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5 Reasons Nokia's N97 Won't Make a Difference, (and perhaps, one more, why NOK needs to sign with us.)
http://seekingalpha.com/article/108853-5-reasons-nokia-s-n97-won-t-make-a-difference?source=email
"We got excited for a moment about the prospect of Nokia (NOK) waking up and coming to grips with the fact that the Apple (AAPL) and Research in Motion (RIMM) phones were eating their lunch. This week they have a number of announcements coming and the first one we looked at was the new N97 phone. The engadget post is a good place to see it.
To be sure, it’s a very nice smart phone and since it’s the newest it probably has the best collection of high-end features for now. It also a fairly big, expensive, slide-with-a-full-keyboard kind of thing. We’ll let the gadget and phone industry and street analysts have their day of doing a full analysis but this model isn’t enough to stop the secular slide for Nokia in the mobile Internet space (at least in the U.S.)
Here are our five reasons why:
1. It’s not a high unit phone: Of course the pricing will get much lower than the $600 or so list price with carrier plans. But even if it is offered at $149, it’s just too much phone for many users. Nokia has other models, of course, but these haven’t been helping the company versus the other players either.
2. It’s not sexy or business. The iPhone wins in the sexy category. The N97 looks like a brick next to an iPhone. It’s not something a business person is going to be fiddling with either. They will stick to the Blackberry.
3. The "mobile computer" positioning is confusing. The two things that have momentum right now are netbooks (eePC, mini9, Samsung (SSDIF.PK), etc.) and smart phones. Nokia may want this to be a mainstream category, but it’s not.
4. Services are lame and suffer from a lack of integration and elegance. Nokia has a number of refreshed and new services as part of the announcement as well. They include Ovi, Games, Music, Navigation and also a set of development services to build on. But they are nothing like what Apple is offering now. Possibly closer to what the Blackberry offers but again, business users who are into games and music are more likely to push for an iPhone.
5. Beyond the "big three", there are strong new offerings out there from a variety of players. The new Samsung phones are actually pretty impressive. Phones based on Google (GOOG) are getting into the marketplace to reasonably good reviews and it’s just the beginning. The Google phone will undoubtedly improve rapidly. Even the lowly Palm (PALM) is surviving for now and planning something big in 2009 (hope it doesn’t look like an N97!).
In conclusion, we thought this might be a week where Nokia really "woke up" to the reality in the mobile Internet space. So far the evidence suggests that is not the case. We are still rooting for them but only they can help themselves out of this."
Loop, I hope you're correct. Wanda's "sign-off" is a dead giveaway.
Mickey was a Must Read whenever he posted. He may not always have been correct, but he was always extremely confident about his position.
Lando, Here you go...
InterDigital, Inc.
Pre-Market Charts | After Hours Charts Nov. 25, 2008 Market Close: $ 25.56
After Hours Trade Reporting
After Hours
Last: $ 26.0721 After Hours
High: $ 26.0721
After Hours
Volume: 7,800 After Hours
Low: $ 25.53
After Hours
Time (ET) After Hours
Price After Hours
Share Volume
16:17 $ 26.0721 3,800
16:17 $ 25.5637 100
16:12 $ 26.0721 3,600
16:07 $ 25.53 300
1
Ronnie, Excellent pick-up! Are you sure you weren't an English Professor in another life? LOL
Loop, Good catch! I missed that one.
enyaw, I recently saw a chart showing the Avg PE of the Tech sector. It declined from about 22 to a current PE of 11, with Apple at a 16 PE.
Loop, Doesn't the bolded clause from our Press release scrub the 12/17 meeting?
Under the terms of the term sheet, InterDigital agreed to grant Samsung a royalty-bearing license covering Samsung's sale of all 3G products (including products built under both the WCDMA and cdma2000 standards and their related extensions) through 2012. The agreement also ended the payment disputes regarding Samsung's royalty obligations for sales of 2G products.
ot: Be careful of those greens. No matter what you read, they all break towards the ocean....LOL
Some thoughts on Negotiations -
In an earlier life I was on the Personnel Staff of GM, working with Labor Relations, at their Corp. Headquarters in Detroit.
