Helios and Matheson jumps as MoviePass exceeds estimates

Helios and Matheson jumps as MoviePass tops 1M subscribers 

Helios and Matheson jumps as MoviePass exceeds initial projections

Shares of Helios and Matheson (HMNY) jumped in afternoon trading after the company said its MoviePass theater subscription services surpassed 1M paying monthly subscribers this month.

MOVIEPASS EXCEEDS 1M MONTHLY SUBSCRIBERS

Helios and Matheson, a majority owner of MoviePass, said this morning that the subscriber base for the movie theater subscription service surpassed 1M paying monthly subscribers, compared to more than 600,000 as of October 18 and approximately 20,000 as of August 14, the day before MoviePass announced its new $9.95 per month subscription price.

In a statement, the company said MoviePass has increased its subscriber base by over 6,500% since the introduction of the $9.95 per month pricing model.

MoviePass shifted to the lower price subscription model on August 15, and noted today that it has reached the 1M subscriber mark in less time than Netflix (NFLX) or Hulu (DIS, CMCSA, CMCSK, FOX, FOXA).

MoviePass CEO Mitch Lowe said:

“Our focus on creating the best movie theater subscription service experience for our subscribers has propelled our growth to date. We believe that growth will continue as we further develop our application, improve customer service, enhance exhibitor relations and fill movie theater seats for incredible films to be released in the future.”

WHAT’S NOTABLE

Helios and Matheson announced plans in November to raise its stake in MoviePass from the 53.71% it held in October. After MoviePass dropped its subscription price to $9.95, analysts predicted the service would hit 1M subscribers by the end of the year.

In October, MoviePass said its continued growth trajectory “exceeded MoviePass’ initial projections, and now MoviePass projects that it will acquire at least 3.1 million additional paying subscribers through August 18, 2018, exceeding its previous estimate of 2.5 million subscribers.

“Earlier this month, MoviePass and streaming service Fandor partnered with Costco (COST) to offer a one-year subscription plan for a flat fee of $89.99.

CITRON CAUTIOUS

Citron Research has expressed cautious comments on Helios and Matheson, saying in October that the stock will “trade back to $20…You might like product but $1+bill it isn’t. Giving away $1 for .90 no biz.” Helios and Matheson has also been mentioned cautiously by TheStreetSweeper.

PRICE ACTION

Shares of Helios and Matheson are up about 5% in Wednesday’s trading to $6.51.


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Vipshop gets $863 million cash infusion

Vipshop receives $863M from Tencent and JD

Vips receives $863M investment. Stockwinners.com
Vips receives $863M investment.

Tencent, JD.com, Vipshop announce investment, business cooperation – Tencent Holdings (TCEHY), JD.com (JD), and Vipshop (VIPS) jointly announced that Tencent and JD.com have entered into definitive agreements with Vipshop, such that Tencent and JD.com will invest an aggregate amount of approximately $863M in cash in Vipshop at the closing of the transaction.

Pursuant to the share subscription agreement, Tencent and JD.com will subscribe for newly issued Class A ordinary shares of Vipshop in the amount of approximately $604M and approximately $259M, respectively.

The purchase price will be $65.40 per Class A ordinary share, which is equivalent to $13.08 per American Depositary Share of Vipshop, five of which represent one Class A ordinary share.

The purchase price represents a 55% premium over the closing price of the ADSs as of the last trading day on December 15.

The transaction is expected to close in the near future, subject to customary closing conditions. Upon the closing, Tencent and JD.com will beneficially own, taking into account any existing holding, approximately 7% and 5.5%, respectively, of Vipshop’s total issued shares.

The Class A ordinary shares issued to Tencent and JD.com will be subject to a two-year lock up restriction. Tencent and JD.com will have the right to appoint a director and an observer, respectively, to Vipshop’s board of directors during the two-year lockup period.

After the end of the lock-up period, for so long as Tencent and JD.com hold approximately 12% and 8%, respectively, of Vipshop’s total issued shares, or otherwise by mutual agreement with Vipshop, they will maintain director and board observer rights.

Concurrently with the entry of the share subscription agreement, Tencent and JD.com have entered into business cooperation agreements with Vipshop, effective upon closing, establishing a cooperative relationship among Tencent, JD.com and Vipshop.

