Environment:
Fresh install 16.04
Razer Blade 14 2014
Intel GPU
Nvidia 870M
1x HDMI port

I originally had no video drivers installed and was using the Intel gpu
and this did not work with DisplayLink with 1.4x drivers installed until
i added xorg.conf.d/20-intel.conf. After this it worked as a third
display but I had disappearing mouse cursor issues constantly and only
with the DisplayLink hdmi usb adapter plugged in... there were times
when the mouse wouldn't come back for minutes. Most of the time the
behavior would be: on the top half of the screen the mouse would only
flicker and on the bottom half it would completely disappear. I
experimented with all permutations in the directory
/usr/share/xorg.conf.d/ between 20-nvidia.conf, 20-intel.conf one being
present vs both and all of the params in each scenario: TearingFree
false/true, TripleBuffering false/true, PageFlip false/true

Solution for me was to use the GNOME desktop, the 20-intel.conf with only:
Section "Device"
Identifier "Intel Graphics"
Driver "Intel"
EndSection

And using the Nvidia driver 340 proprietary in AdditionalDrivers while
setting it to be primary usage in Nvidia application with rendering
quality set to performance.

No more disappearing mouse, 3 monitors all plugged in at boot and only a 10 
second wait for the USB DisplayLink monitor to show up after login.
 
Cheers

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https://bugs.launchpad.net/bugs/1278223

Title:
  Mouse Flickering after adding 3rd Monitor

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