Here's a few thoughts I learned about Negotiations from that experience:
Most Negotiations do not get serious unless there's a "Drop Dead" date. For GM, it was something like, "At midnight on this date, the UAW goes on strike." That "walkout" at midnight, was the "Hammer" for the UAW. And the Hammer for the UAW had to inflict Major Harm to GM, so as to get their full attention.
Negotiations, up until that point were mostly "posturing:" establishing positions; determining weak and strong points in the other side's positions; firming up on the main demands that were "Must Haves" vs. "Nice to Have" vs. "Fluff, or Straw Men."
Both sides constantly weighed the "price" of their, and the other side's demands, vs the price of a Strike to their side. Within 24 to 48 hours of the "Drop Dead" date, negotiations went into round-the-clock sessions. The issues got down to a final "Give and Take" on the "Nice to Have items," to the final issue of who would blink first on the "Must Haves!"
IMO, our "Drop Dead" date is right before the ALJ releases his decision, which IMO is Tuesday AM, after the market opens. After the ALJ releases his decision, both sides forfeit a large part of their ability to determine the outcome, placing their reliance on their opinion about the ALJ's perception of the evidence. So, we could easily wait until Tuesday to see a settlement or not.
The difference between the GM/UAW situation and IDCC/SAM, I believe is more about "power, inflicting pain, and cost" in GM's situation vs., "right and wrong, inflicting pain, and price" in IDCC's situation.
IMO, The serious talks between IDCC and SAM are going on as I type this. They are weighing the "Offer" from the other side vs. their "Must Haves." These talks will continue until both sides feel they can live with the losses to their original positions. IMO, the key consideration for us is overall price for 3G, (through price/unit and other considerations.) The key considerations for SAM are "saving face by losing, and market share." Price is just a means to those ends.
Unless we go crazy on our price demand, I believe that we'll see a settlement, or a "BAN."
G hors...... I was scratching my head on that answer. Thanks for the post note.
whizzer, olddog, revlis, I'm getting a bit confused. Would you pls tell us again:
If there is no settlement tomorrow and we go to the ALJ's decision on Tuesday, and it's a "ban,"
o What's the timeline for a Full Commission ruling? The President?
o When does the product Ban begin? Does it stay in force if SAM appeals at any point in the process?
o Any other built in delays?
Thanks,
whizzer - An excellent, and very helpful post. Thanks!
A few points of interest to me on today's CCall.
WM never touched the litigation during the formal presentation. When it was addressed in the Q&A, he only acknowledged that we were in the ITC with SAM and the Judge would rule on it next week. Then mentioned NOK in passing as well. Nothing said, about how he felt, what he expected. etc. He was very matter of fact, as in, "No Big Deal!"
He also referenced having 30-35% of 3G mket and collecting a
almost $2 per unit.
Lots of time spent on our history.... "Been at it Over 30 years; we invented the patents and also the first devices/systems to put them in since no one else was around then; Chaired many of the Standards Committees, including 802.16; Heavily involved in LTE and MIH.
Those listening from SAM/NOK got no clues from him other than current FRAND is somewhere close to $2
IDCC's at the UBS Conference tomorrow: Look who's on right after IDCC:
Thursday 11/20/2008
Download Real Media
Download Windows Media
Ballroom C
8:00 AM EST UBS Listen Listen
David Dolezal
Head of Clean Technology and Alternative Energy Banking
8:45 AM EST Juniper Networks Listen Listen
Hitesh Sheth
Executive Vice President & General Manager, Ethernet Platforms Business Group
Kathleen Bela
Vice President, Investor Relations
9:15 AM EST Art Technology Group Listen Listen
Julie Bradley
Chief Financial Officer
Bob Burke
Chief Executive Officer
9:45 AM EST Cisco Listen Listen
Kelly Ahuja
Senior Vice President & General Manager, Service Provider Routing Technology Group
10:15 AM EST Perot Systems Listen Listen
Russell Freeman
Chief Operating Officer
10:45 AM EST Adtran Listen Listen
Jim Matthews
Senior Vice President, Finance & CFO
11:15 AM EST Duff & Phelps Listen Listen
Noah Gottdiener
Chief Executive Officer
Jacob Silverman
Chief Financial Officer
11:45 AM EST J2 Global Communications Listen Listen
R Scott Turicchi
President
12:15 PM EST UBS Listen Listen
Scott Abbey
Chief Technology Officer
1:15 PM EST ManTech International Listen Listen
George J. Pedersen
Chairman & CEO
Joseph M. Cormier
Vice President, Corporate Development
1:45 PM EST Texas Instruments Listen Listen
Art George
Senior Vice President & Manager, High-Performance Analog
2:15 PM EST InterDigital Listen Listen
William J. Merritt
President & CEO
2:45 PM EST Nokia Listen Listen
Elizabeth Schimel
Vice President, Music
whizzer - Thank you. I did not remember the Staff guy saying that.
