”.
    • Gartner’s “Cool Vendors in Automotive Electronics, 2014” profiles three vendors only: Immersion is selected for its “innovative technology in the areas of human-machine interface”.
    • We see this mention as a confirmation that Immersion is close to an inflection point in the automotive vertical, and expect haptics to be implemented in larger volume models.
  • Jamba Juice: System Comparable Store Sales Not Any More An Area Of Concern, The Stock Benefits
    Aug. 11, 2014 JMBA 4 Comments

    Summary

    • Jamba Juice stock climbed 11% last Tuesday, the day following Q2 2014 earnings. Share have kept positive momentum throughout the whole of last week.
    • Same-store system sales (SSS) were up 2.2%, reversing three disappointing quarters of negative to flat numbers.
    • We see an inflection point because of SSS concerns disappearing: Jamba’s margin-rich business model back in focus.
  • Immersion: Stock Down 23% After Earnings Miss, Lowered 2014 Guidance
    Aug. 3, 2014 IMMR 3 Comments

    Summary

    • Immersion Corporation’s stock price fell over 23% after the company announced lower than expected Q2 2014 numbers.
    • The market reacted to the earnings miss as if the company hit a brick wall: this may not be the case.
    • Given the company’s history of stumbling into many road bumps, we believe we could only face a longer wait before Immersion’s story finally unfolds.
    • Negotiations with LG probably the main concern for investors. We estimate a potential impact of roughly $4 million per year, or more.
  • Immersion Corporation's IP Value As An Acquisition Target
    Jul. 29, 2014 IMMR Comment!

    Summary

    • Immersion Corporation has over 1,650 issued or pending patents in the U.S. and other countries in the haptic field.
    • Several of these patents are essential to implement basic haptic effects widely used in touchscreen smartphones, as recognized by Google in its settlement with the company.
    • While we have always looked at the company for its long term potential, it may be time to evaluate if a buyout is possible and at what price.
    • Which players could mostly benefit from owning the keys to the haptic world? The answer is in the smartphone sector.
  • Update: Immersion And Huawei Enter Into Multi-Year License Agreement
       • Jul. 15, 2014 IMMR 4 Comments

    Summary

    • Last Thursday, Immersion Corporation announced that it had entered into a multi-year worldwide license agreement with Huawei, the third largest global supplier of smartphones, according to IDC.
    • This is Immersion’s first direct license with Huawei, and covers the company's haptic software, TouchSense 3000. Huawei had previously gained access to Immersion’s basic haptic through an IMMR chip partner.
    • We believe this is just the first of a serie of new Chinese licensees for Immersion. Lenovo and ZTE may follow soon.
    • The stock shot up 11% after the announcement - however, we believe the market still hasn’t properly figured out that the company has several other catalysts that may materialize.
    • In this update, we will analyze the latest two events that contributed to lifting the stock from its 2014 lows: Huawei and a speculation about iPhone 6 implementing haptic technology.
  • Immersion Q1 2014 Results: A Story Awaiting Some Catalysts
    May. 11, 2014 IMMR 8 Comments

    Summary

    • Immersion Corporation recently reported Q1 2014 results, which were basically in line with consensus.
    • Absent any unexpected news at the conference calls, the market’s reaction has been flat to negative – the stock remains in the $10 range.
    • Y/Y performance probably better than at first look once a onetime benefit in Q1 2013 is excluded.
    • PS4 a positive catalyst to Q1 2014 numbers, we estimate about $2 million in additional revenues from Sony.
    • Investors are left waiting for some catalysts that should represent a new inflection point for the company and its stock: here is a short list.
  • Microsoft Completes Nokia's Acquisition: Expect A Significant Write-Off, Mitigated By A Tax Advantage
    Apr. 28, 2014 MSFT 9 Comments

