Important Questions Investors Should Ask Universal Display

Last week Oppenheimer criticized our initial research report on Universal Display Corporation (“UDC”; NASDAQ: OLED) that discussed the devastating findings of a filing at the European Patent Office (“EPO”). The Oppenheimer analyst stated that the 60+ pages of filed scientific analysis we referred to “is no different than what we’ve read in [UDC’s] 10-Q.” Our initial response to Oppenheimer can be read here.

Today UDC management presented at the Oppenheimer Emerging Innovations Conference. A webcast of the conference is available here.

UDC has aggressively sought orders from the U. S. Securities & Exchange Commission (“SEC”) to prevent analyst and investors from understanding the most crucial terms of its agreements with Samsung. Later this week will be launching a data room to present analysis of UDC’s use of SEC CT orders to investors.

Below we are providing questions that show the public disclosures necessary for investors to assess the credibility of UDC management’s representations. These questions deal with matters that are central to our research on UDC and that UDC has avoided addressing openly with investors.

• Where is the physical basis UDC relies on to justify its claims that the company “owns” phosphorescent OLED? Specifically, what experimentation underlies the publication of any results that UDC uses to support this claim that the company has called a “dramatic breakthrough?”

• Specifically, who funded the cost and conducted the above referred to experiments, where were the experiments conducted, and where were they first published?

• UDC has sought and obtained orders from the SEC allowing confidential treatment for the redacted portions of the August 2011 supply and licensing agreements with Samsung. The redaction removed the key terms of the Samsung agreements that analysts and investors must have to properly evaluate the validity of the company’s claim that it “owns” phosphorescent OLED. This redaction essentially destroys the ability of investors to assess the impact of an adverse patent ruling, especially in the EP-238 case in November. Is UDC willing to provide investors with all existing language in its Samsung agreement necessary to for analysts and investors to evaluate its claims?

• UDC does not disclose the pricing, quantity and timing of its red emitter material sales to Samsung. UDC’s reported quarterly sales of red emitter have not reconciled with unit sales of Samsung products containing red emitter material. In fact, UDC sales of red emitter material have declined over the past year even as Samsung’s sales of Galaxy phones have ramped up. UDC’s explanations of these results lack sufficient factual disclosures to allow analysts and investors to evaluate their validity, especially given that UDC’s has prevented analyst and investors from reviewing its contract with Samsung that governs the reported results.