Would you also be good enough to refer us to your post covering this section.....
"There is an important distinction between the two, which I have previously posted on. In part, equitable estoppel requires that Samsung have "clean hands" in the matter and also, that as a result of the ETSI FRAND requirements, it is reasonable to bar patent holders like IDCC from asserting their patents in an infringement action. IMHO"
Sonic. I think that issue of our patents being valid and infringed is a done deal.
Here's why: First. we cherry-picked the 5 best patents and 17 claims from thousands of patents and claims that were in the field of choice, for their validity; Second, our engineers undoubtedly reverse engineered a number of different SAM phones to assure themselves that the patents and claims selected were indeed infringed; Third, the testimony revealed that both SAM AND IDCC had each "won some." For me that lays to rest whether or not the ALJ is going to find at least 1 claim in 1 patent that is "valid and infringed." If we "won some" then we've "got the goods" on those 2 criteria.
What the concensus on this board appears to show is the fear that the French Expert might have found our underbelly weakness in his testimony on FRAND. Namely that SAM has an "implied license" due to the ETSI ground rules. On this point, our fabulous Board attny's have refuted and picked this one clean, by showing that A. the licenses of Apple, LG, Rim, and HTC, et al testify to the fairness of our royalties; B. an implied license is a 2 sided affair - we grant you a license, and you, in turn, compensate us with x% royalty. Without both sides, there is no agreement; and C. SAM's attny screams that the royalty we're requesting is 40% of the agreed upon Cap for all royalties (i.e. 5%) (Note that he does this without stating the the 5% agreed upon CAP was arbitrary and applied to phone manufacturers, which DID NOT INCLUDE QCOM and IDCC.
There are enough holes in his testimony to drive a truck through. But, IMO. more importantly, is the fact that, IF the ALJ accedes and caves in to the French Expert's ETSI argument, then he, in fact, has neutered the ITC, and acquiesced to the concept that a foreign entity (ETSI) controls the jurisdiction of the ITC.
I don't believe that Judge Luckern will cave in. Hence, if it goes the distance (which I doubt, as SAM has a history of settling on the courthouse steps), I strongly believe that IDCC will prevail.........VIOLATION!
This post from Eneerg1 over on the AB board, sets out some compelling reasons for SAM to settle, rather than risk a Ban.
Re: AT&T Introduces the Samsung Eternity
By: Eneerg1 in IDCC | Recommend this post (0)
Fri, 14 Nov 08 11:08 PM
Boardmark this board | InterDigital Communications Msg. 29953 of 29955
(This msg. is a reply to 29949 by Eneerg1)
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Arguably, Samsung would assure AT&T their latest entry would not be soon banned. Otherwise AT&T would lose face if introducing a 3G product among others impacted by an ITC decision on Nov. 25.
Can Samsung provide AT&T such assurance?
Did Samsung provide other carriers similar assurance?
At what point, if any, did Samsung assure carriers certain 3G devices affected by the ban would be safe to nationally market?
What assurances would carriers accept with the probable realization that certain 3G devices could be banned nlt Nov 25?
What additional implications did "no later than" (nlt) convey, say over the past four months as new products were rolled out in US?
imo
-------------------
Before retiring, was in garment biz which involved orderable samples. One of the essential criteria as to which manufacturers and sample garments to purchase was orderable shelf life. Generally, ordering required minimum six months availability via manufacturer after samples received. Sample garment orders were placed several months before delivery.
