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Roku’s Patented Round Robin & Reddit’s Rubbish Sale

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Ban Hammer Of The Gods?

Aaaah-aaah! Ah!

Won’t ship Rokus to new lands. Fighting the horde … of patent trolls.

Oh Valhalla, a Roku (Nasdaq: ROKU) update’s coming…

We stream with threshing oar — our only goal will be binge-watching shows!

But if certain corporate instigators had their way, Great Ones, some Roku devices would be banned from importing. No more would Rokus be allowed into the land of the ice and snow — nor the land of the midnight sun, where the hot springs flow.

The keyword here, Great Ones? If.

Our story starts with Universal Electronics Inc. (Nasdaq: UEIC), which basically only makes replacement TV remotes. It’s a simply enthralling business, believe me…

Oh yeah, UEI also likes to stir up patent-infringement cases to waste the time, money and investor attention span of other companies. UEI really likes doing this.

And over the past few years, Great Stuff Picks’ very own Roku fell into UEI’s patent-trolling Venus fly trap.

Allegedly, Roku infringed on three of UEI’s patents for specific user interface systems, “optimized appliance control” and relaying key codes via remotes.

Now, the U.S. International Trade Commission (ITC) has banned Roku from importing “televisions, set top boxes, remote control devices, streaming devices and sound bars” that infringe on UEI’s patents.

Sounds devastating, right? No wonder ROKU stock plunged 13% yesterday. As you’d expect by now, I had reservations…

UEI instantly claimed victory in its patent-infringement case (because of course it would). The only problem with this is that claiming victory doesn’t mean you’re right … or that your claims are relevant. Just ask anyone who’s had the misfortune joy of playing Catan with me.

But Roku? Oh, Roku wasn’t having any of this “ban hammer sell-off” nonsense.

Roku instantly rebuffed and refuted UEI’s claims. Not only were two of the patents invalid, but the third only applied to old Roku remotes that are no longer made.

In effect, the “ban” only concerns these older Roku remotes, which happen to be paired with non-infringing Roku devices. Roku was quick to implement a software patch — over a year ago, mind you — that fixes the infringement, making UEI’s final claim moot.

So … what does this ban actually change?

Nothing. Nada. Bo Diddly squat-ski. Roku’s vice president of litigation and intellectual property confirmed this outright:

Based on the ITC’s ruling, we do not anticipate any disruption in Roku’s ability to continue to import products.

Here we see the beautifully pointless act of patent trolling.

This supposed “win” for UEI is one big nothingburger — especially for any potentially concerned ROKU investors. There are no monetary damages. Nothing will be stopped from coming into the country.

But that won’t stop UEI from droning on against Roku — I mean, once it stops trolling, UEI has to go back to programming generic remotes. And that’s a fate that no one wants.

Notice the sheer dramatic eloquence. Here’s UEI General Counsel Richard Firehammer Jr. with the company’s … how should I say this, “foolproof” argument:

Even now, we believe that Roku continues to infringe the very patent it was found to infringe despite its attempts to ‘design around’ its infringement with recent software updates. These updates coincide with degraded Roku product performance, as evidenced by recent media reports and consumer outcry.

Gasp! I am shook.

Do you infringe upon your infringement, Roku? Dick Firehammer Jr. represents the outcry of a Roku nation scorned!

Wow, the end of the year’s hitting y’all hard, huh?

My point remains all the same: UEI can think it’s “winning” all it wants, but Roku will keep on keeping on — regardless of this short-sighted kneejerk sell-off. And if this legal nothingburger is why ROKU is falling this week, what do we do, Great Ones?

We make like NSYNC and buy, buy, buy.

ROKU shares have made up some of the gains it lost yesterday — back up 3% today — but if you Great Stuff Picks investors were looking to add to your Roku position, now’s your chance.

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Reddit Rallies The Troops

Great Ones, we all knew this day would come eventually, and it’s finally here: Retail rabble-rouser Reddit has filed paperwork with the SEC to become a publicly traded company.

**distant velociraptor shrieking**

While details have yet to be released on how many shares Reddit will offer in its IPO, or how expensive those shares might be, I can already see the anti-social media madhouse taking off like a rocket ship on Day 1 … that is, if the WallStreetBets crowd doesn’t tank its stock first.

It took all of 10 seconds for meme-stock supporters in the WallStreetBets subreddit to realize that things will never be the same once Wall Street sinks its hooks into their beloved “anti-establishment” corner of the internet.

