Famed Architect’s Lawsuit Against Google Just Got Much More Serious

Eli Attia alleges he wasn’t the only one mistreated by the search giant.

A long-running lawsuit filed against Google by a prominent architect has just gotten much broader.

Last week, the Superior Court of California granted a motion adding racketeering charges to the civil case being pursued against Google by Eli Attia, an expert in high-rise construction. Attia claims Google stole his idea for an innovative building design method – and now he wants to prove that it does the same thing frequently.

Attia’s suit was originally filed in 2014, four years after he began discussions with Google (prior to its reorganization as Alphabet) about developing software based on a set of concepts he called Engineered Architecture. Attia has said Engineered Architecture, broadly described as a modular approach to building, would revolutionize the design and construction of large buildings. Attia developed the concepts based on insights gleaned from his high-profile architecture career, and has called them his life’s work.

Google executives including Google X cofounder Astro Teller came to share his enthusiasm, and championed developing software based on Engineered Architecture as one of the company’s “moonshots.” But Attia claims the company later used his ideas without fulfilling an agreement to pay to license them.

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Attia’s suit names not just Google, but individual executives including founders Larry Page and Sergey Brin. It also names Flux Factory, the unit Attia’s suit alleges was spun off specifically to capitalize on his ideas.

Speaking to the San Jose Mercury News, Attia’s lawyer claims Google told Attia his project had been cancelled, “when in fact they were going full blast on it.” Flux Factory is now known as Flux, and touts itself as “the first company launched by Google X.”

Attia’s suit will now also seek to prove that his case is representative of a much broader pattern of behavior by Alphabet. According to court documents, the motion to add racketeering charges hinged on six similar incidents. Those incidents aren’t specified in the latest court proceedings, but Alphabet has faced a similar trade-secrets battle this summer over X’s Project Loon, which has already led to Loon being stripped of some patents.

The idea of racketeering charges entering the picture will surprise many who associate them with violent organized criminals. But under RICO statutes, civil racketeering suits can be brought by private litigants against organizations and individuals alleged to have engaged in ongoing misdeeds. The broader use of racketeering charges has slowly gained ground since the introduction of RICO laws in the 1960s, with some famous instances including suits against Major League Baseball and even the Los Angeles Police Department.

Tech

Uniti Group: I Just Bought Shares Of This 16% Yielder

I take a lot of pride in the fact that my portfolio has never experienced a dividend cut. I came close once with KMI, but I managed to sell the position before the cut was announced. I spend a lot of my time during the due diligence process focusing on dividend-related metrics with a specific focus on sustainability and dividend growth prospects. Well, I just put that perfect record at risk with a purchase of Uniti Group (UNIT) shares at $ 15.01, or a very hefty 15.98% yield.

This ~16% yield is nearly double my previously high yield, which was Omega Healthcare Inc (OHI) at just a tad bit more than 8%. Typically, when I see yields in the double digits, I get nervous. Yields that high mean the asset is distressed. When looking at stocks like UNIT investors are receiving a very high potential reward for exposing themselves to a very high perceived risk. I’m not a huge fan of making these risky bets. But, I’ve spent a lot of time reading articles and commentary about UNIT published over the last couple of weeks focused on the company’s enormous ~40% fall since the start of August. I’ve read enough bullish commentary to get me interested in the stock, especially from contributors here at Seeking Alpha that I’ve come to respect over the years.

Honestly, I think this company’s recent drama has been exhausted by the Seeking Alpha community and I don’t have anything new to add to the conversation other than the fact that I am now long the stock. I like to keep followers up to date on my recent portfolio maneuvers though, so I wanted to write this piece. However, instead of re-hash the pros and cons of UNIT ownership here, I will link you to some of my favorite articles recently published regarding UNIT.

My absolute favorite REIT contributor here at Seeking Alpha is Brad Thomas. Mr. Thomas has led me to highly profitable investment decisions on several occasions. I respect his opinion in the REIT space above all others. In late August/early September, he published two bullish pieces on UNIT (when shares were trading at levels much higher than they are today). One of them remains behind SA’s Marketplace paywall, but another is free to the public. Here’s a link to Mr. Thomas’s most recent UNIT piece which includes an informative interview with UNIT’s CEO Kenny Gunderson and a reiteration of Mr. Thomas’ “BUY” rating on shares post Q2 results.

