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Could this be the reason they are a little tardy in getting the revenue guidance out? Maybe they are waiting the full 45 days to come to terms on the amount Sammy owes for 2006 and we can hope they are near resolution and they will include these numbers? I know I am reaching (especially since Loop previously said this is a non event and typical) but since there is nothing else to discuss, let's start some speculation until the PR comes out. Keep your fingers crossed, 45 days is this week.
On July 16, 2008, InterDigital received notice that the arbitral tribunal issued a Partial Final Award finding that Samsung is not entitled to an adjustment of its royalty obligations based on the Nokia Settlement. In light of this decision, the arbitral tribunal ordered the parties to report within 45 days following issuance of the Partial Final Award whether an agreement has been reached regarding the amount of royalties Samsung owes for its 2G/2.5G sales in 2006. If the parties are able to reach an agreement, the tribunal will order payment of the stipulated amount. If the parties are unable to reach an agreement on the amount of royalties Samsung owes for its 2G/2.5G sales in 2006, the parties will need to present evidence and/or argument in a further phase of this arbitration.
This could bode well for the quarterly earnings:
Mobile-phone sales rose 12% in second quarter: Gartner
By Aude Lagorce
Last update: 7:13 a.m. EDT Aug. 27, 2008
LONDON (MarketWatch) -- Worldwide sales of mobile phones rose 12% in the second quarter, research group Gartner said Wednesday. Sales of handsets in the mature markets of Western Europe and North America slightly recovered after a difficult start. Western Europe reached 42 million units and North America surpassed 44 million units. Still, Carolina Milanesi, research director for mobile devices at Gartner said that the economic environment continued to hurt mobile phone sales in both mature and emerging markets. Among the mobile-phone makers Nokia Corp. (NOK) remained top dog with a market share of 39.5% in the quarter. Samsung came in second place with 15.2%, followed by Motorola, Inc. , with 10% and LG with 8.8%.
Will today be the day we get revenue guidance? How long does it take to add up a few numbers? We are overdue for guidance IMO and the PR could come at any time, keeping my fingers crossed that it is a good quarter.
That's good to hear that it is possibly the network and not Infineon's chip with IDCC inside. It is bad enough that some believe it is the chip in our coming out party but if more data comes out showing it is the networks themselves instead of an "immature" chip as some analyst said, it would be good news. Let's keep our fingers crossed that we never get blamed for this.
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A report on the iphone from Gadget Lab .
In our view, this data is a strong indicator that performance of the mobile carrier's network is affecting the iPhone 3G more than the handset itself. This also furthers our thesis that it's highly unlikely that Apple is going to wave a magical wand and say, "3G problems, be gone," with a software update. Before Apple can make such a claim, it needs to wait for all of its carriers to optimize 3G network behavior -- in terms of number of towers, how they're positioned and how much bandwidth each tower can handle.
More to read on the subject at.
http://blog.wired.com/gadgets/2008/08/global-iphone-3.html
Looking at Tom Carpenter's report, he is estimating that for the full year he expects IDCC's recurring revenue to be $240 million and so far we have had actual revenue of $109 million, leaving 130 for the remaining 2 quarters. Looking at Davenports report, they are estimating $58.8 million in total revenue.
If you take what Tom Carpenter is expecting for the remainder of the year and divide it by 2, he is estimating $65 million per quarter average which is much higher than Davenport and much higher than we have earned to date in recurring revenue for a quarter. If he is correct and we report 3rd quarter revenue this week exceeding $60 million I believe that will be another positive catalyst. I don't know from TC's report when he is expecting the other $130 to come in but anything above $60 million for the quarter will be a very good thing IMO.
I don't know what other analysts are expecting but hopefully TC is correct in expecting recurring revenue to average $65 million/qtr from existing licensees. Any new agreements will be a bonus. I think we should be hearing the revenue projections as early as tomorrow or any other day this week. We are overdue IMO. Let's hope the strength continues in the stock. Good luck all, the light at the end of the tunnel seems to be getting brighter all the time and for once it doesn't appear to be an oncoming train.
The often repeated statement that at some point there will be only 10 individual investors in IDCC has always been idiotic. Why anyone would actually think that ANY public company would ever have only 10 individuals owning it unless it was a penny stock is ridiculous.
At some point, I hope the stock has gotten so high that there are only 10 remaining investors from our group because we have had the mother of all selling opportunities, but when that happens those individuals that have sold will be replaced by many other individuals. If not, the stock price will never get to the heights we all dream about.
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Jimlur.. Understand your point, but kind of wish numbering would have stayed on for awhile. Pretty much destroyed the myth that since there were few posters lately that many longs might have left the stock.
It was very interesting to note that some members have been in ihub since 2003 rarely post, but evidently check the board regularly and are invested in the stock. How about matt2237 being in idcc for 24 years with only 70 posts since 03. That averages 7 or 8 posts a year.
Gbn1938... 36 posts, ron20748... 28 posts, ivorykeyer... 5 posts, od256... 20 posts.... Then there's dmiller with 3,745 posts. Sorry dmiller.... Anyway, all have been with ihub since Jan 2003 and I imagine have many shares. Nice to see unfamiliar names. .. nic
Thanks, now if the company can only issue very good financial guidance today or next week to coincide with the time frame in your post, it could make that breakout you mentioned. If it were a wedge instead of a pennant, would that be considered a bad thing for chartists?
