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Anyone else think that this anti-trust suit is an excuse for Barry to say no to the ban, if the commission votes to uphold the ALJ? MSFT sure seems cocky that there won't be a ban in the end.
Where do we stand on the conversion requirements and won't that add in 4.5 mil shares to the equation? TIA
Now you guys have me completely confused. I thought this was a trial on the patent that was pulled from the trial that was concluded last October in IDCC's favor on three patents. This would have simply added a fourth patent to the award's trial-so it is the same as if the original jury would have voted for infringement on 3 patents and no infringement on 1 patent! The net result is that ZTE lost on 3 patents and a jury will decide the monetary award. Please correct me if I am wrong. TIA
IMO-For the large OEM's, this has always been about the NPE business model, and a process has been in place to destroy, discredit, delay, or at least control that model. Since IDCC has been the poster child for wireless NPE's, we have born the brunt of this coordinated effort. I believe that the strategic alternative was not successful for this reason. Nortel's auction went into the stratosphere, followed by Google's Motorola response, and if IDCC became a bidding war, then this would validate the NPE model for others. So far, these large OEM's have been able to control things with an unbelievable success rate at the ITC, which will now require a new strategy by IDCC. Arbitration seems to be the method of choice for the industry, and I am sure that, at least from the perspective of the major players, this will yield lower rates. Controlling this model through political pressures has been successful, so the margins going forward will probably be less for NPE's. By making adjustments to these new realities, IDCC can still be a viable and profitable player in wireless. With M2M increasing in value and the solutions IDCC has been offering to make wireless more efficient, IDCC is adjusting. When IDCC gains more traction, expect the final piece of control to fall into place, and that is a buyout at a price somewhere near the convertible bond.
I agree. The next 2 years will be very interesting and I expect that a bid will be made for IDCC with the put price being above the convertible bond price. With that being said, we should see at least a 50% increase from today's price, just to get into a range that justifies a bid of $60-$70. JMO
Microsoft is not going to spend $7.2B and let a bunch of finnish numbnuts negotiate a license going forward with IDCC. With the 613 in our back pocket and a decision on the 800 days away, I would think that IDCC and MSFT are at least in discussions regarding a license. Assuming the deal goes thru between NOK and MSFT, it will be see you in Delaware for IDCC and NOK, to determine past liabilities. Unfortunately, getting a dime out of Nok may take several more years, but MSFT simply cannot allow any product ban to take place, particularly after the Nok deal closes. JMO
Even better-let the bidding begin!
To me, this sets up a simple solution. I would not be surprised if msft instructed nok to appeal domestic industry to the SCOTUS, knowing that an official turndown would pave the way for IDCC to be in play. Nok purchases infrastructure patents from IDCC and MSFT buys out IDCC, with over $1 billion in cash on the books, so $70 would not be out of the question. Win, win, win for everyone, unless you are in the $200 camp. jmo
IMO-The ITC has a perfect opportunity to push back on their authority to issue a product ban on an SEP infringement, by utilizing the President's own criteria, in the remand of 613. It all comes down to FRAND and I can't believe that the commission couldn't establish a well documented history of FRAND offers by IDCC. This is as blatant as it gets as an example of when a ban should be issued and would establish a counter balance to the Apple decision regarding SEP infringement.
Are the patents on remand in the 613 SEP? tia
Make no mistake-the next 3-6 month period is crunch time for the viability of InterDigital's business plan. The willingness of the commission AND POTUS to institute and uphold a product ban due to infringement of patents owned by an NPE, is the crux of the entire strategy. We now have an after appeal and a before appeal case to be decided by the commission. Hopefully, there will not be a bias against NPE's, and the ITC along with the President will uphold its' duty to protect an American company when patents are infringed. If both of these cases do not produce a ban, then this venue is worthless and a complete waste of money and time. I don't know what plan B is, if neither of these cases is favorable, but going private may be one of management's options. Hopefully, we win and licenses become plentiful to fulfill BM's 800 mil revenue projection. We are at the crossroads where business as usual will not be tolerated if unsuccessful in the 613 or 800 cases. JMO
There is an unquestionable bias against NPE's and because PE's cannot counter sue to ban, the ITC has become nutless in its initial determinations-Luckern basically admitted as much. Utilizing the fear of a product ban to negotiate a license, has been rendered worthless in the short term. jmo
Seems to me that the ITC has taken a stance that when it is apparent that the case will go to the CAFC, they do not want the respondent punished with a ban during the appeal. I believe that is why we seem to get these convoluted decisions from the ALJ. jmo
Thanks Postyle for putting this in proper perspective. I realize that Mueller has a different agenda. Do you have any guess as to what our SEP would bring under a court ordered FRAND with this recent judgement providing a backdrop as to reasoning and calculation? Looks as if the patent holder received 1/20th of what was asked and that is troubling. Somewhere, and I can't remember where, there was mention of probable frand rates for SEP settling in the $.50-.60 range. Thanks again regarding the .035 rate-it had me very worried.