Under these agreements, Tencent will grant Vipshop an entry on the interface of Weixin Wallet enabling Vipshop to utilize traffic from Tencent’s Weixin platform, and JD.com will grant Vipshop entries on both the main page of JD.com’s mobile application and the main page of its Weixin Discovery shopping entry, and will assist Vipshop in achieving certain GMV targets through JD.com’s platform.

VIPS closed at $8.44. It last traded at $12.48.


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Barron’s is bullish on Alaska Air

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:  

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH  MENTIONS

Alaska air should bounce back in 2018 – While shares of Alaska Air (ALK) are down over 20% this year, they should get back up in 2018, Strauss writes in this week’s edition of Barron’s. With a lower valuation and a better dividend yield than many rivals, the company should rise after if fully integrates Virgin Air, which already is adding to earnings, he notes.

CBOE should not be treated as ‘set and forget’  – Bitcoin futures have pushed CBOE’s (CBOE) stock to a new record high, and some see the stock as a way to benefit from investors fascination with Bitcoin, Steven Sears writes in this week’s edition of Barron’s. However, Sears is recommending that investors no longer treat the shares as a “set and forget” position until it is clearer how the Bitcoin ecosystem will influence CBOE.

Spark Therapeutics selloff may be overdone – Spark Therapeutics (ONCE) shares plunged after the company released disappointing results for its hemophilia A treatment, but the selloff may be overdone given the company’s other promising treatments, Andrew Bary writes in this week’s edition of Barron’s.

More consolidation to come after Disney/Fox deal – Netflix (NFLX) success and its high valuation is forcing the rest of the TV work to scramble, Alex Eule writes in this week’s edition of Barron’s. In the wake of Disney’s (DIS) 21st Century Fox (FOXA; FOX) purchase, investors should expect more consolidation to come, he adds. Given that FOX RSN business looks very similar to MSG Networks (MSGN) and with Disney’s deal spurring a new wave of RSN interest, 208 could be the year that MSG gets sold, Barron’s says. Other potential attractive targets include AMC (AMCX) and Viacom (VIAB), Eule contends.

BEARISH  MENTIONS

Exxon (XOM) disclosure of climate-change regulation impact has risks – In a filing with the Securities and Exchange Commission, Exxon’s board acceded to a proxy request to disclose more about what tightening climate-change regulations may do to the long-term value of its hydrocarbon assets in the ground, Vito Racanelli writes in this week’s edition of Barron’s. Once Exxon discloses this information, companies that do not will be under pressure, he notes, adding that while more disclosure as a rule is good for shareholders, there are risks as it could hurt its competitive position and the ability to sell assets at a fair price.

New Apple iPhone features also bring software bugs – While each new Apple iPhone (AAPL) brings more “dazzling” features, it also brings a rising number of software bugs, Tiernan Ray writes in this week’s edition of Barron’s. Apple has little choice but to keep adding features to stay ahead of the pack, and one large cost is having to divert engineers to fix bugs, he adds.


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Tiffany seen as a take-over target

Tiffany seen as possible target for big European luxury player

Tiffany seen as a take over target. Stockwinners.com
Tiffany seen as a take over target

Shares of Tiffany (TIF) are on the rise after Citi analyst Paul #Lejuez upgraded the stock to Buy, citing currency tailwinds, tax reform and the increasing probability the jewelry retailer becomes a takeover target of an European luxury conglomerate.

BUY TIFFANY

In a research note to investors, Citi’s Lejuez upgraded Tiffany to Buy from Neutral and raised his price target on the shares to $115 from $92.

The third quarter brought several positive inflection points, he contended, noting that it was the first quarter in several years that the company saw strength in both the fashion category and the high/fine/solitaire category at the same time.

Further, Lejuez argued that the shares look attractive as currency tailwinds and tax reform should benefit the company’s earnings.

The analyst also told investors that he sees increasing probability that the jewelry retailer will become a target of an European luxury conglomerate, making Tiffany’s risk/reward that much more favorable.

Management seems to understand the challenges and opportunities and they are not sitting still, he pointed out, making the analyst more optimistic that the changes he has seen thus far have Tiffany on a better path for success.

WHAT’S NOTABLE

Earlier in the month, KeyBanc analyst Edward #Yruma also upgraded Tiffany to Overweight from Sector Weight, with a $115 price target, saying he believes the positive 1% Americas comparable sales growth in the third quarter points to the early stages of a more broad-based sales recovery.