Another UNIT piece that really caught my eye was Dividend Sensei’s recent article explaining why he’s adding to his UNIT stake, making it his largest individual position. I really like Dividend Sensei’s work here at SA. He puts together a very in-depth analysis that is also easy to understand. I admit that I am much more risk-averse than he seems to be. He trades with margin and oftentimes seeks much higher yields than I do. I would never allow a company like UNIT to become my largest holding. Actually, I don’t imagine a future where UNIT ever makes up more than 1% of my overall portfolio (right now, it’s weighting is ~0.375%). Even so, I oftentimes find is opinions to be more than reasonable and while our portfolio management strategies aren’t the same (which is to be expected because no two people are in the same situation when it comes to personal finance and long-term financial goals), I still respect his opinion immensely.

I’ll talk more about this piece in a bit, but Ian Bezek’s recent article on the matter was valuable to me as well, especially in terms of trying to put this company’s potential risks into perspective against what seems to be an overly bullish consensus amongst SA contributors and readers, mainly, I think, because of UNIT’s incredibly high yield. Ian is long UNIT, although as of his latest piece, he hadn’t added to his position on more recent weakness. I think Ian has a keen eye for value and the fact that he too was long, played a role in my decision-making.

Alpha Gen Capital wrote a particularly bullish piece, hinting at the fact that UNIT could be one of the year’s best opportunities due to recent overreactions in the share price movement. This piece really breaks down the issues that UNIT is facing with WIN, some of the potential fallouts of legal/bankruptcy scenarios. All of this is very confusing and remains highly speculative, though my main takeaway is that it appears likely that, regardless of a WIN bankruptcy, UNIT will still be in a position of strength due to the Master Lease arrangement it has with WIN. Lease re-negotiation still appears to be a possible scenario here, which would change the landscape that UNIT operates in the present, but for the time being, I’m willing to trust in the payments from the Master Lease deal and rely on the strength of UNIT’s infrastructure, which should remain in demand moving forward.

And most recently, Beyond Saving and Dane Bowler have written pieces regarding the breaking news that broke this week surrounding more legal/head fund issues regarding WIN bonds defaulting. The comment streams following all of these pieces have been enlightening. There are bulls and bears on either side of the aisle, but I was pleasantly surprised to see that another one of my favorite SA REIT contributors, Bill Stoller, recently went long UNIT as well. As far as I know, Mr. Stroller hasn’t published an article focused on UNIT, but I’ve seen him make enough solid calls in the past to give weight to his recent purchase in my own decision-making process.

So, there you have it. This is a unique situation for me, investing in a speculative income play like this. I may not like to take big risks like this, but I have always said that I like to buy things when they’re cheap. At this point, I admit that UNIT could just as easily turn out to be a value trap as it could a tremendous value. Looking at the value of the company’s assets and its cash flow potential, I see validity in calls that have price targets in the $ 35-40 range. That would imply massive upside at today’s prices. Due to issues that UNIT faces with its over-reliance on distressed Windstream (WIN), I don’t foresee UNIT selling anywhere near the fair value of its parts anytime soon though, so their estimates really amount to a hill of beans.

There are so many rumors and potentially headwinds swirling around this stock that I think it’s nearly impossible to predict its future share price movements. I wouldn’t be surprised to see a short squeeze that sends the stock rocketing up to $ 20 or more tomorrow. I also wouldn’t be surprised to continued pressure on shares, sending them down into the single digits. I won’t attempt to signal any sort of direction of these shares; simply put, I acknowledge that I am speculating here.

This is why I bought a relatively small, ¼ position. I bought these shares because of the combined upside potential of the shares in a turnaround as well as the very high ~16% dividend yield. Right now, it appears that UNIT’s dividend is covered by AFFO, which management expects to come in somewhere in the $ 2.50 range in 2017. This is a good thing. However, as discussed at length in this article by Ian Bezek, a dividend cut may still be in the cards because without one, it will be very difficult for UNIT to raise cash.

UNIT needs to raise cash over time to continue to diversify itself away from WIN. Right now, WIN makes up ~70% of the company’s business. Management has stated plans to get this ratio down to ~50% in the short-term; however, this transformation will require additional acquisitions and I think it’s ludicrous to think that UNIT management will be able to find investments with cap rates that exceed its current dividend yield.