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Looks more like a pennant than a wedge to me, and this is a good thing.
From www.investopedia.com/terms/p/pennant.asp - "A pennant is a continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with converging trendlines, the pennant, followed by a breakout movement in the same direction as the initial large movement, the second half of the flagpole."
(Chart)
"As can be seen in the above picture, there is a large rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend."
"Investopedia Says... Pennants, which are similar to flags in terms of structure, have converging trendlines during their consolidation period and they last from one to three weeks. The volume at each period of the pennant is also important. The initial move must be met with large volume while the pennant should have weakening volume, followed by a large increase in volume during the breakout."
Looking at Worden Brothers TC2000 charting software, the initial movement, "the flagpole," occurred on 7/31, when IDCC popped 11.6% on huge volume of 2.77 million shares, the fourth-largest volume day of 2008. Thursday, 8/21 saw the lowest trading volume in IDCC in over 6 months, since 2/19/08.
From www.traders.com/Documentation/RESource_docs/NoviceTraders/Wedge.html - "Wedges should not be mistaken for pennants, which are much shorter in duration. A rising wedge is usually at least three weeks in forming and lasts approximately three months, perhaps four months in all."
The pennant is now three weeks old. If the pennant holds true, the "breakout movement" is imminent....
Is that a good thing or a bad thing?
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FWIW. Watch the wedge.
How much in kickbacks do you think the members of the CFTC are getting when they can make comments like this:
"To date, the CFTC has found that supply and demand fundamentals offer the best explanation for the systematic rise in oil prices," CFTC spokesman R. David Gary said, reading a statement that had been crafted by agency officials. "Regardless of their classification . . . the CFTC's market surveillance group scrutinizes daily the positions of all large traders, both commercial and non-commercial, to guard against market manipulation."
It has been obvious to this amateur investor since the prices started rising that the whole rise is caused by speculators. The same type of people who drove the price of internet stocks, the same type of people who drove the home prices and now commodities. You don't have to be a genius to understand there aren't any current gas lines, every year there has been increased demand, there has always been instability in the middle east for the past several thousand years, there have been hurricanes in the gulf since the end of the ice age.
So when the people who want prices to stay high use all of the above to explain why oil is up from $30 a barrel just a few short years ago, you know they are making excuses to keep the status quo for some reason.
It is disgusting that the president and congress are allowing the speculators to siphon off so many billions and billions of dollars to go mostly to countries who want us dead. They could end the speculation so easily which would make the speculators lose a ton. I guess they would rather the American taxpayer to lose every day instead of those who are lining their pockets. One day these speculators will be out of the market or change their bets and the prices will plummet. How much pain does everyone have to endure before that happens?
Sorry for the rant but this is disgusting and the politicians are either unbelievably stupid or they have their pockets open wide accepting contributions from those who don't have America's best interests at heart. You decide.
DR, thanks for sharing your thoughts. Let's see how it all plays out. What we need are licenses with the phone manufacturers. Hopefully management will get us some soon.
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MO, the original platform that our blocks are used in will survive through the normal course of that particular product's life - going forward in the roadmap I would expect our design won't be used as that capability is within the JV and they have no desire to pay outside for it.
You need a scorecard to keep track of what is happening with the chip players. How does this impact us? Let me see if I remember this correctly.
We have/had a license with Philips. Philips is purchased by NXP, did the license transfer? NXP is purchased by STM, again what happened with the Philips license? Now STM forms a JV with Ericy, what will happen to the original Philips license? Will this help in getting additional royalties from the sale of chips? Is it likely that our original Philips license will survive all of these changes?
Have I totally messed up what actually happened and is the above series of events incorrect and this post is totally off base LOL? If it is totally off base, Jim please delete it.
Ericsson and STMicroelectronics to create world leader in semiconductors and platforms for mobile applications
http://www.ericsson.com/ericsson/press/releases/20080820-1244729.shtml
August 20, 2008, 08:00 (CET)
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC) today announced an agreement to merge Ericsson Mobile Platforms and ST-NXP Wireless into a joint venture. The 50/50 joint venture will have the industry's strongest product offering in semiconductors and platforms for mobile applications and will be an important supplier to Nokia, Samsung, Sony Ericsson, LG and Sharp. The fabless joint venture will employ almost 8,000 people with pro-forma 2007 sales of USD 3.6 b. ST is expected to exercise its option to buy NXP's 20 percent of ST-NXP Wireless before the closing of this transaction.
I can't wait until the halt actually happens and then we will need to know what the codes mean from the nasdaq site which are shown below. This site also shows history and you can search individual stocks apparently. I did a search on IDCC and nothing was found. It must have been a problem with DJ?
http://www.nasdaqtrader.com/Trader.aspx?id=TradeHaltCodes
The schedule of trading halt codes below identifies the reason for which trading in FINRA®/CQS securities is halted. When an issue resumes quoting, the code will change. Listed below are the trading halt code identifiers and a description of what each represents:
Trade Halt Code Trade Halt Description
T.1 Halt - News Pending
Trading is halted pending the release of material news.
