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Based on the activity of the stock I would say it is probably factual, IMO. TC sure is shortsighted.
Jimlur, how did Tom change his out look already? Is that BS or is it factual?
After Hours
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18:34 $ 33.04 500
17:30 $ 32.62 90,600
17:14 $ 32.99 168
17:11 $ 32.99 4,491
17:07 $ 32.99 4,491
16:50 $ 32.99 4,491
16:43 $ 32.99 2,546
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16:14 $ 32.7975 12,800
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16:00 $ 32.93 100
Anyone using Quotetracker and having problems?
I do not think that the patent you are referring to is being contested in the ITC.
The signing of Samsung just decreased the risk for many advisors. Tom Carpenter has now turned from "neutral" to "buy". How many others will be doing the same in the near term? This statement, by you, is one of the best I have read over the last few days from all posts regarding the deal.
At some point idcc won't be considered a high risk stock and the long term value will stabilize. Didn't think I would ever be able to say that. I feel very good about the investment. mo. .. nic
Jimlur: I respectively disagree again. When you say "paid-up" it intimates that Samsung will no longer have an obligation to pay royalties to IDCC for the use of IDCC's IPR beyond the year 2012, which is not the case IMO.
Jimlur: I respectively disagree with your statement. The only paid up license is for 2G single mode TDMA at the end of 2010.
The agreement also stipulates that IDCC is granting a license agreement to Samsung (WCDMA/CDMA2000 standards)through 2012. After 2012 a new agreement will have to be negotiated.
I am confused as are many others but need help in clarifying something if clarification can be accomplished.
"Subject to the receipt of Samsung's first payment due first quarter of 2009, the parties will move to end all litigation and arbitration proceedings ongoing between them."
We currently have three ongoing situations with Samsung:
1. ITC investigation
2. 2g for 2006
3. 2g for 2000-2005
The ITC will end based on this agreement and Judge Lukern will proceed and the case for this 3g dispute will be closed.
We never did see anything on the 2g for 2006 but we can assume that the ICC did provide figures to IDCC. Merritt did give a figure of about $40mm due from Samsung.
The current court action on the award for 2g for 2000-2005 was awaiting oral arguments. This is were my question comes to the front. If we end this litigation, does IDCC get the money (Samsung did post a bond), along with the $400 million going forward?
I believe Tom Carpenter mentioned the figure of $500m over the course of the contract (through 2012) in his analysis of the settlement. I guess, that based on this story, it is gospel.
It's baked in at .50 cents a phone.
After Hours Trade Reporting
After Hours
Last: $ 27.91 After Hours
High: $ 27.91
After Hours
Volume: 14,878 After Hours
Low: $ 27.33
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Time (ET) After Hours
Price After Hours
Share Volume
16:35 $ 27.91 9,060
16:27 $ 27.33 313
16:13 $ 27.33 205
16:12 $ 27.33 200
16:11 $ 27.3977 4,400
16:11 $ 27.3689 600
16:00 $ 27.40 100
At least we now know that the licensing side of the house is alive and kicking. Two new licenses in the last three weeks not including Samsung.
InterDigital Signs iWOW to Worldwide 2G and 3G Patent License AgreementLast update: 1/8/2009 4:02:00 PMKING OF PRUSSIA, Pa., Jan 08, 2009 (BUSINESS WIRE) -- InterDigital, Inc. (IDCC) today announced that its patent licensing subsidiaries have signed a non-exclusive, worldwide, royalty-bearing patent license agreement with Singapore-based iWOW Connections Pte Ltd (iWOW). The agreement covers the sale of wireless terminal units and infrastructure, including wireless machine-to-machine (M2M) devices, built to cellular Second Generation (2G and 2.5G) standards and Third Generation (3G) standards and to non-cellular wireless IEEE 802-based standards, through 2015. iWOW designs, manufactures, and markets an extensive wireless connectivity product line for the machine-to-machine market using GSM, GPRS, and 3G technologies. The company's highly scalable embedded modules and ready-to-use modems address a wide array of applications in the emerging M2M market. "This new agreement with a M2M company expands InterDigital's licensing coverage and allows us to participate in one of the fastest growing segments of the market," commented Lawrence Shay, President of InterDigital's patent subsidiaries. About InterDigital InterDigital(R) designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G, and 802 products worldwide. Additionally, the company offers a family of SlimChip(TM) high performance mobile broadband modem solutions, consisting of Baseband ICs, Modem IP and Reference Platforms. InterDigital's differentiated technology and product solutions deliver time-to-market, performance and cost benefits. For more information, visit: InterDigital is a registered trademark and SlimChip is a trademark of InterDigital, Inc. SOURCE: InterDigital, Inc.
