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Dang it…our pic of the NJ47 celebration from your office Tony is no longer on this site
Saved the posts from Houston, Carlsbad, and NJ… pics all gone… now just memories.
Hope y’all are well!
Interesting language contained therein.
"On May 24, 2022 and May 25, 2022, the Company also entered into privately negotiated warrant transactions (the “warrant transactions”) with the Counterparties, whereby the Company sold to the Counterparties warrants to acquire, subject to customary anti-dilution adjustments, approximately 5.9 million shares of Common Stock at a strike price of approximately $106.37 per share, also subject to adjustment. As consideration for the warrants issued on May 24, 2022, the Company received $43.7 million in the aggregate."
MO
loop
8k on a Friday afternoon before a long holiday.
Borrowed $469m
thanks glen....i always listened very intently when you shared your thoughts....wow...feels like old times.....happy memorial day to long lost friends!!!
My expectations for IDCC 2022 include but are not limited to the following:
* Lenovo litigation resolution including a 5G worldwide license
* Apple license renewal including a noticably higher royalty rate than was earned in our previous agreement
* Samsung license renewal including a somewhat better royalty rate than was earned in our previous agreement
* Avanci traction should result in cash flow before year end
* Consumer electronics income should continue to increase including new licenses
* Video compression agreements for Metaverse and Artificial Intelligence
* Wild card: Government contract (maybe)
One last thought (gut feeling): I tend to believe that it is more likely to see a patent sale than an outright sale of IDCC.
All just my humble opinions.
thats him....he came to the meeting a few times
He worked for the company in the early days. He came down with Lyme disease as I recall.
JPASQUE - correct
MAYBE CORPGOLD OR DATAROX?
Hello TC. I don't recall who you are speaking of. I never considered cisco a potential buyout suitor for IDCC although I did consider Intel a possibility years ago until Intel sold its wireless IP to Apple. Now Apple may be that potential buyout suitor for IDCC. It may be interesting to see how the upcoming Apple license renewal plays out.
Are you still dabbling in Energy Transfer (ET)?
no definitely not...i met data rox several times over the years....it was someone from the area where the firm was and the employees lived
Ok I changed my tune a bit
I don’t have a problem with borrowing money at a low interest
That’s actually pretty good if you consider rates moving up In The future
Use it to buy back stock is good
All we gott do is move to 70 and u get a will be saying management is genius
Hell get to 80 and issue some shares to pay it back
Data Rox seemed to be very knowledgable about Idcc and Qualcomm.
Could it have been DATAROX that was the individual?
TC, I remember that. Still in the back of my mind, along with a couple of others. Can't remember the poster's name either. Of course, I can barely remember breakfast.
LTE, read one of my earlier posts from yesterday. It costs IDCC about $100M for the interest, hedges and commissions for the 5 year period. that equals about 65 cents per share per year earnings that management is wasting...
Thanks - so it looks like their interest payments will jump from $8 million to
$14 million annually. That's not the worst thing in the world if they can
identify something good to buy or maybe buyback even more stock!
Thanks for pointing out the 3.5% notes - I just assumed that they haven't
been priced yet - I have so much other stuff to read!
The only explanation that I can have is that they're not optimistic about
the Samsung and Apple renewals. But, with that being said, why buyback
stock if that were the case? Secondly, in my view, Chen (the CEO) wouldn't give
up a high-profile role at QCOM to come to a company with dying IP.
So, to me, it looks like IDCC likes having ample cash at the ready for
more acquisitions and more stock buybacks.
dave....one company still sticks in my mind....there was a guy here in the old days who was knowledgeable about the inner workings of idc and the industry....he always insisted the eventual buyer would be cisco....ill still go with that....anyone remember his name?
They have been priced at 3.5% according to the press release. That’s close to enough to double the 2% they are currently paying that I’ll round it off to that.
“ We don't know the yield of the 2027 notes because they haven't been priced yet.”
LTE, we do know the interest 3 1/2%. IDCC had the cash to buy 2.5M shares ,pay off the 2024 bonds and still have about $200M left over. As Forrest Gump says stupid is as stupid does....
The 2024 notes were paying a 2% yield and a lot of those
will likely be refinanced. We don't know the yield of the
2027 notes because they haven't been priced yet. So
on the 2024 notes, I believe that IDCC pays roughly
$8 million / year to the bondholders. I doubt the yield
on the 2027 notes gets doubled to 4%.