T.2 Halt - News Released
The news has begun the dissemination process through a Regulation FD compliant method(s).
T.3 Halt - Resumption Times
The news has been fully disseminated through a Regulation FD compliant method(s); or NASDAQ has determined either that system misuse or malfunction that caused extraordinary market activity will no longer have a material effect on the market for the security or that system misuse or malfunction is not the cause of the extraordinary market activity; or NASDAQ has determined the conditions which led to a halt in an Exchange-Traded Fund are no longer present. Two times will be displayed: (1) the time when market participants can enter quotations, followed by (2) the time the security will be released for trading. All trade halt and resumption times will be posted in HH:MM:SS format.
T.6 Halt – Extraordinary Market Activity
Trading is halted when extraordinary market activity in the security is occurring; NASDAQ determines that such extraordinary market activity is likely to have a material effect on the market for that security; and 1) NASDAQ believes that such extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting or execution system operated by or linked to NASDAQ; or 2) after consultation with either a national securities exchange trading the security on an unlisted trading privileges basis or a non-NASDAQ FINRA facility trading the security, NASDAQ believes such extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting or execution system operated by or linked to such national securities exchange or non-NASDAQ FINRA facility.
Somebody at DJ has their symbols mixed up apparently. That is weird.
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Now they say that trading has resumed
Here is a site that lists trading halts and unfortunately IDCC is not on it. One day it will be but I guess the DJ was a little premature.
http://www.nasdaqtrader.com/Trader.aspx?id=TradeHalts
Jim the company has said numerous times that the agreement goes through 2006 and you can be certain we will not collect any more 2g revenue from Sammy once this whole saga is finally over. They piggy backed off the Ericy agreement which then triggered both Nokia and Sammy to the same time frame. It is disgusting that binding arbitration could go on for over 5 years, and still counting, YUCK. What a system.
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When they pay up they will probably get a paid up license for 2-G just like Nokia did and will owe no revenues after 2006.
I noticed your other post after my response that you had actual numbers and you weren't using a billion for this year or next. The only unknown is when will we license the top 2 that should translate into agreements with the other 2 of the top 5 we don't have licensed? Tom Carpentar is being conservative because these things have taken way too long already but I believe we are in the final innings and we will soon see what the score is. Let's keep our fingers crossed that the company's projections and presentations come true. If so, the stock will explode to the heights we dream about in the future.
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DD....I sent a response to either olddog or loop that showed the numbers I've seen from a chart provided by ....I believe Eric.
I don't think I'm missiing the number of 3G units or the year they may be sold. If you have better numbers than what I offered....please share that data.
TIA....chris
Loop as usual another great post in addition to the one just prior to this one I am responding to. One thing to point out is that in IDCC's presentations is that several years ago the chart they are using showing handset sales and projected percentage of licensed products, they used to show in 2010. Now they show in 2012. This is taking longer than even the company was expecting as shown by their presentations, in addition to other actions by the company. If the company can't reasonably estimate how long this will take, how can we or the analysts? Tom is being conservative now after being burned somewhat in the past expecting things to materialize that didn't.
The next couple of months will really get exciting because any day we might see trading halted pending news then see the press release we are all hoping for. I really don't think we make it to November without seeing that. There is too much at risk for both sides IMO and the noose is getting tighter around Sammy's neck and will soon be put over Nokia's head ready to start tugging. Nokia will take a few extra months than we want but it will still happen relatively soon.
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Croth
One final thought and I am done. While we attempt to create our own economic forecasts, we have discovered that even our analysts cannot figure out the economic results of our licenses because the company cannot produce same due to confidentiality restraints. This is another reason for the poor participation in coverage of IDCC. My old man always told me that everyone has to live with what they have and must always beware of real limitations. IDCC gives very little information to our analysts and us. We live in a tea leaf environment. We continue to have an arsenal of unanswered questions and it seems for every answer we actually find, the arsenal of questions grows larger. Do we believe that IDCC will perform much better than the very conservative forecast in TC's report? Of course we do because we have no liability issues with publishing our tea leaf forecasts. All we can lose is our money if we are wrong. He on the other hand takes a huge risk in the use of tea leaf forecasts because he can lose his money, his job and be the subject of litigation as a bonus for his efforts.
I posted 3 months ago that we would be in the final crunch time over the next several months and we are in fact there. The ITC decision will be huge as far as timing and the beginning of a period that will give us many answers about what we can expect the company to earn over the next 2 to 4 years. We have a lot of time on our hands and a lot of cold sweating ahead. Being critical of our remaining analysts is not high on my priority as a way to pass time as we near the end of November. You and I have plenty of Kool Aid and we will need it to fend off the "cold feet" syndrome, unless Samsung blinks first and signs the dotted line.
MO
loop
croth, the one thing in your analysis that you are missing is the fact that the billion phones you are using in your example will not be all 3g and therefore not all royalty bearing for some time to come. There will still be many hundreds of millions of 2g phones being sold for the next several years at least. Tom in his research reports has projected out how many phones will be 2g and thus not royalty bearing for Nokia and Sammy, and how many will be 3g. The percentage of phones that will be 3g and royalty bearing at what management is anticipating lowers your billion phones/year considerably for now.
