Who Knew What When at Universal Display?: Greenberg
CNBC Senior Stocks Commentator
Among battleground stocks, organic light-emitting diode patent holder Universal Display is one of the most contentious.
Its products are used in flat panel displays, mostly mobile, which is largely why the stock has had so many fans.
So, it was hardly welcome news on May 17 when Universal issued an 8-K saying that “the broadest claims” in some of its patents had been ruled invalid in Japan.
In its filing, Universal said it learned of one of those rulings — from the Japanese Patent Office — on May 10.
Universal’s stock, already in a tailspin after the company reported disappointing results a week earlier, slid another 10 percent or so on the patent news.
But is May 10 really when Universal first got the bad news?
Based on company disclosures — yes. On May 9, in fact, in its 10-Q, Universal said that “based on its current knowledge, Company management believes there is a substantial likelihood that the patent [in question] being challenged will be declared valid, and that all or a significant portion of its claims will be upheld. However, Company management cannot make any assurances of this result.”
Yet, according to a document filed with the Japanese Patent Office, an invalid ruling on key claims occurred on April 25, while its stock was moving toward a three-month high.
Why the discrepancy in the timing of when the company says it learned of the ruling and when the ruling appears to have occurred?
I called and emailed the company’s investor and public relations representatives multiple times in recent days. I also left voicemails for CFO Sidney Rosenblatt and CEO Steven Abramson.
So far, I have received no response.
P.S.: The company said in its 8-K that it believes the Japanese Patent Office’s decision was “erroneous” and that it intends to appeal the decision to the Japanese High Court, which on May 16 ruled against the company in its appeal of another ruling on claims on a different patent. Universal says it plans to appeal that decision to the Japanese Supreme Court. In Japan, according to Universal, patents are considered valid while they are on appeal.
Which is fine, except: It still doesn’t explain the apparent lag in disclosure.
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