Also, I don't know why it hasn't been mentioned here, but IDCC
will also use some of the proceeds from the 2027 notes to
repurchase up to $100 million in stock from some select
institutional investors - not on the open market. I don't
think that IDCC has done that before.
glen....im glad to hear you say that...you were always well informed on idc... i honestly dont keep up with idc nearly as much as the old days....any particular reasoning you can share with us?
And who in their right mind refinances to double the interest rate paid? Just doesn’t make any sense to me. Wish someone would explain it to me.
The Board could have bought every share of the 2.75M shares today with their $163M authorized buy back. That would have made 28M shares outstanding, no bond and $200M working capital. They must be dumber than a box of rocks....
jealmc79, They have to make 7% per year on the money after taxes for the shareholder to break even. Management has some serious explaining to do!!!!
Why InterDigital (IDCC) Might be Well Poised for a Surge
Zacks Equity Research
Wed, May 25, 2022, 9:20 AM·2 min read
Thanks to promising estimate revisions, InterDigital currently carries a Zacks Rank #1 (Strong Buy).
https://finance.yahoo.com/news/why-interdigital-idcc-might-well-162004549.html
Agree...have had the thought that our new CEO might be prepping the little flea for Q as a defensive play. I remember you'd alluded to same a few years ago when there were a bunch of Q folks walking the halls. Still think that could be a thing, or do you see a competitor grabbing it?
Liren Chen at Qualcomm.
For those who might not know, this shows that he had some very important
roles at QCOM. Having such a high role at Qualcomm Technology Licensing,
which has about $6 billion per year in royalty revenues, is a big deal.
He must see potential in IDCC's IP to take the job as CEO. The Apple
and Samsung renewals are due later this year - he knows IP very well, so
he must think that IDCC has a good shot at some solid renewals.
--------------------------------------------------------------------------------------------------------------------------------------
Lawrence (Liren) Chen is President and CEO of InterDigital, Inc. InterDigital unites wireless and video communication technologies and AI solutions into one of the world’s largest pure research, innovation, and licensing companies to solve many of the industry’s most critical technical challenges.
Prior to joining InterDigital, Mr.Chen worked at Qualcomm Inc, where he most recently served as Senior Vice President, Global Head of IP, Legal Counsel. In that role, Mr. Chen was responsible for overseeing Qualcomm’s worldwide intellectual property portfolio (patent, copyright, trademark, and open source) and led technology, business strategy, product management, and global eco-system development for Qualcomm Technology Licensing. Preceding that, Mr. Chen served in various IP and technology roles at Qualcomm, including as Senior Vice President of Engineering, Legal Counsel.
Mr. Chen holds 28 granted patents in the U.S. and over 120 granted patents worldwide. He earned his bachelor’s degree in Automation from Tsinghua University, Beijing; his M.S.E.E. from the University of Maine; his M.B.A. from San Diego State University; and his J.D. degree from the University of San Diego. Mr. Chen is a member of the State Bar of California.
https://www.6gworld.com/team/liren-chen/
Fish, Management and the Board have to be dumber than a fifth grader. The new bond at $400M costs $14M per year interest. They disclosed the placement fees at $9M. Hedges in the past have cost them $20M+. The total costs are $100M over 5 years ( about 65 cents per share a year) for something that shareholders do not want or need. They could have paid off the current bond in 2 years and still bought back the 1.2M shares for $75M with more than enough money left over.
Teecee- Nice to see you stop by! My first purchase of IDCC was in 1996, just before the Raging Bull days. I'm pretty sure that you were involved in IDCC then and I recall meeting you at several of the Annual Stockholders Meetings. I believe that 2022 will be more eventful for IDCC than anything since the license with Ericsson. JMHO
hi dave...still have a small position maybe 10% of what i had.....weve been through all the G'S...i still think our stuff is very relevant...especially as we move further and further away from voice...with chipmaking moving back to the US...i think we are a good buyout candidate in the space...
Good to see you here, TC. Have long appreciated your pov. I, too, am still watching for (hoping for?) a buyout. We'll see.