This is very disconcerting regarding the extremely low frand rate set for SEP. Three and one half cents for wireless technology???? Icahn surely took Google to the cleaners. JMO
If IDCC consumated a patent sale deal or a license deal prior to the end of the first quarter, how long does the company have to report such a deal? I know that in the past, the company has been very conservative regarding when it releases news, but there must be some mandated time frame if the company wants to recognize earnings in the first quarter. I am stunned that the board chose to issue a special dividend of $1.50, without being very sure that the coffers would be replenished soon. Hopefully, we will hear something soon that will prevent a first quarter loss. TIA
M3S-This has been the case for quite some time, but doesn't justify the timing, which is very early compared to other quarters, since they adopted the quarter lag. Maybe I am making too much of this, but you just don't wake up one day and say this is a great day to offer guidance and kill a rally. I also don't think it was in reaction to HTC, because that too was a known. Something is very odd about this timing, so I guess that I am hoping it was a rational decision. Maybe we will get some news before the upcoming conference call that will justify their timing. If not, then I'm sure there will be questions asked. IMO
The puzzling part of yesterday's announcement wasn't the projected Q1 results(the handwriting was already on the wall), but the timing of the guidance is bewildering. WHY NOW? Management has sole discretion whether to even provide guidance and then certainly when to issue to best serve shareholders. They decided to issue into the teeth of a nice rally. There has to be some sort of rationale for giving guidance with over a month and a half left in the quarter, without the exact 4th quarter results having been released. Some have mentioned softening up the price for a private equity bid, but I doubt that scenario. The only reason that I can think of, is to issue a more accurate baseline, before some add ons that they feel will be announced before the end of March. Otherwise, the timing of this guidance would show a complete disregard for the shareholder. I hope some positive news is right around the corner, because this is becoming downright depressing.
FWIW-Since no one knows where we are in the SA process, except that we are approaching the 5 month mark, it seems improbabale to me that business as usual is even an option. To me the default option is going private at a price north of the bond conversion provision. I believe that this is the floor price that IDCC would accept, but only if it was allowed to continue in tact as a going concern. The bond coversion price wasn't picked out of thin air, and I wouldn't be surprised if Evercore/Barclays has a private equity group lined up to go private if negotiations don't meet the asking price of IDCC. I also wouldn't be surprised if a part of the holdup in negotiations, is keeping the company in tact as a wholly owned subsidiary or the like. However this plays out, I can't see Evercore/Barclays coming out empty handed, and if the current wireless players are foolish enough to let this go private, then they will get exactly what they deserve. JMO
So when do you think bids were received by the company, that would allow any options to be considered? What media leaks are you talking about that paints a different timeline?