Recent strength in silver jewelry is now being augmented by early signs of improvement in higher-end jewelry, Yruma argued, adding that he views Tiffany as a “strong brand.”

PRICE ACTION

In Thursday’s trading, shares of Tiffany have gained over 3% to $99.27.


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Disney goes shopping

Disney to acquire 21st Century Fox after spinoff of certain units for $52.4B

Disney to acquire 21st Century Fox for $52.4B

The Walt Disney Company (DIS) and Twenty-First Century Fox, Inc. (FOXA, FOX) announced that they have entered into a definitive agreement for Disney to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses, for approximately $52.4B in stock.

Building on Disney’s commitment to deliver the highest quality branded entertainment, the acquisition of these complementary assets would allow Disney to create more appealing content, build more direct relationships with consumers around the world and deliver a more compelling entertainment experience to consumers wherever and however they choose.

Immediately prior to the acquisition, 21st Century Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.

Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share they hold.

The exchange ratio was set based on a 30-day volume weighted average price of Disney stock. Disney will also assume approximately $13.7B of net debt of 21st Century Fox.

The acquisition price implies a total equity value of approximately $52.4B and a total transaction value of approximately $66.1B which includes consolidated assets along with a number of equity investments.

SKY NEWS

Prior to the close of the transaction, it is anticipated that 21st Century Fox (FOX, FOXA) will seek to complete its planned acquisition of the 61% of Sky (SKYAY) it doesn’t already own. 21st Century Fox remains fully committed to completing the current Sky offer and anticipates that, subject to the necessary regulatory consents, the transaction will close by June 30, 2018.

Assuming 21st Century Fox completes its acquisition of Sky prior to closing of the transaction, The Walt Disney Company (DIS) would assume full ownership of Sky.

DIS closed at $107.61. FOX closed at $32.34.


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T-Mobile to launch TV service

T-Mobile acquires TV tech company Layer3 TV, launch new TV service

T-Mobile to Launch TV Service - Stockwinners
T-Mobile to Launch TV Service
T-Mobile (TMUS) US resident and CEO John Legere unveiled the next phase in the Un-carrier’s mobile video strategy, announcing plans to launch a disruptive new TV service in 2018.

To fuel that, Legere also announced the Un-carrier has signed a definitive agreement to acquire TV technology innovator Layer3 TV, Inc. and will work with Layer3 TV’s leading technology and talent to create T-Mobile’s new TV service.

People love their TV, but they hate their TV providers. And worse, they have no real choice but to simply take it – the crappy customer service, clunky technology and outrageous bills loaded with fees! That’s where we come in. We’re gonna fix the pain points and bring real choice to consumers across the country,” said John Legere, president and CEO of T-Mobile.

“It only makes sense for the Un-carrier to do to TV what we’re doing to wireless: change it for good! Personally, I can’t wait to start fighting for consumers here!”

T-Mobile added: “Currently, Layer3 TV delivers a product that seamlessly integrates the best of television, streaming online video content and social media and is available in five cities across the US. With Layer3 TV’s leading technology and talented team, T-Mobile plans to launch its own disruptive new TV service next year, tapping into the amazing content available from creators today to disrupt legacy cable and satellite TV’s distribution model.

The Un-carrier’s new TV service will take full advantage of T-Mobile’s nationwide retail presence, top-rated brand and award-winning sales and customer care organizations.”

Legere also said that services like Netflix (NFLX) are “absolutely booming.” Says TV service plans part of long-term Un-carrier strategy for video and mobile entertainment. Says legacy TV model “utterly broken,” looks like wireless from a few years ago. Legere expects the Layer3 deal to close in the next few weeks.

TMUS is up 82 cents to $64.30.


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Barron’s is bullish on Salesforce.com

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH  MENTIONS

Johnson & Johnson (JNJ) could rise further – In a follow-up story, Barron’s notes that Johnson & Johnson’s shares had a blockbuster year, as concerns about its big rheumatoid-arthritis drug Remicade proved too pessimistic, but shares could rise almost 20% as investors view the company’s drug pipeline in a new light.

