Last Friday, the publicly traded shares of Universal Display Corp.’s common stock (“UDC”; NASDAQ: OLED) experienced an undeserved and counterintuitive 25% one-day increase after UDC announced a supposed “beat and raise.” UDC perpetrated its scheme, the supposed “beat and raise,” exactly as Goldman Sachs and others, including asensio.com, had long-ago advised. Tomorrow asensio.com will be issuing a detailed report to address UDC’s material misrepresentations that, in the words of one of their analysts, “frustrated” investors’ ability to properly value the shares and UDC’s attempts to distract from sustained negative financial results, along with UDC’s distorted presentation of recent adverse patent litigation decisions.
The more important issue is UDC’s denial of the materiality of the upcoming trial on what UDC is now describing as its “early fundamental phosphorescent OLED inventions,” which is scheduled within days, on November 20th and 21st. UDC’s conduct seems to be aimed at purposefully cultivating a belief among analysts that this pending decision cannot have a material negative outcome on UDC’s ability to collect semi-annual payments from Samsung or to obtain new business.
UDC’s so-called “beat and raise” was totally invalid. UDC’s Q3 results were actually below the expectations of informed observers. UDC’s results were below those implied by the growth in OLED mobile display shipments in the quarter. They were not a beat, but a miss. Furthermore, UDC is anticipating a drop in materials sales in Q4, despite continued display shipment growth. UDC’s red emitter sales continue to experience year-over-year and quarter-over-quarter declines.
Again, in our view, we consider UDC’s continuing efforts to avoid openly addressing the potential “sudden death” impact of the hearing later this month on UDC’s most crucial patent claims, while continuing to distort the meaning of other also significant adverse patent decisions, to be more serious than its preposterous “beat and raise.”