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The GeoTeam

 
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  • Audience Trading At Cash Value [View article]
    Nitin, Selling the company would be the most compelling scenario from a long view. But we were correct to short the stock when we did. Aside from hanging your hat on a takeover I still see risk in this name. ADNC thought their relationship with AAPL was strong, until it was not. Have you looked at the company's margin history? Without, licensing revenue they are a pure commodity play.

    Congrats on your buy at the lows.
    Nov 1, 2012. 05:55 PM | Likes Like |Link to Comment
  • Audience Trading At Cash Value [View article]
    Our Premium members got this update in our 10/11/2012 email alert:
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    We have covered our short position in ADNC (@ $5.66). Please see our original alert made available to members on 9/10/2012 (9/11 at SA - http://bit.ly/Rxh2AA). Although we believe the stock should go lower, it is the opinion of many investors that ADNC will hold its cash value per share of $5.50. We do not totally subscribe to this logic but we do respect it and will look to re-short on any bounce from these levels. The stock was trading at $7.19 at the time or our original report.
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    So no, we are not getting killed.
    Nov 1, 2012. 11:09 AM | Likes Like |Link to Comment
  • Audience Trading At Cash Value [View article]
    Might have to re-short soon, if the stock continues to rise. This EPS number is all in the past and includes AAPL contribution. Future EPS deterioration and margin volatility will now show its head and reveal that ADNC is nothing but a commodity company. The only thing that is compelling is if it ever becomes a take over target. But we know it will not be AAPL.
    Oct 28, 2012. 09:23 AM | Likes Like |Link to Comment
  • Audience Trading At Cash Value [View article]

    Charles,

    I think you are really missing some aspects of the ADNC story:

    1. You need to perform some homework on the operational model that ADNC is not left with. The company is now just a pure commodity driven business where margins are not secure. Just go back and read the IPO prospectus and you will see how margins have come crashing down in there non-licensing AAPL business (Hardware sales). Furthermore, revenue growth for hardware sales has flattened out. Also, take a look at analysts 2013 EPS estimates which stands at a dismal $0.13. P/E of 15 = $1.95

    2. Why did AAPL abandon ADNC's "superior" technology?

    3. Two litigation issues

    4. Cash per share takes a back seat if the company has to fight a patent infringement suit or sees its cash flow diminish.

    5. They basically have one customer left. You want to roll those dice?

    The stock should trade somewhere between its $1.95 and some discount to its cash per share of $5.50.

    The risk factors in the filings really meant something for this company.
    Oct 3, 2012. 08:57 AM | Likes Like |Link to Comment
  • Patent Infringement Lawsuit Looms Over Audience [View article]
    Here are our responses to your reply, but the long and short of these new developments is that ADNC is left with a commodity driven business where margins will get squeezed. Analysts have already lowered 2013 EPS estimates by 75%. You also realize that the July 3 suit is the second suit involving ADNC this year.

    Reply to points 1, 2 and 3
    Why does it not make sense that AAPL would not muddle with a smaller company? Quite the contrary, it makes more sense for a larger firm to steal the technology of a smaller company that has limited resources to fight back. Why is not plausible to believe that AAPL shared some of NF’s technology with ADNC?

    Reply to points 4, 5 and 6
    Don’t forget that ANDC is also involved in another patent suit unrelated to this one. We do not know the implications of this issue on its other customers. Why are we wrong to say that “APPL's move could imply that its legal team found some merit in the patent infringement suit?” In your response to you say “Apple move COULD be because….” so it could be that the legal team took a look at this issue or it could be that AAPL found a better technology? Which one is it.. Regardless, either scenario is not good.

    Reply to point 7
    Really? And how does this fare for ADNC, that AAPL is ditching ADNC after 6 months of a licensing amendment agreement. You are basically saying that ADNC might be facing formidable competition. Will other customers see this too?

    Reply to point 8
    Show us where the company said that the Lawsuit is no big deal. On the contrary, they say they do not have enough details to render an opinion. Also, notice that ADNC shares underwent a sharp dip in August for a few days. Someone knew what was going on.

    Lastly, we have no reply to point 9 as this one and is really irrelevant.
    Sep 12, 2012. 10:25 AM | Likes Like |Link to Comment
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