Nicmar, Here's the site for Investor Village and LARanger:
http://www.investorvillage.com/smbd.asp?mb=65&clear=1&pt=m
LC - NOK Shs are down $1.90 pre-mket to $12.25 on this news
Nokia Cuts Fourth-Quarter Industry Outlook
Companies:Nokia Oyj
Reuters | 14 Nov 2008 | 08:26 AM ET
Text Size
Handset maker Nokia said Friday that volumes of mobile phones sold this year will be below previous expectations.
Industry volume is now expected to be 1.24 billion units for 2008, compared with an earlier estimate of 1.26 billion units.
For the fourth quarter, Nokia predicted industry volumes of 330 million handsets, up slightly from the 310 million seen in the third quarter.
The company also said it is taking "decisive action to significantly reduce its cost base" and will "further cut operating expenses in 2009 to respond appropriately to the market conditions."
olddog, As usual, thanks for the clarification, along with everything else that you do for this board.
JL
Here's some info for evaluating this week's trading, not only in IDCC, but across the board.
Just found out that this Friday is the last day of the year that Hedge Funds can make redemptions. So they are selling their holdings at Firesale Prices in order to meet the cash demands of their shareholders/clients, and/or a lot of "Painting the tape" is also going on. So some stocks are seeing way above normal volume to satisfy this Hedge Fund need.
If anyone has supporting info, or anything to the contrary, please chime in.
This post, courtesy of Eneerg over at AB, fully supports your point.
Telecom Korea...
By: Eneerg1 in IDCC | Recommend this post (0)
Fri, 07 Nov 08 9:12 PM
Boardmark this board | InterDigital Communications Msg. 29866 of 29870
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KT in Crisis, SK Telecom Smiles
KT Group had been irrefutable No.1 in Korea’s telecom industry. However, the company is recently facing a series of challenges after the heads of the company were arrested for bribery scandals. To rivals of KT, the bad luck of the big shot is their best luck. They are trying to make the best of the crisis of KT.
Read more...
Samsung Targets Europe, Nokia's Home Turf
Samsung Electronics, a company that seeks economies of scale even by compromising profits, declares an all-out war with Nokia in Europe, the home turf of the Finnish cell phone maker.
Read more...
revlis - Market Share info, compliments of Kent over at AB:
The following is market share information for the top five largest mobile-phone manufacturers for the third quarter of 2008. The figures were compiled by research firm IDC.
Nokia Corp. retained its No. 1 position, while Samsung Electronics Co. Ltd. scored the No. 2 slot. Sony Ericsson Mobile Communications came in third, and Motorola Inc. continued to lose share and came in at No. 4.
The third quarter reflected dismal, 3.2% growth over the year-ago quarter and down slightly from the preceding quarter. The third quarter typically sees a ramp-up in shipments in anticipation of a robust holiday quarter.
Three rays of hope, according to IDC: Nokia, with 39% global market share, has reaffirmed its outlook for the year. Apple Inc. reported 6.9 million devices sold in the quarter, making it the sixth-largest global vendor by volume and third by revenue. And margin-rich smartphones, which typically generate higher average revenue per user for carriers, remain on a strong growth curve.
Top Five Mobile Phone Vendors' Market Share in the Third Quarter of 2008
Vendor
Q308
Q307
Q308/Q307 Change
1. Nokia
39.4%
38.6%
5.5%
2. Samsung
17.3%
14.7%
21.6%
3. Sony Ericsson
8.6%
8.9%
-0.8%
4. Motorola
8.5%
12.8%
-31.7%
5. LG Electronics
7.7%
7.6%
5.0%
Others
18.5%
17.4%
9.9%
Total
100.0%
100.0%
3.2%
Source: IDC Worldwide Quarterly Mobile Phone Tracker.
Note: Units in millions. Shipments only include branded shipments.
Email Article Email Article | Print Article Print Article | Permalink | Bookmark RCR
http://www.rcrwireless.com/article/20081030/WIRELESS/810309997/1094/by-the-numbers-top-five-mobile-phone-vendors-market-share-in-the
I think that Merritt makes some very telling points in the last CCall. I'm hoping that he makes confirmation of these remarks on Friday's CCall.