Because of this scenario, one could argue that a dividend cut for UNIT would actually be a good thing for the long-term. It might enable it to continue to diversify away from WIN exposure and grow its asset base. Michael Boyd wrote an article focused on this possibility today. This general point was that a distribution cut for UNIT is the right move for management to make. Once again, in the comment section, there are members on both sides of the fence of this issue. There are many question marks when it comes to UNIT in the present, but the one thing that is clear is that the company’s 16% has surely caught the eye on SA’s dividend and income community.

My portfolio’s rule regarding dividend cuts is cut and dry. A cut equals a sell, without exception. Well, being that an investment in UNIT breaks just about half of my stock screening rules anyway, I will be in wait and see mode if UNIT should slash its dividend. This is a small enough position for me that in the event of sudden weakness, it won’t do significant damage to my portfolio’s overall returns. On the flip side of this coin, UNIT’s yield is high enough to move the needle a bit in terms of my annual income expectations. Due to its extremely high yield, this ¼ position in UNIT is currently scheduled to generate the same amount of income as a typical full position with a “normal” yield for my portfolio would over a year in just a couple of quarters (my portfolio’s overall yield is just a tad above 2%).

Investing in distressed assets has led to riches for investors throughout the history. It has also lead to ruins. I’m not saying that I’m smart enough to pick and choose the winners, but I have seen enough bullish opinions from well-respected analysts/contributors to inspire me to make a small bet on UNIT. I don’t think these shares are for the faint of heart. There are so many rumors flying around regarding WIN that attempting to trade in and out of UNIT on a daily basis seems to be a fool’s errand as well. I plan on stashing the small position of UNIT shares that I bought at $ 15 away and accepting the income that they generate for my portfolio, whatever that may be. I bought one day before UNIT went ex-dividend, meaning that I’ve already captured one $ 0.60 payment. I don’t know how many more investors can expect at this level, but if management is able to maintain the dividend, I expect to do quite well here.

Although I realize that I may end up having to stay in this name for awhile depending on what happens moving forward, I don’t think this is a buy and forget type of stock. It’s both a speculative income play as well as a turnaround play. If it turns around, I think it will turn around quickly. I will continue to monitor the business and management’s attempt at diversifying its customer base. If management cuts the dividend I’m sure the share price will suffer and at that point I’ll be in it for the long-haul, hoping for a Kinder Morgan-like recovery post dividend cut. If the market receives better than expected news out of WIN and UNIT bounces drastically, I will be happy to sell my shares, taking my profits large short-term profits (these shares are held in a tax-advantaged account so that I don’t pay taxes on that hefty dividend).

Disclosure: I am/we are long UNIT, OHI.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Tech

World’s thinnest, lightest VR headset looks just like a pair of sunglasses

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I had my doubts when China’s Dlodlo (pronounced “dwaw dwaw”) announced the V One, the world’s thinnest and lightest VR headset back in April.

It sounded too good to be true. At a press event in New York on Monday, I got a chance to try the V One headset on and I have to say it’s impressive. Magical, even.

Looking more like an odd pair of shades, the V One is an ultra-light headset when you compare it to the distinctively bulky shape that’s become the norm for VR headsets like the Oculus Rift and HTC Vive and Samsung Gear VR. It’s a standalone headset, meaning you don’t need a separate device — a PC or a phone — to use it (the “brains” of the gadget are in an accompanying “processing unit” that’s about the size of an iPod touch). Read more…

More about Vr Headset, Dlodlo, Virtual Reality, Vr, and Tech


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Don’t Sell EMC Ahead of Dell Merger Just Yet

Its business segments, including cloud computing, Big Data, mobile and security applications, have begun to improve. And the fact that it owns the …

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Cloud: Just what the doctor ordered

Two of the most risk averse industries are healthcare and financial services. Yesterday I wrote about how banks are increasingly using public IaaS cloud services. A new study this week finds that health care are warming to the cloud too.

Two years ago HIMSS Analytics and Level 3 found that 22% of health care providers planned to use cloud for back-office functions. This year, the number more than doubled to 46.7%. Just over one in three respondents said they have some sort of patient engagement tools hosted in the cloud. Another popular use case for cloud was Health Information Exchanges.

To read this article in full or to leave a comment, please click here


Cloud Computing

LEGO’s ‘Idea Conference’ Is About More Than Just Bricks

It seems like the older I get, the more time I spend with Lego bricks. Sure, I say that I buy the kits for my kids, but I’m always sitting on the floor next to them within minutes of opening the box. What’s more, the grown up part of me is impressed with the company’s business practices and fascinated by the way in which the brick itself has become such an iconic symbol all around the world.