InterDigital, Inc. Media Contact: Jack Indekeu, +1 (610) 878-7800 Email: jack.indekeu@interdigital.com or Investor Contact: Janet Point, +1 (610) 878-7800 Email: janet.point@interdigital.comCopyright Business Wire 2009 Copyright © 2009 MarketWatch, Inc. All rights reserved. Please see our Terms of Use.
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SS, like the hedge fund run by Madoff, is a ponzi scheme. It relies on those behind the current receipients to keep it solvent.
I was expecting a higher number also especially with Apple supposedly reporting this month unless the bottom just fell out of the Japanese market (possible?) or Apple has a really low rate as initially indicated by our analysts. But then I had a thought...maybe we received the upfront payment to provide IDCC basic compensation for phone sales without a rate being established (to be filled in later) but based on the rates of Samsung or Nokia. Just a thought.
Jimlur...What everyone seems to be forgetting is that there would be an obligation to square away all the 2G issue not only from the ITT/courts 2000-2005 and the 2006 estimates, collectively totaling nearly $200 million, but what about the sales for 2007-08. I would think that would easily eclipse another $50 million. Add in the monies for past 3G and you may be looking at nearly $400 million due for past sales. How much will be forgiven for a 3G license going forward? That's the real question.
Possibly the reason the street did not get more excited about the "binding term sheet" and ergo our share price not reflecting the share price we would expect with a deal with the #2 cell phone manufacturer. Ambiquity.
DD...sorry, should not have used an unsubstantiated number concerning the chip business. Gleaned that number from another poster whose number was conjecture. Don't want to confuse anyne here. However, not sure you can say we haven't sold any chips, either.
Good analysis and you are being conservative. One thing that you might want to incorporate in your figures for comparison is the product development expense money IDCC spent in 2007. I think those numbers were as significant as the legal fees from what I recall. Also selling the chip unit for $100 million. No matter which way you slice it, within one year we should be at $100+.
Can somebody explain that 24.03 for us dummies. I assume it has to be some option or short player who needed to cover a bad position.
I agree that when the filing to dismiss is submitted, we can cross that off the list. But they were going to lose that appeal anyway.
I would have liked to have gotten the Judge's decision also. That would have ended some speculation. Now we have a "binding term sheet" and the agreement won't be signed for 45 days. More wiggling possible? That's what I think the street sees.
Grones,
I agree...we are way undervalued. But there always seems to be another hurdle for us to jump.
IF TC's estimates assumes a rate of .50 cents per phone IDCC's quarterly recurring revenue will rise to approximately $85 per quarter and an approximate EPS of $.51 or $2.05 annually (using no decrease in expenses in the formula).
But, if you use the following per phone revenue the numbers change considerably.
.50 85 million $ .51 $2.05
.75 96 million $ .70 $2.81
1.00 109 million $ .89 $3.56
1.25 121 million $1.08 $4.31
1.50 134 million $1.27 $4.07
1.75 146 million $1.46 $5.82
With the typical ambiquity of IDCC's press release I can understand why there is not a stampede to purchase shares in IDCC. With a PE multiple of 10, IDCC is worth anywhere between $20.50-$58.20. So what is one to do? Are we over-priced or still under-priced. I guess we will learn in 45 days.
Tomorrow's share price is difficult to call. Although we have an agreement there is still much to question (is anything ever easy for IDCC). Did we give up future 2G payments, as in the past? Did we forgive the Sam ARB monies? or partial? What are the 3G rates? Did we forgive past 3G monies that would be due? Is there any true up monies? We have two payment options....what are the payment options? Lump sum (fixed fee)? As in LG three payments to cover the five years? or Recurring revenue on sales per quarter? When is the first payment....early in 2009? How early? January? Feb?....And most importantly, how much is the payment?