IDCC in its presentations also include a table where they are estimating a certain number of phones being sold at various revenue/phone in 2012 and at that point the are projecting less than a billion 3g phones to be sold, it is close but still not there yet. They are projecting 70% of phones to be 3g in 2012 with a total phone market of 1.3 billion phones at that point.
I agree at some point the amount of cash that IDCC could be generating is SUBSTANTIAL but we have been saying that for as long as I have been an investor since 1993. I still believe it to be true otherwise I wouldn't be so addicted to this stock and one of these days all the analysts will hopefully be falling all over themselves to be rating it a buy. At that point we will hopefully be approaching triple digits when the street finally wakes up to IDCC.
Tom has always done a very detailed analysis and although I still can't see how he comes up with a neutral rating with a target of $36, he is the best analyst covering IDCC out there IMO. The only question in his analysis is reconciling a target price 40% above our current price then saying it is a neutral. If his target was less, then I could understand the neutral rating but that is my lack of understanding. He is being conservative at this point.
Here is the link to one of IDCC's presentations where they are showing the revenue potential for the 3g market. On page 13 of the presentation is the slide that shows the potential is enormous if they can successfully license the current thieving b@stards. During the presentation that actually happened, WM stated that using the buck fifty at 75% of the market in 2012 and you can see how large the revenue will be. If they achieve a higher amount all the better. Unfortunately the analysts are in the show me mode at the present time but that will change once Sammy and Nokia are put to bed.
http://ir.interdigital.com/phoenix.zhtml?c=116582&p=irol-secText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NTQyOTIyOSZkb2M9Mg%3d%3d
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olddog....Thanks for that information...I'll look it over and let you know my thoughs.....for whatever that's worth!
I did think about time and how that plays into the numbers. One thought I had was to first use a market of a billion units and assume Nokia and Samsung control 60% and use Tom's 75 cents per unit x 600 m = $450m then assume all others 40% pay a buck a unit you get another $400m, total = $850m. I then allowed $250m to operate the business and then took out $200m for tax= $400m / 40-45m shares. I still get about $10 bucks a share!
I then thought of just 3G. I believe 2007 the market was only about 180m units,2008 is projected around 360m units and I believe 2009 is between 500 and 600m units. If you use 2009 and assume 500m units and use just 75 cents on 60% of 500 is 300 units x .75 = $225m for Nokia and Sammy. Then assume the other 40% or 200 units are at (humor me) the two bucks we are told we are charging for 3G today and I come up with revenue of $625m less operating expense, less 35% tax I get a number about $240m and using 40m shares = EPS of $6.00/share.
I guess if you keep going and say you settle for the 75 cents on 60% and then cut our current rate of $2.00 / unit by 50% and keep giving, and giving......I can get down to $2.00 LOL.
Anyhow, I've been here 10 years and will stick it out regardless of analyst estimates. I'm pretty sure we do a lot better than $2.00 bucks and just about evrybody knows it. Including Nokia and Samsung.
Still drinking the Kool Aid.......chris
I don't understand analyst ratings. How can someone have a price target at $36 which is almost 40% above yesterday's close and have it rated a neutral? What kind of return does a stock have to have to get rated a buy LOL? His research is top notch and he understands the company more than anyone. Like I said, I just don't understand the overall conclusion. I am not saying he is wrong, just saying I don't understand the rating.
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Barron's today Price target 36
InterDigital - IDCC-NNM
Neutral - Price 24.89 on Aug. 11
by Hilliard Lyons
IDCC develops technology for advanced digital-wireless communications. Revenue of $58.7 million/EPS of 13 cents compared to our $59.1 million/11 cents estimate...We're positive on IDCC's ability to sign 3G licensing agreements with Samsung and Nokia....If a more attractive entry point [emerges], we'd consider [a rating] upgrade.Target: 36. Market cap: $1.1 billion.
With our luck it would hit one of the judges in the head and kill him delaying our case further. Keep the bricks away from the courts please.
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My3
They wrap the requests around bricks and throw them through the judges' windows. You don't have any spare bricks laying around to deliver to the clerks do you.?
MO
loop
Whizzer, ghors etc, since the original appeal request was an expedited basis, will the en banc request also be expedited? What is the usual length of time this takes? a month, 2 months, 6 months? Sorry if this has already been answered. Thanks.
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Olddog--When you discuss the Federal Rules of Appellate Procedure you have to remember that those are the general rules, and that each circuit court of appeals has their own rules. In our case, we have to use the specific Rules of the Second Circuit and I would direct you to Rule 41 of the Second Circuit. Those are the rules that I have relied on in my earlier posts that discuss the staying of the mandate. The mandate is stayed pending the determination of a petition for rehearing by the panel or by the circuit en banc. Once a decision is rendered denying the rehearing request, the mandate is issued 7 days later. And please, no one should assume that this request for a rehearing will be granted. It is highly unlikely that it will be. Because we are in August, it may take a while to poll the judges on the Circuit to decide whether they wish to hear it en banc.
revlis, the 2 footnotes you are citing cover 2 different areas regarding the same payment amount. The footnote relating to Cash Flows, only includes the actual cash received which is net of foreign withholding taxes.