    Summary

    • Last week, Nokia officially completed the $7.5 billion sale of its handset division to Microsoft.
    • Simultaneously, Microsoft reduced Windows licensing fee to $0 for smartphones and tablet OEMs – ending a questionable “charge with equivalent in marketing support” strategy, initiated with Nokia.
    • Microsoft's Satya Nadella decision to launch a version of Office for the iPad, 52 days into his tenure as CEO, marks the transformation of Microsoft into a different company.
    • ‘Will this help push Windows?’ not a key question any more for Microsoft’s future strategies. Ballmer’s device and services strategy probably to be revisited.
    • Nokia’s acquisition soon to represent a several billion write off, but the impact may be mitigated by complex tax considerations.
  • Immersion Remains Investors' Best Choice To Benefit From Haptics Growth
    Apr. 14, 2014 IMMR 8 Comments

    Summary

    • NXP recently announced it has taken a stake in haptic feedback tech developer Senseg through a Series B funding round.
    • Most headlines described Senseg as an “Immersion competitor” in the haptic field - however, we believe that Immersion can only benefit from the success of Senseg’s solution.
    • NXP investment will “allow Senseg to develop a next-generation solution that will be small enough and inexpensive enough to penetrate the high-volume smartphone market”.
    • Senseg’s technology, usually referred to as electrostatic friction, or ESF, is an unproven technology that has attracted several headlines but must still overcome key engineering issues.
    • Immersion’s actuator agnostic IP, existing OEMs agreements, established developer support, and strong leadership in the space makes the company the best choice for investors willing to benefit from haptics growth.
  • Immersion Corporation: A Negative Market View May Turn Into A Buying Opportunity
    Mar. 17, 2014 IMMR 10 Comments

    Summary

    • Immersion Corporation is trading close to its 52 week low.
    • We believe one reason for the recent weakness is represented by a key fund exiting its position.
    • We also speculate the fund’s decision is unrelated to the company’s performance, but linked to its fundamental view of the market.
    • We remain positive over Immersion’s long term prospect and see a buying opportunity at this level, absent a market crash.
  • Jamba Juice Q4 Results: Back On Track?
    Mar. 9, 2014 JMBA 5 Comments

    Summary

    • Jamba Juice reported Q4 2013 results that were better than consensus.
    • During 2013 the company opened 52 new domestic units and 15 international store locations, all franchise-operated.
    • Franchise and other revenues increased 19.7% due to the net addition of 75 new and re-franchised domestic and international units and solid increases in CPG and JambaGO revenues.
    • After what were described as “atypical [Q3] results”, management guided for improved metrics and revenue growth that, thanks to the company’s asset-light model, should translate into strong bottom line numbers.
    • Assuming the company can properly execute on its business plan, we believe Jamba is undervalued at the moment.
  • Immersion Corporation's Story Finally Unfolding
       • Feb. 25, 2014 IMMR 3 Comments
  • Nokia's Android Strategy Leading Customers To Microsoft Services, Unlikely To Lay The Groundwork To Create Future Lumia Owners
    Feb. 24, 2014 MSFT 20 Comments
  • Our List Of Questions For Immersion Corporation
       • Feb. 18, 2014 IMMR 4 Comments
  • Galena Biopharma Issues Letter To Shareholders, And A Case Of Insider Seller's Remorse
    Feb. 18, 2014 GALE 128 Comments
  • Jamba Juice And Bruegger's Bagels Co-Branded Stores: Whose Strategy? - The Company's Or The Franchisee's
       • Feb. 14, 2014 JMBA Comment!
  • Google Dumps Moto: Microsoft's Strategy Questioned, Immersion Benefits
    Feb. 2, 2014 IMMR, LNVGY, MSFT 13 Comments
  • Mercedes-Benz Fully Endorses Haptics
    Nov. 18, 2013 IMMR 7 Comments
  • Sony To Become Immersion's Next Growth Driver
    Nov. 4, 2013 IMMR 6 Comments
  • Apple's Keynote Announcement: Selling Software Is A Thing Of The Past
    Oct. 23, 2013 MSFT 78 Comments