A user by the name of LowercaseG_Sol summed up what everyone else in the Reddit thread was thinking when news of its IPO dropped:

But, wait, if WSB goes full *#@^%( and we all pump the &%(# out of Reddit stock, then we profit off them profiting off of us profiting…

That kind of circular thinking will send you to the depths, trust me. Although they do make a good point: Once Reddit goes public, it could spell the end to the company’s laissez-faire culture that Redditors know and love. (More censorship, ads and scrutiny from the SEC all immediately come to mind.)

In fact, some Redditors are already rallying the troops to short Reddit’s stock, just like they’ve previously done with popular meme stocks GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC).

The jury’s still out on whether Reddit stock will become the target of a brand-new short squeeze or rocket to the moon. But one thing’s for sure: It’s gonna be a wild ride.

Adobe Atrophies

Everyone and their mother might be buzzing over Reddit’s IPO today, but let’s not forget about the companies that already live and die by investors’ fee-fees — like software wunderkind Adobe (Nasdaq: ADBE).

In case you missed it, Adobe just gave guidance on its fiscal 2022 outlook … and it left many Wall Street analysts wondering why they even woke up this morning.

The Street had its heart set on revenue of $18.2 billion and earnings of $14.26 per share. Adobe said: “In your dreams, buddy!” and offered a more conservative projection for $17.9 billion in revenue on $13.70 per share.

This ho-hum outlook completely eclipsed all the good news Adobe did announce this morning, which included fourth-quarter earnings and revenue that topped even Wall Street’s lofty expectations. The software superstar made a pretty penny over the past three months, to the tune of $4.11 billion.

Sadly, this still wasn’t enough to pull ADBE investors out of the doldrums. Once they caught wind of slowing sales in the new year, Adobe plummeted by nearly 10%.

I’ve Had Enough Of Your Trash Talk

Reddit isn’t the only company looking to go public, though celebrity-backed waste and recycling platform Rubicon likely won’t get the same amount of hype and hyperbole as its meme-friendly familiar.

That’s right, Great Ones, we’re talking trash today … and I’ll hear no trash talk about it.

Now, if you aren’t familiar with Rubicon, it’s really a Big Tech company that uses data collection to deliver waste and recycling solutions to high-profile clients and government entities.

How high profile? How about Walmart, Starbucks, FedEx and even Apple? Not to mention the cities of Kansas, MO, Baltimore, MD, and Columbus, OH…

In other words, Rubicon rules the trash heap when it comes to digital waste management. Did I mention some of its financial backing came from Leonardo DiCaprio? Cause that’s how you know it’s legit…

Anyway, Rubicon plans to go public by partnering with Founder SPAC (Nasdaq: FOUN) in a deal worth roughly $2 billion. Little more is known about the SPAC merger yet, other than Rubicon will trade on the New York Stock Exchange under the ticker symbol RBT.

Now, as hyped as you may or may not be for Reddit’s IPO, I’d keep a closer eye on Rubicon. Trash titans might not make for the same stimulating table conversation as angsty teenage trash-talkers, but in a world where business fundamentals still matter … it might be the safer investment choice.

Of course, Reddit and Rubicon aren’t the only soon-to-be stocks worth mentioning!

Right now, there are over 700 private companies — worth more than $2.3 trillion combined — that could soon list their shares on major indexes. SpaceX, Epic Games, Stripe…

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Lennar Loses Steam

And then … there was unlucky Lennar (NYSE: LEN).

The homebuilder delivered disappointing quarterly earnings and revenue figures yesterday, missing estimates for both even as new-home construction started to pick up in November.

Lennar blamed the usual suspects for its latest letdown, saying the company faces a “continued housing supply shortage driven by limited entitled land, labor and supply chain constraints.”

To make matters worse, Lennar only expects to deliver 12,500 homes in the first quarter of the new year, which is more than 2,000 fewer homes than Wall Street forecast — even after it factored in ongoing labor and production delays. Whomp.

We all know how Wall Street likes to throw a tantrum when it doesn’t get its way, and Lennar’s lackluster performance brought with it a full-on fit by LEN investors. The stock is now down about 3.5% on the day … but expect it to fall further if Lennar can’t churn out more houses to meet the real estate market’s red-hot demand.

And with that, I’ll hand it over to you, Great Ones. Would you invest in Reddit stock? Do waste and recycling SPACs wet your whistle? No? Then how about you tell me your thoughts on this public hit job against Roku…

Barring that, what else is on your mind this week? We’re less than a day away from tomorrow’s Reader Feedback, so make sure your voice is heard and write to us posthaste!

[email protected] is your home for hot takes and spit takes, investing questions and random market tomfoolery too. Whatever you want to write, we want to read!

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Until next time, stay Great!

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