The second footnote deals with deferred revenue and includes the gross amount including foreign withholding taxes because the licensee gets credit for the full amount
Prepayment amount $26 million (shown in deferred revenue)
Foreign withholding 2.6 million (10% of payment)
Net cash received $23.4 million (rounded to 23.5 on cash flow footnote)
I am certain about the above considering my background in accounting. You can continue to question the numbers but you will be wrong. The 2 amounts refer to the same agreement and payment.
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gatticaa,
You are not the only one who needs a drink.
I look at the 3Q/07 10-Q and 2007 10-K and compare the prepayment amounts booked in the 2 filings and could not see where the $26 million was listed in the 10-K.
In the 3Q/07 there were 2 prepayments listed for a total of $45 million. If you add $26 million to the $45 million you get $71 million and yet the 10-K only list $56.4 million related to new prepayments from existing licensees.
mo
From the 3Q. 2007 10-Q
These receipts included the second of three $95.0 million payments from LG Electronics (“LG”), a new prepayment of $23.5 million from an existing licensee, the first of three fixed $20.0 million payments from a new licensee, $11.2 million non-recurring payments from Sony Ericsson and $21.5 million of prepayments and $83.3 million of current royalty payments from other existing licensees.
Gattica to clear something up in your post. The 10q talks about a payment of $23.5 million. Most payments from Asian licensees have foreign withholding taxes at I believe 10%. Therefore this 23.5 cash payment would have increase deferred revenue by the full amount which was probably the $26 million discussed elsewhere less the foreign withholding taxes of 10% or $2.6 million comes out to the $23.5 million discussed in the cash flow information. I know it is off by $.1 million but since most of the reporting rounds, we don't know if the original prepayment was $26.1 million less 2.6 million or they just rounded 23.4 million to 23.5 million. The notes in the cash flow statement only discuss actual cash received while the deferred revenue would also include the amount of foreign withholding taxes.
This is not a different payment than that discussed as 26 million so let's not start a new war LOL.
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....
FINANCIAL POSITION, LIQUIDITY AND CAPITAL REQUIREMENTS
We generated positive cash flow from operating activities of $133.6 million in first nine months 2007 compared to $315.8 million in the first nine months 2006. The positive operating cash flow in first nine months 2007 arose principally from receipts of approximately $254.5 million related to 2G and 3G patent licensing agreements. These receipts included the second of three $95.0 million payments from LG Electronics (“LG”), a new prepayment of $23.5 million from an existing licensee, the first of three fixed $20.0 million payments from a new licensee, $11.2 million non-recurring payments from Sony Ericsson and $21.5 million of prepayments and $83.3 million of current royalty payments from other existing licensees.
revlis, I believe firmly more money will be coming as a result of the agreement to make it a good one. I don't think it is just a possibility but it is a definite thing otherwise it wouldn't be the good agreement Merritt has stated it is.
I believe it has been posted that more money is coming as a result of the agreement with Apple (just not from Apple) but this Apple discussion sure has taken a life of its own. People are disagreeing just to disagree instead of reading the posts they are disagreeing with. Hopefully we are soon tearing about disclosure about a new Sammy or Nokia agreement and put this one to bed.
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BTW, as far as questioning the Apple agreement, many here are not seeing that Ronny could be right and you could be right. From the things we know, I believe Apple is on some sort of fixed fee AND we will get additional revenue (just not from Apple) that will make the agreement fall in line with what management has publicly stated is their goal.
Then you and I do not have any disagreement even if you only acknowledge that it is a possibility but not a certainty. Thank you for your clarification.
mo
Ronny I can only assume David doesn't even read what he posts, he makes the stuff up just so he can disagree with you and then proclaims you have a hidden agenda. His arguments never have any substance behind them.
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David unbelievable response. Just who is this new licensee as of Sept. 30, 2007 who is going to generate 3 fixed installment payments of $20m each to IDCC? Do you really believe it is from some mysterious new licensee in 2007, whom IDCC has yet to disclose the specific name of?
revlis, where in my post am I questioning the integrity of Merritt? Loop and I are discussing deferred revenue and overall I believe Merritt is doing a fine job. Talk about being so convinced of one's opinions that they aren't even seeing the picture discussed.
BTW, as far as questioning the Apple agreement, many here are not seeing that Ronny could be right and you could be right. From the things we know, I believe Apple is on some sort of fixed fee AND we will get additional revenue (just not from Apple) that will make the agreement fall in line with what management has publicly stated is their goal. If it was not a good deal, Sammy and Nokia would be all over us and would have used it against us. From what we know, Ronny has presented a very compelling case but we don't have all the facts. What we do know for a fact is that Merritt stated it is a good agreement, that doesn't mean the money isn't coming from someone other than Apple.
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loophole,
I am afraid you are wasting your time. The are so convinced that their opinions are facts that nothing you post will convince them otherwise. They have to question the integrity of Merritt because what Merritt has said on the subject does not agree with their calculations. I have shown how many assumptions needed to be considered in order for their opinions to become facts. They ignore all facts that contradict their opinions such as the recent hearings.