The market will be cautious so as not to overstep. As what was said in the PR, "everything is settled". That means there is no court date on Dec 17 for the $165 million. Also means, that we will not see the figures for 2G 2006 sales. We will not see the ITC report. Too many questions and not enough answers yet.
What I am happy about is that we are now in only one fight and in one jurisdiction.....Lukern's. Legal costs should plummet and the share price goes up...at least until another fight opens up in five years. But this is my last fight. SMILE!
2008
2009
2010
2011
2012
=
five years
gatticaa....Yes, the chart is inspiring. As I said, Tom Carpenter always has been conservative. If he had been using the presentation chart as a guide, his target price would be doubled, tripled or quadrupled from where they are now ($36).
Jimlur,
Absolutely a decrease in legal expenses has to be considered. Don't have the exact figures handy but we are talking at least $1 per share of earnings lost due to unneeded legal expenses thanks to our friends. Now, the avoidance of those legal expenses topped off with the additional revenue by Samsung will add considerably to the bottom line (and it is considerable).
There is still much to learn from this agreement such as; the recurring revenue line, advance payments, past due monies, etc. But it is all good.
I am anticipating our next quarterly guidance, not because of Samsung, but because of Apple and Rimm. If their numbers are in line with the WM's strategy then our next quarter should be the best ever for IDCC (discounting those qtrs with one time payments). And then the following quarter you pile on with the Samsung money. Can you say $100 million quarterly recurring revenue? We can only hope.
Tend to agree with you on your statements. IDCC (based on the Samsung agreement, and a nearly 100% guarantee that Nokia will sign within the year) is a sure double (or higher) in share price. How many portfolio managers would love to tout that in their annual report?
There is mucho money out there looking for a good stock.
PS: We need a dividend!
I was thinking in terms of recurring royalties going forward. But yes, Samsung is on the hook for about $200 million in past sales based on the ICC determinations (Sam I, II, & III). However, that being said, we have no idea if IDCC may have used those monies in the negotiation as a catalyst to get the deal done. But then again, WM said that Samsung has two payment options to solidfy this agreement which leads me to believe that much of the past monies were not forgiven. Must be a huge amount of money with past sales, downpayment on future sales, interest, less discount, etc...JMHO
Carpenter's estimates are very conservative (.50 cents per phone) but I think he does include all G's. But I don't see IDCC getting 400-500 million over the next 5 years. Based on what WM said in the press release, the agreement is favorable to IDCC and meets their strategy. To me that means a minimum of $1.00 per phone and a max of $2.00. JMHO
One thing under consideration here for Samsung, is that the S. Korean currency (won) has fallen considerably against the dollar and is projected to fall considerally more. With the slowdown in worldwide economies the flow of dollars to Samsung probably has been on the decline and coupled with the declining "won", they probably felt they would be better off settling now rather than later.
Samsung is the #2 cell phone maker with about 16% of the market. Based on IDCC's presentations we should now be collecting on 50% of the 3G market.
Taxes, yes....but offset by decreasing legal fees.
After Hours Trade Reporting
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Last: $ 26.45 After Hours
High: $ 26.50
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Volume: 21,743 After Hours
Low: $ 23.7027
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17:01 $ 26.45 400
17:01 $ 26.50 906
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16:28 $ 26 100
16:25 $ 25.4235 9,200
16:21 $ 25.38 100
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16:19 $ 23.7622 100
16:17 $ 23.7027 900
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16:12 $ 25.6835 1,043
16:12 $ 23.7027 800
16:12 $ 23.7027 1,000
I wonder who blinked first? The share price in the next few days may determine who did. If we got our rate then we will climb significantly higher.
I would surmise volume is related to options.
None of the discussions on the value of IDCC has mentioned Nokia.
1. Samsung settles before ITC issues opinion: Price $35+.
Nokia will delay until after their trial.
2. ITC issues favorable decision for IDCC. Samsung settles after decision rather than risking ban: Price $50+. Nokia has now lost any leverage in negotiations and will likely sign rather than incurring Lukern's rant...."Why are you here".
It has been screwy all day. Level II has been continually behind the bid/ask and vice versa.
There was a lot of activity on the bid side which were taken out because the market was in a downdraft. Someone was buying heavily all the way down. I think those AH may be true AH trades and not late reporting. JMHO
San Antonian here also.