- Mitek's position as a patent licensing company is interesting in the context of some of the most widespread financial litigation of the last decade.
- Indemnification demands are structurally difficult to enforce by Mitek licensees, and the USAA crusade will keep patent agreements from including many covenants.
- It is not in USAA's interest to go after Mitek directly, but we also see that they will never be acquired till the litigation is resolved.
- The price is spring-loaded, where a legal resolution, even if quite unfavorable, will yield superb returns as Mitek takes a multiple in line with peers and as an acquisition target.
- Its position at the center of many market actors happens to put them in a game theory equilibrium, creating a situation akin to a demonstrably undervalued option.
For further details see:
Mitek Is Protected And Primed By Game Theory, Cheap On An Options Basis