At least we know that our opinions are opinions subject to change with the revelation of new facts.
mo
Loop, as umpires sometimes make strike calls that they shouldn't, here is the logic I am using that makes me 100% certain that my interpretation is correct and is contained in the following portion of the 2007 10k:
"and $40 million related to a prepayment and accrued receivable from a new licensee. "
This means to me that at 12/31/07 they received a portion of the 40 million and they booked a receivable for a portion of the 40 million. Had it all been received then they would have stated that it was the result of a prepayment without including the words and accrued receivable. Sure they changed the wording from the 2006 disclosure but it means the same thing, both of the increases relates to cash actually received plus money that is to be received at the balance sheet date. You can't have a receivable if the money has already been received otherwise it is cash. If IDCC's disclosure was so clear as you think it should be, would we have even half the discussions on this thread as we do LOL? IDCC's disclosures are anything but clear in many cases.
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Desert
I have deposed enough CPA's to know that the purpose of SEC filings and accounting methods is to paint as accurate a picture as possible of the operations of the company. Thus, when recording a figure for public disclosure certain explanations of the transaction must accompany same.
For instance, the following contains the LG information provided by IDCC for the year 2006:
"Our combined short-term and long-term deferred revenue balance at December 31, 2006 was approximately $231.6 million, an increase of $140.4 million from December 31, 2005. We have no material obligations associated with such deferred revenue. In 2006, we recorded gross increases in deferred revenue of $336.7 million, $190 million of which relates to payments received or due from LG, $50 million related to the portion of the Nokia payment associated with 2006 revenue, $95.2 million related to new prepayments from existing licensees and $1.5 million related to prepayments from new licensees. In 2006, we collected the first $95 million payment from LG and recorded $95 million in accounts receivable relating to LG’s second payment obligation due in first quarter 2007. In accordance with our policy for recording long-term receivables from patent license agreements, we will defer recognition in accounts receivable of LG’s third $95 million payment obligation, which is due in first quarter 2008, until twelve months prior to its due date. The gross increases in deferred revenue were offset, in part, by 2006 deferred revenue recognition of $121.3 million related to the amortization of fixed-fee royalty payments, $75.0 million related to per-unit exhaustion of prepaid royalties (based upon royalty reports provided by our licensees) and the recognition of deferred revenue related to technology solutions agreements."
IDCC makes it perfectly clear that they received 95, 95 was owed within 12 months and 95 was owed outside of 12 months. They therefore recorded 190 in accordance with their accounting policy for recognizing long-term receivables from patent license agreements.
Now let's look at the IDCC recording of the 40 million prepayment from a new licensee from the 2007 10k:
"Our combined short-term and long-term deferred revenue balance at December 31, 2007 was approximately $303.4 million, an increase of $71.8 million from December 31, 2006. We have no material obligations associated with such deferred revenue. In 2007, we recorded gross increases in deferred revenue of $191.4 million, $95 million of which relates to a payment received from LG in first quarter 2008, $56.4 million related to new prepayments from existing licensees and $40 million related to a prepayment and accrued receivable from a new licensee. The gross increases in deferred revenue were offset, in part, by 2007 deferred revenue recognition of $69.2 million related to the amortization of fixed-fee royalty payments, $50.4 million related to per-unit exhaustion of prepaid royalties (based upon royalty reports provided by our licensees) and the recognition of deferred revenue related to technology solutions agreements."
There is no mention of two 20 mil payments, one made and the other to be made on x date (within 12 months). Thus, the only logical conclusion is that the new licensee paid 40 million in accordance with a license and is not due to pay more within 12 months. Under your theory, IDCC would have stated that 20 mil had been paid and that 20 mil is being recorded as an account receivable due to be paid in x quarter of 2008.
I am the first to know that I am out of my area in accounting principles, but part of my area is the recognition of deviation from stated company policies and the goals of accounting to paint a true picture of the company operations. IDCC received a 40 mil payment from a new licensee in 2007. St st st steeeerrrike.
MO
loop
Loop, in a previous post about the timing of the tribunal ruling you theorized that the q may have had a mistake. I sent the following email to Janet and below it is her response. From the response we have no idea how long they had it but it appears that they didn't get it on the 16th but she is purposely vague imo so we really don't know how long they sat on it.
Hi Janet
While reading the 10q, I noticed that the arbitration panel issued its ruling and sent it to IDCC on July 16th yet the company waited 15 days to announce this. Was this a typo in the 10q or did the company in fact wait that long to release this very important news to the investing community? I understand that you were probably not required to update investors earlier since there wasn't any change in the outcome from what was previously disclosed, but it sure points to lack of concern to investors considering what happened to our stock price after the staff opinion came public. It would have been nice to get some good news earlier. Sometimes it is like pulling teeth to get information from the company. Please let me know if in fact the 10q is correct as filed.
RE: 10q question
From: Point, Janet M (Janet.Point@InterDigital.com)
Sent:Mon 8/11/08 6:18 AM
The date in the Q reflects the date that the tribunal signed the award. These awards seem to take some extra time making their way to us. As soon as we have a ruling, we make every effort to disclose it as soon as practicable.
od, exactly how I remembered it, thanks.
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Dd: Just to clarify how IDCC accounted for LG in their deferred revenue account. In 2006 they recorded $190 million. This amount covered the initial $95 million cash payment made in Jan 2006, plus a $95 million receivable for the payment due in 2007. In 2007 they recorded another $95 million in the deferred revenue account to account for the final payment due in 2008. Hope this clarifies it.
in reply to:
Loop stay in your area of expertise. Olddog has shown the LG was included early in deferred revenue as I remembered so I guess it wasn't strike 3 as you say.