Tom Carpenter – Hilliard Lyons
Great. One final area and then I'll jump back in the queue. Samsung 3G at the international trade commission, the staff attorney finding indicated no violation, which could mean a lot of things. But I know there are some things you can tell us and you can't tell us. What is the staff attorney basing his recommendation of no violation on? Is it the validity of the patents, is it infringement that they believe that the staff or judge believe that your all patents are in the phone? What exactly is the issue here?
Bill Merritt
As you mentioned, we can't get into the details of the report. But let me give you a sort of three bullet points with respect to the staff opinion. One is obviously we strongly disagree with where the staff landing on this. Second, I think this is a very, very complicated case. And staff is not blessed with a lot of resources. And it's – I think it can be – it's not unusual in a complex case without sort of enough resources to bring to bear that you can kind of get on the wrong track. And third, actually we would – I think it would be helpful at the end of the day if the staff opinion actually got published, because I think we would love to answer your questions because I think we've got some very compelling reasons as to why staff went off track. And so maybe that happens at some point and we could be a little bit more upfront about it. But fortunately we are kind of tied to the protective order the case. But I can assure that having read the opinion and heard the evidence at trial, and heard our own assessment of the case, we are very confident that case went in well and we've got a really good position going forward.
Tom Carpenter – Hilliard Lyons
I was there for part of the first day and heard the staff brief one or two sentence. Statement on his opinion and we were there for most of the Samsung opening presentation. Unfortunately for the IDC presentation we were asked to leave the room. But based on what the staff and Samsung said when I was in the room, that there was – perhaps there was a violation or infringement on some matters, but in overall summary, the staff was not recommending a 337 ban. I know the judge has the final say, but can you respond to those things that were at least publicly available?
Bill Merritt
I think that – again, that's correct that the staff is not recommending a 337 violation, but again you probably also had an opportunity to observe the judge. He's a very, very good judge. We're in front [ph] down there, who is a type of person who is definitely going to make up his own mind on things, was very prepared, has lots of good questions. And I was at least – for the period of time when I was observing things down there, I was very encouraged with what I saw going on there. At the end of the day, I think these cases – the biggest in these cases and this is typical of any type of litigation. It's claim construction at the end of the day. And you get the right claim construction, everything falls into place. And we think we've got very good position with respect to claim construction. And if the judge agrees with us on, and he doesn't have to agree with us on every patent. He just has to agree with us on one. I think given that, as I said, we remain very confident in that case going forward because I think our case went in nice. I think our experts did a real good job, and these patents were picked because they are that we think particularly strong patents.
http://seekingalpha.com/article/91897-interdigital-inc-q2-2008-earnings-call-transcript
croth, There's nothing to point to, other than the company's deviation from a traditional practice. My experience says, that when something changes from a historical norm, there's a reason for it. Ordinarily, we'd have a little over 1/2 hour to digest the numbers, until the CCall began. In this case we get 18 hours. Why????? Just a hunch on my part. We'll see shortly, whether I'm correct or out to lunch
Data, IMO we'd have to strike any news that was material, or they'd have to announce before the Call. They obviously want us to see whatever the news is, so we can chew on it before the call. So, the question for me is, what's not "material" news, but salty enough to be released for our pondering for 18 hours?
olddog and revlis: Thanks to you both. You're and invaluable asset, resource and benefit to all that read this board.
olddog, Revlis, whizzeresq, would you help with the answer to these questions?
Assuming the ALJ finds for us and issues a Ban on SAM's products, when does it go into effect? Immediately? Or, at the end of all the appeals?