Companies trading mostly in U.S. to benefit from tax reform – Investors in companies that trade mostly in the U.S. such as Southwest Airlines (LUV) should benefit greatly from what is arguably the signature provision of the tax reform bill, namely a drop in the federal corporate tax rate, John Kimelman writes in this week’s edition of Barron’s. Tech giants such as Apple (AAPL), Microsoft (MSFT) and Alphabet (GOOG; GOOGL) should experience a huge windfall from the legislation’s provision that could set the rate on the taxes of foreign earnings held in cash as low as 10%, thus encouraging repatriation, he says.

Transfer Partners situation to be resolved by 2019/2020 – Master limited partnerships have been dogged for the past several years by investor concerns, with Energy Transfer Partners (ETP) being one of the worst-performing large MLPs, Andrew Bary writes in this week’s edition of Barron’s. Its unit price has tumbled since the merger with Sunoco Logistics, even as the units of its sister company, Energy Transfer Equity (ETE) have held steady, he adds. The endgame probably will be a merger of the two companies, or an equity buyout of the IDRs by Energy Transfer Partners, Barron’s contends.

Start-ups dwelling in tech giants shadow – Tech giants such as Amazon (AMZN), Alphabet (GOOG; GOOGL) and Apple (AAPL) show no signs of slowing down, increasingly calling the shots in tech in a way that limits the scope within which small companies operate, Tiernan Ray writes in this week’s edition of Barron’s. While many start-ups show promise but “dwell in the shadow of the giants,” he adds. Commenting on recent IPOs, Barron’s notes that while Appian (APPN) and Roku (ROKU) have surged 39% and $85% respectively, cloud-computing darlings Mulesoft (MULE) and Tintri (TNTR) are down since their debuts.

Wall Street about to join in Bitcoin fun – Bitcoin shot past $11,000 last week but slid sharply right after before surging yet again, Avi Salzman writes in this week’s edition of Barron’s. Now Wall Street is about to join in the fun, he notes, adding that getting listed on some of the largest exchanges in the country is a “tectonic shift for Bitcoin.” Banks like Goldman Sachs (GS) are considering helping clients execute Bitcoin trades, and once “they dip their toes in,” there may be no turning back, Salzman contends.

 Salesforce.com has 25% upside – As Salesforce (CRM) launches new products, its “addressable market” expands, which means more opportunities for sales and potentially wider margins, Jack Hough writes in this week’s edition of Barron’s. The company’s shares should continue to outperform as revenue rises and margins improve, and a 25% increase in 2018 to $130 seems achievable, he adds.


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Chipotle to name a new CEO

Chipotle forms search committee to identify new CEO

Chipotle Mexican Grill spokesman Chris Arnold says the company is aware of a "small number" of illnesses linked to a store in Sterling, Virginia
Stocks to Avoid, Stocks to short, Put Options, Stocks to Watch

Chipotle Mexican Grill  (CMG) announced that Steve Ells, chairman and CEO — and the founder of the company in 1993 — will become executive chairman following the completion of a search to identify a new CEO.

The Board has formed a search committee comprised of Directors Robin Hickenlooper and Ali Namvar, as well as Ells, to identify a new leader with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.

Ells said, “Simply put, we need to execute better to ensure our future success.

The Board and I are committed to bringing in an experienced leader with a passion for driving excellence across every aspect of our business, including the customer experience, operations, marketing, technology, food safety, and training.

Bringing in a new CEO is the right thing to do for all our stakeholders. It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food. It will ultimately improve our ability to provide our guests with delicious food that is prepared with high quality ingredients that are raised responsibly and served in a way that is accessible to everyone. I am confident that this will allow us to deliver value for our shareholders, and provide rewarding opportunities for our employees. Chipotle has vast unrealized potential.

As we work hard to restore our brand, I believe we can capitalize on opportunities, including in areas such as the digital experience, menu innovation, delivery, catering, and domestic and international expansion, to deliver significant growth.”

ANALYST COMMENTS

Chipotle CEO change to be welcomed by investors, says SunTrust – After Chipotle announced it has started a search to identify a new CEO and that founder Steve Ells will become executive chairman when one is identified, SunTrust analyst Jake Bartlett said he views the news as positive for both the company’s turnaround efforts and the stock as he expects investors to welcome a CEO with a proven operational track record. Bartlett has a Buy rating and $355 price target on Chipotle shares.

