All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral • Hacker News Board

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#61

Post by egdod » Mon, Nov 11, 2019, 4:02 AM UTC

flukus wrote: post #57

berberous wrote: post #5

The title and tone of this article make it sound unusual that the company used its IP as collateral. You can get better loan terms (such as the interest rate) if your loan is secured. If you are going to get a secured loan, the default is that it's secured by 'all assets', which includes IP. In order to perfect a security interest in IP, you need to make this type of filing -- and a lender will be especially sure to…

At least some of their key patents ( https://patents.google.com/patent/US20130128230/en?oq=inassi... ) are nearly halfway though there lifetime, so at best those patents will have a decade of value before they get a retail product out the door. It seems a bit like putting a decade old car up as collateral, sure it's got value but it's rapidly diminishing.

Patents have value even if you never get a product out the door.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#62

Post by zarriak » Mon, Nov 11, 2019, 4:20 AM UTC

Jerry2 wrote: post #29

> Magic Leap is estimated to have over 1,800 employees and 19 office sites. For a company that has no consumer product and has no revenue, to have this many employees is quite shocking to me.

1800 employees and yet not a single reason to own the product. Sad to look back and realize that the huge investment that got at least me excited was in retrospect probably just a hedge bet on AR blowing up.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#63

Post by chadcmulligan » Mon, Nov 11, 2019, 4:20 AM UTC

echelon wrote: post #3

How did they ever raise such capital? I want in on it. Capex for R&D is prohibitive.

Lol, I thought the same, here I am bootstrapping - the things I could do with 1 percent or even 0.1 percent of that money.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#64

Post by iamaelephant » Mon, Nov 11, 2019, 4:21 AM UTC

ekc wrote: post #53

hogFeast wrote: post #52

Earlier quoted context omitted.

The reason it makes headlines is because the value of IP is very volatile and bogus collateral is a very old scam (not only in banking btw, fake valuations are a feature of many scams). If I go to the park, pick up a rock, and then go to a bank and say there is diamonds inside worth $1m, and they lend against that then I have made $1m. If you lend against collateral, you are making a bet on the collateral being worth…

They released their product months ago.

Did they? I googled "buy magic leap" and all I can find are dev units ("Creator Edition"). That's not a consumer product. That's a pre-requisite for a consumer product. Magic Leap have never released a product for general sale.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#65

Post by v64 » Mon, Nov 11, 2019, 4:39 AM UTC

iamaelephant wrote: post #64

ekc wrote: post #53

Earlier quoted context omitted.

They released their product months ago.

Did they? I googled "buy magic leap" and all I can find are dev units ("Creator Edition"). That's not a consumer product. That's a pre-requisite for a consumer product. Magic Leap have never released a product for general sale.

You can buy a Magic Leap at https://shop.magicleap.com/

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#66

Post by mattmaroon » Mon, Nov 11, 2019, 4:42 AM UTC

TheSoftwareGuy wrote: post #19

I’m really hoping magic leap makes it in the long run. They’re a huge tech employer in south Florida, and frankly we could use more tech companies. I’m always afraid a recession will wipe them out and flood the market with experienced engineers.

They won't, because this isn't how you run a tech company successfully. You don't raise billions of dollars, hire thousands of employees, and take several years just to get anything to market. (Nevermind that what they got to market cost a fortune and by all accounts is massively underwhelming.) I can't think of a single successful company that started this way, but I can think of many failures.

They're a hedge bet made by VCs who don't want their LPs asking "why didn't you bet on the obvious market leader?" if AR blows up.

They cannot do anything but fail.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#67

Post by gumby » Mon, Nov 11, 2019, 4:44 AM UTC

Interestingly when I have gotten credit from Silicon Valley Bank they have always secured the debt with all the assets excluding IP. Why? Because they can't do anything with the IP while I presumably can find a buyer and pay them back.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#68

Post by gumby » Mon, Nov 11, 2019, 4:45 AM UTC

egdod wrote: post #61

flukus wrote: post #57

Earlier quoted context omitted.

At least some of their key patents ( https://patents.google.com/patent/US20130128230/en?oq=inassi... ) are nearly halfway though there lifetime, so at best those patents will have a decade of value before they get a retail product out the door. It seems a bit like putting a decade old car up as collateral, sure it's got value but it's rapidly diminishing.

Patents have value even if you never get a product out the door.

Patents can have value even if you never get a product out the door. Most patents are not worth the money spent getting them in the first place.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#69

Post by activeknowledge » Mon, Nov 11, 2019, 5:16 AM UTC

berberous wrote: post #5

The title and tone of this article make it sound unusual that the company used its IP as collateral. You can get better loan terms (such as the interest rate) if your loan is secured. If you are going to get a secured loan, the default is that it's secured by 'all assets', which includes IP. In order to perfect a security interest in IP, you need to make this type of filing -- and a lender will be especially sure to…

I couldn't possibly predict how Chase would act with that portfolio if ML failed to recover after this loan, but if past performance/decisions are any indication we'll probably find out very quickly. Important to note that this includes the series of ODG patents they acquired which cover a lot of early industrial AR applications. Wish I knew anywhere close to enough to hypothesize.

Re: All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral

#70

Post by sytelus » Mon, Nov 11, 2019, 5:38 AM UTC

> Magic Leap is spending somewhere between $600M and $800M per year and that they have burned through all of their initial $2.4 Billion.

Is it possible for ML to be viable at all? Assuming they manage to make $1000 profit eventually per device, they will need to sell at least half million devices each year. It seems militery usage probably won't be able to fund this alone as the size of US militery is just 1.5M. In US, 40M iPhones are sold each year and one can think of largest possible market for $2000 devices is likely around 5M to 10M per year. So 10% of that is certainly possible if there was a compelling experience device.