Anyone know approximately when the next CCall will be? I couldn't find anything at the IDCC web site. TIA
Here's the concerted effort to skewer the price at the close today
INTERDIGITAL INC - Nasdaq National Market: IDCC
Time & Sales most recent next page
Rec. Time Action Price Volume
4:00:33 PM Ask 23.38 100
4:00:33 PM Bid 23.08 700
4:00:33 PM Ask 23.38 100
4:00:33 PM Bid 23.08 700
4:00:17 PM Ask 23.38 100
4:00:17 PM Bid 23.12 500
4:00:17 PM Ask 23.38 100
4:00:17 PM Bid 23.12 500
4:00:15 PM Trade 22.84 3700
4:00:15 PM Ask 23.38 100
4:00:15 PM Bid 23.12 500
4:00:15 PM Trade 22.84 600
4:00:15 PM Ask 23.38 100
4:00:15 PM Bid 23.12 500
4:00:15 PM Ask 23.38 100
4:00:15 PM Bid 23.12 500
4:00:15 PM Trade 22.84 9265
4:00:15 PM Ask 23.38 100
4:00:15 PM Bid 23.12 500
4:00:13 PM Ask 23.38 100
4:00:13 PM Bid 23.12 500
4:00:09 PM Ask 23.31 100
4:00:09 PM Bid 23.12 500
4:00:08 PM Ask 23.25 2400
4:00:08 PM Bid 23.12 500
4:00:08 PM Ask 23.25 2400
4:00:08 PM Bid 23.12 500
4:00:08 PM Ask 23 100
4:00:08 PM Bid 23.12 500
4:00:07 PM Ask 23 100
4:00:07 PM Bid 22.84 100
4:00:05 PM Ask 23 100
4:00:05 PM Bid 22.84 100
4:00:05 PM Ask 23 2800
4:00:05 PM Bid 22.84 100
4:00:04 PM Trade 23 778
4:00:04 PM Ask 23 2800
4:00:04 PM Bid 22.84 1300
4:00:04 PM Trade 23 100
4:00:04 PM Ask 23 2800
4:00:04 PM Bid 22.84 1300
4:00:04 PM Trade 22.99 745
4:00:04 PM Ask 23 2800
4:00:04 PM Bid 22.84 1300
4:00:04 PM Trade 22.98 100
4:00:04 PM Ask 23 2800
4:00:04 PM Bid 22.84 1300
4:00:04 PM Trade 22.98 300
4:00:04 PM Ask 23 2800
4:00:04 PM Bid 22.84 1300
IMO- This bill, plus the President's position on it, lobbies in our favor, if SAM loses next month and appeals to the President's office.
"Congress Gets Tough On Intellectual Property"
Just-passed bill boosts federal resources to combat counterfeiting and piracy
Glenn Hess
"Lawmakers have approved sweeping legislation that is designed to bolster the federal government's ability to protect patents, trademarks, and other intellectual property (IP). The bipartisan legislation, the Prioritizing Resources & Organization for Intellectual Property Act (S. 3325), passed the Senate by unanimous consent on Sept. 26 and cleared the House by a vote of 381-41 two days later.
The bill significantly toughens civil and criminal laws against counterfeiting and piracy, provides law enforcement agencies with increased funding for investigations and prosecutions, and creates a new White House office of IP enforcement coordinator.
"IP makes up some of the most valuable and most vulnerable property we have," Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) said in a statement. "We need to do more to protect it from theft and abuse if we hope to continue being a world leader in innovation."
The bill is strongly supported by pharmaceutical companies, manufacturers, and others in the business community. "This is a win for both parties and, more important, for America's innovators, workers whose jobs rely on IP, and consumers who depend on safe and effective products," U.S. Chamber of Commerce President and Chief Executive Officer Thomas J. Donohue says.
It's unclear whether President George W. Bush will sign the legislation into law because the Administration opposes the provision that creates a new Cabinet-level post for IP coordination. According to the bill, the IP coordinator will be chair of an interagency committee tasked with devising a worldwide strategic plan to combat piracy and counterfeiting. However, in a joint letter sent to the leaders of the Senate Judiciary Committee on Sept. 23, the Justice and Commerce Departments says the establishment of an IP coordinator within the Executive Office of the President (EOP) is "objectionable" on constitutional grounds as a violation of separation of powers.
"While the Administration has been a longtime supporter of strong inter-agency coordination...the statutory creation of an EOP coordinator with the duties described in the bill constitutes a legislative intrusion into the internal structure and composition of the President's Administration," the letter states."