William Blair downgraded the stock to Market Perform from Outperform. William Blair analyst Sharon Zackfia downgraded Chipotle Mexican Grill to Market Perform . While a new leader may accelerate the company’s turnaround longer term, today’s move likely signals that Chipotle’s trends remain under pressure and creates more near-term uncertainty, Zackfia tells investors in a research note. The analyst adds that transition years, in which costs accelerate before sales trends rebound, often follow new CEOs. As such, she’s more cautious on Chipotle’s earnings recovery trajectory following today’s announcement. The market, on the other hand, is applauding the company’s decision.

CMG closed at $285.86. It last traded at $300 in pre-market action.


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Bazaarvoice sold for $521 million

Bazaarvoice to be acquired by Marlin Equity Partners 

Bazaarvoice (BV) announced that it has entered into a definitive agreement to be acquired by entities affiliated with the global investment firm, Marlin Equity Partners.

Under the terms of the agreement, Marlin will acquire each share of outstanding common stock of Bazaarvoice in exchange for $5.50 in cash for a total value of approximately $521M.

This price represents an 18% premium to the average closing price of Bazaarvoice common stock for the 30-calendar day period ending November 24, 2017.

Upon completion of the transaction, Bazaarvoice will become a privately-held company.

Bazaarvoice will maintain its headquarters in Austin, Texas.

The closing of the transaction is subject to customary closing conditions, including regulatory approvals and the affirmative vote by a majority of the votes cast by the holders of Bazaarvoice common stock at a to-be-scheduled special meeting of stockholders.

The transaction is expected to close in the first quarter of calendar 2018.

BV closed at $4.80.


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Meredith to buy Time for $2.8 billion

Meredith will pay $18.50 per share for publisher of Fortune and Time

TIME sold to Meredith for $2.8 B

Meredith Corp.  (MDP) said it will acquire Time Inc.  (TIME) in a deal valued at $2.8 billion, a further sign of consolidation in the print magazine industry.  Meredith has agreed to pay $18.50 a share for the publishing company that owns magazines  such as Time, Fortune and Sports Illustrated.

The deal includes $1.85 billion in cash and the assumption of debt. It had been approved by both firms’ boards of directors and is expected to close in the first quarter in 2018.

The transaction received financial backing from the billionaire Koch brothers. Meredith said it secured $650 million from Koch Equity Development, the investment arm of Koch Industries, but the publisher said Koch Equity Development would not have a seat on the Meredith board and “will have no influence on Meredith’s editorial or managerial operations.”

Meredith Corporation is the owner of Family Circle, Better Homes and Gardens and AllRecipes, and is based in Des Moines Iowa.  The company also owns local television stations — that has allowed Meredith to better weather the economic storm that has faced print publishers.

A deal between Meredith and Time Inc. fell apart in 2013 after Meredith reportedly said that it did not want to acquire some of Time Inc.’s best-known titles, including Time, Fortune and Sports Illustrated. Meredith also expressed interest in buying Time Inc. earlier this year before it walked away — in part because it could not secure sufficient financing. The Kochs helped the company overcome that problem.

MDP closed at $61.00. TIME closed at $16.90.


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Cerner and Amazon to announce a deal next week

Amazon to announce ‘huge healthcare deal’ with Cerner, CNBC says

 

AWS and CERNER to announce major deal. See Stockwinners.com for details

Shares of Cerner (CERN) are up 4.5% to $69.75 after CNBC, citing sources, reported that Amazon Web Services (AMZN) CEO Andy Jassy plans to announce next week that the company is teaming up with Cerner to help health-care providers better use their data.

Cerner Corporation designs, develops, markets, installs, hosts, and supports health care information technology, health care devices, hardware, and content solutions for health care organizations and consumers in the United States and internationally.

ANALYST COMMENTS

Stifel analyst David #Grossman noted that such an agreement would allow Cerner to leverage AWS’ global reach and technology to scale this business, which is still relatively small but is perceived to be one of the more important and faster growing industry segments, Grossman tells investors.

A “much more significant opportunity” would be for Cerner to reduce implementation times and reduce the capital intensity of its business by partnering with a hyperscale cloud provider, like Amazon, added Grossman, who keeps a Hold rating on Cerner shares.

RBC Capital analyst George #Hill commented that he thinks the deal would give the company even more credibility when trying to sell its outsourcing or hosting services to large health system clients.