Great to finally see you pop in. Hope all is well.
hiya boyz...just checking in...saw the new deal....interesting that the markets are almost shut down right now and idc is able to get a deal done...doesnt look too bad to me...still looking for a buyout at some point...see the old gang is still here...looking back at the history of idc price movement...we tend to outperform in down markets....hope everyone is well,,,,tc
This Stock Just Broke a Cardinal Rule
By Dan Caplinger - May 24, 2022 at 7:36PM
The Motley Fool
InterDigital looks to modify its capital structure
Elsewhere, shares of InterDigital fell 8% after hours. The mobile and video technology specialist has seen its stock lose 25% of its value since this time last year, but it apparently decided it had no choice but to go to the capital markets now to raise cash in order to make changes to its capital structure.
InterDigital announced a $350 million private offering of convertible notes. The notes will mature in five years, and the interest rate on the debt and the conversion price into which bondholders can exchange their bonds for shares of InterDigital stock will be determined as part of the overall pricing process.
Part of the reason InterDigital is doing this now is to repurchase similar convertible notes that are coming due in 2024. In addition, the company wants to buy back stock as part of its authorized share repurchase program.
Yet investors aren't thrilled about InterDigital issuing a debt-equity hybrid with interest rates on the rise and the stock price on the decline. That's essentially the worst pricing environment InterDigital could have picked, raising the question of why the company waited until now to move forward with such a decision.
How much has all this borrowed money cost the company for all these years? And it’s sitting there doing absolutely nothing.
Another $100 million stock buyback was authorized on May 6th:
<<
Item 8.01.
Other Events.
On May 6, 2022, the Board of Directors of InterDigital, Inc. (the “Company”) authorized a $100 million increase to the Company’s existing stock repurchase program. The Board authorized a $300 million stock repurchase program in June 2014, which was increased to $400 million in June 2015, to $500 million in September 2017, to $600 million in December 2018 and to $700 million in May 2019. The latest increase brings the total authorization to $800 million.>>
http://archive.fast-edgar.com/20220524/AE2LM22DZZ2RV9ZZ2HJK2ZYSI3G9ZZ22Z242/d341132d8k.htm
They have 900 mil in cash, cash equivalents & investments and they are pulling this nonsense?
Well, I am changing my proxy vote for the BOD running for reelection.
I hope there are a lot of questions at the Annual Shareholder Meeting showing how the company can justify its actions.
Maybe they would follow it up with an increase in the dividend AND a special one--time dividend at the meeting.
JMO
The stock market reaction to this:
"Stupid As Phuck"
But then again, we are in a bear market!
Tomcat
Before these new notes, IDCC had just about $479 million in net cash in
the most recent 10-Q that was filed earlier this month. So if IDCC bought
back all of their debt, they would have that $480 million - so that's a nice
cash position particularly since their total market cap is currently $1.88
billion.
Part of these new notes will be to repurchase the old "2024" notes - which
are worth about $400 million in indebtedness.
We'll just have to see exactly how much of the "2024" notes that they
repurchase, but I'm guessing that their debt and cash position will be
roughly the same - and that's $899 million in cash and short term investments
and just about $420 million in total debts.
Hopefully IDCC can continue to generate (and increase) that healthy free
cash flow of $130 million last year and $150 million back in 2020 by
renewing the Apple and Samsung licenses.
Lastly, I'm a Rambus investor and they're not rolling out their debt - they have
about $172 million in convertible bonds and it looks like they're just buying
it back with their healthy cash flows of around $200 million annually.
Are they borrow money to buyback stock?
Can someone help me understand how this is beneficial again?
We already have a lot of cash on hand?
New notes - some for stock buybacks:
<<InterDigital expects to use a portion of the net proceeds from the offering of the notes, and the proceeds from the sale of the warrants described below, to fund the cost of the convertible note hedge transactions described below. The remaining net proceeds from the offering of the notes are expected to be used for the repurchase of a portion of InterDigital’s existing 2.00% senior convertible notes due 2024 (the “2024 notes”) in privately negotiated transactions concurrently with the offering of the notes, the repurchase of up to $100 million of shares of InterDigital common stock from institutional investors consistent with its recently announced $100 million increase to its authorized repurchase program through one of the initial purchasers or its affiliate, as InterDigital's agent, concurrently with the pricing of the offering of the notes, and for general corporate purposes, which may include, among other things, the repurchase, redemption or other retirement of any remaining 2024 notes. >>
https://ir.interdigital.com/news-events/press-releases/news-details/2022/InterDigital-Announces-Proposed-Private-Offering-of-350-Million-of-Senior-Convertible-Notes/default.aspx
Here here. Jim we are still here. Personally I am waiting to hear about the UK court determined Lenovo Frand License.
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