To put this process in a different perspective, let's say IDCC waited to announce its' strategic alternative till Sept. 16th, saying that for the past 2 months companies have been contacted to guage interest in the company and to provide them with the appropriate information to do their due diligence. Initial bids would be due Sept 23rd. The point is, the strategic alternative for IDCC is only 3 weeks old, not 3 months. To expect that this thing would be signed, sealed and delivered in this 3 week period, is unrealistic in my opinion. The fact that the process is still ongoing, is a sign that a bid is either very close to IDCC's threshold, or has passed this threshold value and is in a heated battle between 2 or more entities. JMO
Fijas-It may not necessarily signal anything, but there must have been a plan B for the use of the cash that they raised and the ROI to private equity looks like a no brainer. JMO
AMCJAX-I am not saying that management would not accept a higher bid, only that having private equity in the bidding process, would be a good threat to other wireless players-think lawsuits and paying license fees outside of cross licensing for many years to come. The reason I put this out as a possibility, is because I think that it is very logical to believe that this is one of the alternatives and will result in a very favorable sp. IMO
Obviously we are all just guessing as to what this strategic alternative will bring, so here goes my 2 cents worth. At this point we are probably down to 2 or 3 entities bidding for the company. IMO, the ideal scenario from InterDigital's perspective, is to keep the company intact, either as a wholly owned subsidiary, or as a going concern under private equity ownership. I don't think that business as usual is in the equation. The opportunity for private equity to offer a compelling price could never be better. Money is historically cheap, and this company has a lot of cash and no debt, with on going cash flows. They could embark on a sue 'em and sign 'em campaign for several years, without the encumberances of public ownership, and then offer an ipo that would make this deal look like printing money. When the convertible bond was issued, the first thing that came to mind, was LBO, and I think that this is definitely one of the options being considered, and one of the remaining entities still bidding for IDCC. JMO
IMO-The wireless industry has been handed a golden opportunity. They have watched a baby q-com grow into a teenager(3g), as attempts to kill the child failed, and have now been given a free look at the impressive credentials of a powerful young man, who if allowed to continue on his Long Term Evolutionary path, will be extracting expensive stud fees from the entire group. These fees, dropping to the bottom line, could create a giant that would cost many multiples of today's price to take out. So, does the industry as a whole, pass up this friendly takeover opportunity and continue to pay for many g's to come, or are they smart, and realize what a great opportunity they have been given?
How much effect will options,mm's,short interest,and the technicals have on the auction market?-Oh, that's right-NONE!
Ask yourself one question: With the wireless industry in cosolidation mode and an emphasis being placed on patents, do you think they will pass on an opportunity to take out the NPE with the strongest LTE portfolio?
The sure sign that you hold something of great value, is when naysayers come out of the woodwork with articles and posts trying to downgrade the value of your stock. Just ask yourself, what is the motive behind these articles, and the answer surely is not an altruistic one.
Will good things come in 3's. Bond win, strategic alternative, and CAFC win or settlement? Had to laugh to myself when I saw the good news today, because I finally got something right-see posts 284945 and 295114. Kudos to mgmt, the timing is perfect!
So, Mr. Elop, the ball is in your court. Do you risk another black eye headline that could read-NOKIA FACES POSSIBLE BAN OF ALL PHONES IN U.S.A-after a CAFC decision, or do you push for a settlement before the court rules? A prudent CEO, that has put all his eggs in one basket, would not let an economic dispute that is relatively small in scale, disrupt the most important rollout of phones in company history. The irony is that your company Nokia, through its' bullying tactics, has managed to delay this proceeding and put you up against the timeline wall. It is time for new thinking at Nokia, so don't act like your predecessors, be creative and look for ways that IDCC can help your company with their innovative ipr. The clock is ticking and a settlement now can be spun as a positive, but if you lose at the CAFC, spinning the inevitable settlement will be a tough sale. JMO
Rumor on cnbc says microsoft to buy nokia handset business for 19 billion. Can't imagine spending that much money and launching handsets in fall, that Elop wouldn't want to clear up IDCC mess. Elop will be on cnbc at 3:15 eastern today.