The analyst, who doesn’t see Amazon getting into the provider interface business near to medium term, doesn’t view the deal as a meaningful threat to Cerner, he adds. Hill maintains an Outperform rating and $74 price target on Cerner shares.

Piper Jaffray analyst Sean #Wieland says that if they can overcome patient privacy risks, the partnership will be complementary and synergistic. Further, the analyst believes the deal would also validate Cerner as a market leader in Electronic Health Records. Wieland reiterates an Overweight rating and $70 price target on Cerner‘s shares.

OTHERS TO WATCH

Shares of athenahealth (ATHN) initially dropped after CNBC said Cerner (CERN) will be teaming up with Amazon Web Services (AWS) to help health-care providers better use their data, but the stock has recovered to briefly move back into positive territory following the headlines.


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Digital Ally exploring strategic alternatives

Digital Ally exploring strategic alternatives

Digital Ally exploring strategic alternatives. See Stockwinners.com for details

Digital Ally (DGLY) announced that its board has initiated a process to explore a full range of strategic alternatives to best position the Company for the future including, but not limited to, monetizing its patent portfolio and related patent infringement litigation against Axon Enterprise, Inc. and Enforcement Video, LLC d/b/a WatchGuard Video, the sale of the company as a whole, or the sale of select properties or groups of properties or individual businesses.

The result of the strategic review may also include the continued implementation of the company’s business plan.

The company has retained Roth Capital Partners to assist in this process.

There can be no assurance a transaction will result from this process and the company does not intend to disclose additional details unless and until it has entered into a specific transaction.

The company has recently received several unsolicited inquiries from parties involving a variety of alternatives including, but not limited to,

  1. seeking distribution and/or licensing rights to the company’s patented VuLink auto-activation technology,
  2. seeking distribution and/or licensing rights to the company’s suite of patents other than the VuLink;
  3. full sale of the company; and
  4. partial sale of its law enforcement or commercial divisions.

In addition, the company has recently entered into an exclusive distribution agreement with VieVU, LLC regarding the company’s patented VuLink product line.

The company believes the unsolicited inquiries are being driven by the recent and important wins it received in the U.S. Patent Office that confirm the validity of our VuLink and related auto-activation technologies.

Digital’s board and management engaged Roth to ensure that the company and its shareholders consider all reasonable alternatives to maximize shareholder value, given the multiple inquiries.

On July 6, the Patent Office denied Axon’s petition for inter partes review, or IPR, of Digital’s Patent No. 9,253,452. And on August 3, 2017, the Patent Office denied Axon’s final petition for IPR of the ‘452 Patent. This was Axon’s final attempt to invalidate the ‘452 Patent before the Patent Office.

With the Patent Office determining that Axon failed to demonstrate even a reasonable likelihood of invalidating the ‘452 Patent in its IPR petition, an IPR status update was submitted to the District Court of Kansas.

The Court can now decide whether to maintain the stay of the litigation that was implemented pending the results of the IPR petitions. The Company believes that there will be no reason to maintain the stay and, if lifted, it will request an expedited schedule for trial.

On May 27, 2016, Digital filed a complaint against WatchGuard in the U.S. District Court for the District of Kansas alleging patent infringement based on WatchGuard’s VISTA Wifi and 4RE In-Car product lines.

In May 2016, WatchGuard filed an IPR petition with the Patent Office challenging the validity of the ‘950 Patent and filed a motion to stay litigation, pending at least a preliminary decision from the PTAB regarding the IPR petition filed challenging the ‘950 Patent and four additional IPR petitions filed by Axon challenging the ‘292 Patent and the ‘452 Patent. In doing so, WatchGuard agreed to be bound by the Patent Office’s decision in connection with the four IPR petitions filed by Axon against the ‘292 Patent and the ‘452 Patent. A compromise was subsequently reached under which the court stayed the case, and ordered the parties to submit a report by January 5, 2018 notifying the court about the status of the pending IPR petitions.

The Patent Office subsequently denied institution of all of Axon’s IPR petitions against the ‘452 Patent, which means these requests will not proceed.

The Company expects Patent Office to render its decision in the near future regarding whether it will grant institution of WatchGuard’s IPR regarding the ‘950 Patent.

DGLY closed at $1.80.


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