It is not material but that will mean that the last quarter of the contract period will have the regular 1/20th amount of $14.25 plus the remaining 2 plus million that has not yet been amortized. It is just a strange thing that's all. Since it is not material, and the time period has passed when I believe it should have been recorded, it doesn't matter.
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Dd: Don't see why it should be a problem. The full amount of the LG contract has been recorded into the Deferred Revenue account. The easiest solution would be to write off the total balance remaining as revenue for the qtr ending 12/31/10.
in reply to;
Ronny you want another strange thing with the LG agreement. The agreement is for 5 years (20 quarters) and ends on 12/31/10. The 1st qtr revenue booked from LG was for a partial qtr (I believe something like $11.3 million or so) and each of the subsequent qtrs revenue recognized from LG is exactly 1/20th of the total contract amount. When they get to 12/31/10, there will be some money left over that they haven't booked as revenue but yet the contract will be over. Where and when are they going to fix Fagan's mistake or did they already fix it? Or am I missing something?
Danny like I said, your memory is faulty. When I previously told you Ronny wasn't a participant in the press release when it went out, I never admitted to being a participant, I was, but I never admitted to it to you before. Where in that press release that went out was it a concerted effort to bring down management?
If your memory was a little better you would remember it had only one goal and that was to stop management from approving another 10 million option dilution, not to bring down management as you say. I am very happy I participated in the PR and I believe firmly it has helped the long term stock price by way of reducing the excessive and obscene dilution that would have occurred. The one thing it also pointed out was that there was a hole in their security that caused the press release to go out as if it were from IDCC. That was a shocker when it happened btw. I guess you would have liked it had that PR not come out and management would have been successful in diluting the company by another 10 million options that they could have then spent another couple hundred million on?
I stand behind my original premise, postings on this or any other board have no impact on the stock price. Taken further they could, but the actual posts do not. Also Ronny has been totally up front with everyone on this board when he did various things in the past. If I remember correctly you even went on a letter writing campaign with management so you could show them the way once upon a time, isn't that correct?
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Chris .. Those conspiracy theorists on this board that believe any discussion has an ulterior motive are too funny.
Pretty hilarious comment coming from an admitted participant in a concerted effort to bring down management culminating in the infamous PR quoting IHUB posts to back the position stated therein. Not to mention lobbying for same on IHUB and with e-mails and PM's. And Ronnie admittedly contacting institutional holders to sway their opinions on the matter while failing to disclose his ultra cozy relationship with Mr. Espy.
Perhaps you think those actions are "funny" but I don't!
MO,
Danny
Loop stay in your area of expertise. Olddog has shown the LG was included early in deferred revenue as I remembered so I guess it wasn't strike 3 as you say.
Message In Reply To:
Desert
This is my last post on the subject. Under your theory, LG would have been shown as 190 mil. However, it was shown as 95 mil in the same sentence as the 40 mil. Strike 3, the Appl tea leaf team has struck out. The 2 mil referred to in the 8k and guidance had to do with the 20 identified, 26 actual mil licensee and nothing at all was mentioned financially about Appl.
MO
loop
Isn't that about the same time that Cramer said to sell IDCC? It happened just before we started going up due to the recent litigation news. Like someone here said, Cramer is a contrarian when it comes to IDCC and his recommendations.
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O'dog maybe the shorts were put on IDCC, and now they are being pulled off by whoever put them into IDCC.
Ronny you want another strange thing with the LG agreement. The agreement is for 5 years (20 quarters) and ends on 12/31/10. The 1st qtr revenue booked from LG was for a partial qtr (I believe something like $11.3 million or so) and each of the subsequent qtrs revenue recognized from LG is exactly 1/20th of the total contract amount. When they get to 12/31/10, there will be some money left over that they haven't booked as revenue but yet the contract will be over. Where and when are they going to fix Fagan's mistake or did they already fix it? Or am I missing something?
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Olddog re the $40m and deferred revenues
Thanks a lot for the additional info about the deferred account. Notice the following from your post:
..."In first half 2007, we recorded gross increases in deferred revenue of $116.5 million.
(1) $95.0 million related to an accrued receivable due from LG in first quarter 2008
I think that Ddweller is on to something in an earlier post re the deferred revenue account. He said and it certainly appears that IDCC books the next fixed installment on a fixed fee license when it becomes within one year due. LG's license was in February and required 3 annual installments of $95m each February. Notice that in the first half of 2007 (probably Feb. 2007), IDCC booked the next NEC fixed installment which was not due until the first quarter of 2008 (probably Feb. 2008). Thus, amounts are booked into the deferred account sometimes BEFORE the cash is to be received, and almost a year in advance.
Let's ASSUME that the $20m referred to on Sept. 7, 2007 press release was Apple's fixed amount due for 2007. Therefore this extra $20m booked as an accrued receivable within the deferred account would be due from Apple in Sept. 2008. A total of $40m has thus been booked into the deferred account re the Apple license, which was a "new" licensee in 2007.