This seems like a perfect time for a settlement announcement with Nok. Elop knows that IDCC will be strengthening its' LTE portfolio soon and with it goes a rate increase, so putting together a 3g/4g license before a potentialy damaging court decision regarding 3g, allows Nok some leverage and puts a cap on its' costs going forward. Nok is also aware that IDCC may be in play after it executes either procuring Nortel patents or its' plan B. By negotiating a 3g/4g license NOW, Nok creates a better cross licensing margin, with a company that may buyout IDCC, such as Apple. Elop has put his entire reputation and position on the line with his Microsft deal, and I would not be surprised that the deal stipulates settling with IDCC, before a damaging court decision creates negativity and doubt moving forward. Looking through rose colored glasses, maybe the court has already been aprised of a deal and all the contracts are being drawn up.JMWAG
Agree-I think that the Elop factor is a game changer in how Nok will negotiate prior to/or after the CAFC decision. Old Nok would have taken this as far as it could, but I can't see Elop letting this dispute about rates with IDCC, define his regime and sabatoge his deal with Microsoft. jmo
Nic-Seems as if IDCC's strategy is to get the headline distorting drop in s/p out of the way early. Three major events that should be positive are on the horizon and all should occur during the second quarter. IMO, The Nortel patent auction may be the event that is holding up the LG license. Whether we get the patents or not, the event will be a positive for IDCC. I'm sure IDCC has a plan B for the capital it raised and what about that San Diego office-there has to be more to that story. This is shaping up to be the most monumental quarter in IDCC history-good luck to all. JMO
Question for the board: What factor(if any) does the possibility of IDCC being bought out, for instance by aapl, play in nok's decision on whether to settle now and possibly for 3g and LTE?
Ignoring history can lead to even bigger trouble, but we agree that we both don't think it will go to a decision, and hopefully we won't have to find out who is correct. To any new readers, the impression would be that our current price reflects a loss and my opinion is that it does not. There is more to the pe problem than the nok itc decision. Hopefully, it is onward and upward from here, with a bunch of good news before the year is out. This is my last comment regarding this issue and I think balance is always good in discussions. jmo
A loss at appeals would not only effect near future revenues from nok but also eric and mot and probably have an effect on negotiations with lg. I don't think that the appeals outcome is behind this runup, nor do I think that qtr 3 results and dividend announcement is the reason we are near $34 from $25. IMO-there was a steady accumulator that moved us up. The speculative premium is back, but to say that a loss at appeals is already priced in, I think you are dreaming. We will get b-slapped big time, but I think the possibility of a buyout offer is what will be our salvation. Again, I don't know any more than you, but based upon previous setbacks, we are not treated kindly by the manipulators. I would prefer that you are correct, but I doubt it. jmo
Nok's decision to risk embargo has always puzzled me. What was it that gave them the confidence to not settle before the alj decision? Several ideas have come to mind and may hold a clue as to how they will proceed with the appeal. Number one, something made them very certain that the decision was going their way, and to me it seemed very odd that an alj would make a comment that this would go to appeal. Now maybe this is an obvious observation by the alj, but with the staff already on nok's side, the comment on appeal would seem to be a signal that the alj was not comfortable issuing an embargo while an appeal was carried out. The question now becomes what do nok's attornies think of the claim construction that the alj used to justify his decision? Will they risk a certain embargo on a very narrow claim construction and give negotiating power to IDCC to push for a higher settlement? This really is a pricing dispute and nok knows that it will have to license sometime. No longer is it the mighty nok vs. a weak IDCC, so it would seem to me that the rational strategy would be for nok to strike their best deal before a decision is handed down at appeal. If they are close now in their negotiations, then maybe settling before Dec. 9th is a possibility. However, my guess is that they proceed with the oral hearings before coming to a deal. The caveat is: NOK is not your rational company and always seems to have another cat in the bag. The risk/reward pucker point is coming very soon for nok, let's see how strong a sphincter the new management team has. I will disagree that a loss at appeals is priced in to our current sp. jmo
Great news-can't wait for the cc. Have to admit when i'm wrong, thought the horse was dead(dividends) when it was only napping. Will be very interesting to see the effect this has on the monkey business we have all had to endure over the years. Sure hope this is a signal of more good news on the way.
The analysis of IDCC in this report was not only well written and reasoned, but also unique in the metric that it used to value the company. Is it a coincidence that this report used enterprise multiple as its' primary evaluation method, when this method is often used by acquirers to establish a bid? Maybe IDCC management took a pro active approach by engaging an outside investment firm to analyze the stock and interject some speculation into the share price. Viewing the company from an acquirer's standpoint, imo, unlocks value that wasn't present in the traditional metrics of other reports. The report was very conservative, particularly in valuing the LTE portfolio, so there is plenty of room beyond $48. This couldn't have come at a better time for shareholders. JMO-thanks m partners and jim.