Look for SNDK to be in freefall if there is any merit to the lawsuit filed against their founder alleging that the company’s key technology and patents were stolen from a company purchased by STM. The company didn’t need this news to go down, it was a short Trade of the Day way back on 11/9 for many reasons (back when the stock was way up at $60). That trade was filled at max profit way back on the 21st but, even at $47.50, it may be time to take another crack at it. Having failed to break back above the 50 dma of $53 on Tuesday, next stop could be the 200 dma of $36 (ouch!).
STM’s stock has been under a cloud for some time with SNDK suing them for patent infringement since 2004. It was in these proceedings (see above link) that STM claims to have uncovered this new evidence of shenanigans. I think this goes a little beyond the usual “sue me/sue you” bs that is typical in corporate law. If so, STM could get a very nice boost. SNDK’s other nemesis, LEXR, suffered a major setback when a California state superior court found there was insufficient evidence to support the damages ($465M) awarded by the jury against Toshiba. This was very unexpected and could crush Lexar’s stock, where more than 1/2 of the company’s market cap is based on anticipation of this award.