BTW the following two accounting entries could be as follows:
Sept. 2007 Debit Cash 20,000 Credit Unearned Fees 20,000
Oct-Dec. 2007 Debit Accounts Receivable 20,000 Credit Unearned Fees 20,000
However, you are correct in that IDCC's deferred revenue account is extremely confusing. One last comment about the deferred account: amounts are taken out of the Unearned Revenue account as they become earned each quarter, and then go into Royalty Revenue. LG's advace payments were booked into the deferred account all within two years, however it will take 5 years and 20 quarters to earn all of the deferred amounts at $14.25m per quarter.
Do people actually believe any discussion on this board would drive the stock down? If discussions on this board was able to drive the stock we would be well north of $50. This board is for information and to share opinions, it doesn't have the power and no poster on this board has the power to change the price in anything other than a temporary basis. The reason I say temporary is if someone that is credible posted that there was news of some sort it would change the price until it came out that it was not true.
Those conspiracy theorists on this board that believe any discussion has an ulterior motive are too funny. No amount of posting will change things in the stock price. I can't wait till we can be talking about what is management going to do with all the money they received as a result of the settlements yet to come from Sammy and Nokia. I don't think any of the 3 companies want this to go the distance and think we will get settlements in the near future.
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I am starting to think the only ones that are still talking about the Apple license are those who may be trying to get the stock price to go down. It ain't gonna happen.
Why not talk about when the Samsung arb 2 and 3 money will be paid. My guess is before the end of the month.
IDCC received $20 million and booked a receivable equal to the same amount for the next installment from whoever it is that shall remain nameless LOL. Since the money is due within 12 months they booked the receivable with a corresponding increase to deferred revenue. They increased deferred revenue by $20 million when the cash came in then increased it again when they recorded the next $20 million installment. I don't know why they do this but from memory they did the same with LG.
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Ddweller re the $40m amount
Let me see if I understand your referenced post correctly. Are you saying that IDCC received a $20m advance from Apple in 2007. Then they were due to receive a second $20m fixed advance, which got booked as a receivable at the end of 2007? Or are you saying that there was only one $20m amount, which got counted both as a receivable and deferred revenue?
Ronny, see my post to Loop regarding your post. I believe we received $20 million and they also booked the money due in less than a year as a receivable. They have done the same thing in the past with LG.
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Olddog re NEC's updated license and the $20M
That is certainly a possibility. You are correct that the language says new "agreement", rather than new licensee. However if the press release is possibly referring to NEC in conjunction with the $20m, I think there would have been better language to use rather than "new" with NEC. I'm thinking "updated" or "revised" agreement, would have been more appropriate language than "new" agreement.
Now Loop made a post yesterday about a $40m number in the 2007 10K, within the deferred revenue section, that referred to a new licensee. I really hadn't noticed this before, but I couldn't come up with an explanation for this amount. Thought if I slept on it something might pop into my head, but it didn't. Do you have any interpretation or explanation as to the following 10K statement:
"In 2007, we recorded gross increases in deferred revenue of $191.4 million, $95 million of which relates to a payment received from LG in first quarter 2008, $56.4 million related to new prepayments from existing licensees and $40 million related to a prepayment and accrued receivable from a new licensee."
BTW I am very confused by the terminology "accrued receivable" in conjunction with the deferred account. I thought that the deferred (unearned) account was for any royalty cash advances or prepayments, which had not been earned at the time of the cash advance/prepayment. How can there be a accrued receivable connected to a cash advance? "Receivables" are used in conjunction with earned revenues, which have not yet been received in cash. This is the opposite of the deferred/unearned situation.
Loop, I believe there was a $20 million dollar receipt from Apple then Accounts receivable was increased by an additional $20 million since it was due under the terms of the agreement and it was due in less than 1 year from the date of the report you cited. The snippet you found about $40 million increase in deferred revenue supports my guess above, $20 million collected PLUS $20 million in accounts receivable.
I believe during one of the conference calls or a different filing there was mention of the $26 million payment and the $20 million payment but I can't locate it at this point. I believe they are 2 separate issues. All JMHO but I think what has been disclosed over the past year or so supports these dot connections.
Message In Reply To:
eyedeeseesee
I do not believe they could file an 8k because it is front money and the licensee did not want it disclosed. The 20 mil cited in the Appl 8k turned out to be 26 mil and was from Rimm. IMO the financial terms of Appl have never been released or attempted. This is why I believe that the 40 mil disclosed in the 10k is about Appl, but we will never know unless the 10% requirement is met or Appl allows IDCC to discuss same. We must rely on the words of WM who has made at least references to the Appl PLA as being in line with our expectations on the financial side.
MO
I hope we never find out for sure what Apple is contributing to IDCC and here is why. Hopefully we settle with Nokia and Sammy soon which drives our revenue so high that in order to get to the necessary 10% revenue contributor, it would mean we never see Apple disclosed any further than it already has.
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Jim,
We will also have to get lucky with Infineon and find something in the Infineon filing in order to get the complete picture. Apple is not enough in order to know how much Apple is paying to IDCC. You need Infineon too.
mo
Jim it is over as far as I am concerned. Sorry about wasting your time and everyone else's. We are on the verge of a major breakout as far as good things coming IDCC's way and I will refrain from responding to dzr. Have a great night.