Cloud Computing

Uber just announced one-way trips from California to Tijuana

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Today, Uber announced that it will start offering rides that span international borders, at least for California residents hoping to make it into Mexico for spring break. Uber is already available in San Diego and Tijuana, but international restrictions have so far kept drivers from crossing the border with passengers, a move that saw many riders dropped off at the border and hailing a cab — or another Uber — once they walked across. Now, riders and drivers equipped with the necessary documentation — a US passport — can make the trip into Mexico before the driver is met with the…

This story continues at The Next Web


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GM Just Spent a Buttload of Money on a Driverless Car Start-Up

In yet another sign that driverless cars are just over the horizon, General Motors announced today that the company is buying Cruise Automation—a Silicon Valley start-up that’s developing autonomous vehicle technology. According to Fortune, the deal cost GM over $ 1 billion in cash and stocks.

Read more…



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Eric Schmidt-Backed Startup Taykey Expands To Find The Perfect Audience For More Than Just Ads

After raising millions from Eric Schmidt months ago, Israeli-American startup Taykey has launched a product to help brands track their ideal audiences in real-time for more than just ads but product strategy, too.


Cloud Computing

The A.I. Of Destruction In ‘Just Cause 3’

Lead AI designer Niklas Norin speaks with Forbes contributor Todd Kenreck about creating artificial intelligence that reacts to the massive destruction of ‘Just Cause 3.’


Cloud Computing

NSA director just admitted that government copies of encryption keys are a big security risk

NSA chief Michael S. Rogers speaks at Fort Meade.

The director of the NSA, Admiral Michael Rogers, just admitted at a Senate hearing that when Internet companies provide copies of encryption keys to law enforcement, the risk of hacks and data theft goes way up.

The government has been pressuring technology companies to provide the encryption keys that it can use to access data from suspected bad actors. The keys allow the government “front door access,” as Rogers has termed it, to secure data on any device, including cell phones and tablets.

Rogers made the statement in answer to a question from Senator Ron Wyden at the Senate Intelligence Committee hearing Thursday.

Screen Shot 2015-09-24 at 2.06.46 PMWyden:  “As a general matter, is it correct that anytime there are copies of an encryption key — and they exist in multiple places — that also creates more opportunities for malicious actors or foreign hackers to get access to the keys?

Screen Shot 2015-09-24 at 2.07.12 PMRogers: Again, it depends on the circumstances, but if you want to paint it very broadly like that for a yes and no, then i would probably say yes.”

View the exchange in this video.

Security researchers have been saying for some time that the existence of multiple copies of encryption keys creates huge security vulnerabilities. But instead of heeding the advice and abandoning the idea, Rogers has suggested that tech companies deliver the encryption key copies in multiple pieces that must be reassembled.

From VentureBeat

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“The NSA chief Admiral Rogers today confirmed what encryption experts and data scientists have been saying all along: if the government requires companies to provide copies of encryption keys, that will only weaken data protection and open the door for malicious actors and hackers,” said Morgan Reed of the App Association in a note to VentureBeat.

Cybersecurity has taken center stage in the halls of power this week, as Chinese president Xi Jinping is in the U.S. meeting with tech leaders and President Obama.

The Chinese government itself has been linked with various large data hacks on U.S. corporations and on U.S. government agencies. By some estimates, U.S. businesses lose $ 300 billion a year from Chinese intellectual property theft.

One June 2nd, the Senate approved a bill called the USA Freedom Act, meant to reform the government surveillance authorizations in the Patriot Act. The Patriot Act expired at midnight on June 1st.

But the NSA has continued to push for increased latitude to access the data of private citizens, both foreign and domestic.


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The AI of Destruction In ‘Just Cause 3’

Artificial Intelligence designer Niklas Norin speaks with Forbes contributor Todd Kenreck about creating AI that reacts and cleans up after the massive devastation of Just Cause 3.


Cloud Computing

Home>Cloud>Cloud Computing Just Got Easier, Thanks to the Gov Cloud Shopper

Due to the frustrating limitations of their existing IT systems, federal agencies are embracing cloud computing. Upgrading an IT system is like …


Cloud Computing