Appears to me that we are being boxed in at $24.00. I bought 1000 shs just now at 24 on the Schwab streamer, and the trade was executed instantaneously. There were only 200 shs showing at the Ask price, but the 1000 shs was divided into 7 different lots. Meaning, the Mmakers are lining up with lots of volume at $24 but showing very little.
Whizzer, Ghors, Loop, et al, Would any of you be good enough to address the question raised by djf?
TIA to all of you for your help and expertise.
Posted by: djfanning Date: Tuesday, September 23, 2008 12:10:20 PM
In reply to: gio who wrote msg# 233909 Post # of 233946
Remanded to what venue?
And if it's Batts, is there further direction?
Posted by: gio Date: Tuesday, September 23, 2008 11:03:41 AM
In reply to: None Post # of 233946
Nokia Batts case update.
09/23/2008 Transmission of USCA Mandate/Order to the District Judge re: 48 USCA Mandate,. (nd) (Entered: 09/23/2008)
09/23/2008 48 MANDATE of USCA (Certified Copy) as to 40 Notice of Appeal to the Federal Circuit, filed by InterDigital Communications, LLC, Interdigital Technology Corporation, Interdigital, Inc. USCA Case Number 08-1642-cv. Ordered, Adjudged and Decreed that the order of the District Court is REVERSED. The case is REMANDED for further proceedings consistent with this order Catherine O'Hagan Wolfe, Clerk USCA. Issued As Mandate: 9/22/2008. (nd) (Entered: 09/23/2008)
It's unfortunate that the only people seeing this "Mandate" news are on this board. It strikes me that the fact that we're moving from Batts, back to the ITC, seems worthy of a PR release, if not an 8K. Our Communication strategy continues to be wrapped in mystery IMO.
More on SEC rules on NSS and reactions to them.
SEC DEPLOYS RESTRICTIONS ON SHORT-SELLERS
By ZACHERY KOUWE
CHRISTOPHER COX Unleashes new rules.Last updated: 4:18 am
September 18, 2008
Posted: 4:06 am
September 18, 2008
The Securities and Exchange Commission met last night in emergency session to consider requiring hedge funds to disclose their short positions and institutional traders to secure their records in anticipation of subpoenas.
Under the proposals, managers with more than $100 million invested in securities would have to issue reports of their daily short positions.
The meeting came after the SEC adopted two regulations that go into effect today that will force traders and brokers to actually borrow shares used in all short sales, amid concern that so-called "naked short sales" are driving down prices by flooding markets with sell orders.
An additional rule makes it a securities fraud when sellers deceive brokers about delivering borrowed shares to buyers.
The new rules were called "too little too late," said Ed Herlihy and Ted Levine of venerable Wall Street law firm Wachtell Lipton Rosen & Katz, in a public memo.
The two lawyers have repeatedly urged regulators to re-impose the "Uptick Rule," which prevents investors from shorting shares of stock when the price is rising. They also called for the SEC to place limitations on short selling for a period of time to restore a "fair and orderly market."
"The measures adopted by the SEC fall far short of the type of bold measures needed to constrain the abusive short selling and rumor mongering taking place," Herlihy and Levine said in their letter.
Short sellers were having a "field day" before the rules kicked in, said Larry Tabb, founder of financial consulting firm Tabb Group. "This will stop in a few days and funds are getting in their last licks."
"It's very clear to me - we're in the midst of a market controlled by fear and rumors, and short sellers are driving our stock down," Morgan Stanley boss John Mack said in an internal memo to employees yesterday.
Lawmakers including Senate Banking Committee Chairman Christopher Dodd and regulators say short sellers may have contributed to a crisis by spreading false information and using abusive tactics to attack companies.
Hedge funds and other investors argue that poor business strategies are to blame, not short sellers.
In traditional short sales, traders borrow shares that they then sell. If the price drops, they profit by buying back the stock, repaying the loan and pocketing the difference.
The rules just approved by the SEC target naked short-selling, in which traders never borrow shares from their brokers. The agency is concerned that such a strategy can free investors to manipulate prices by placing unlimited sell orders.
http://www.nypost.com/seven/09182008/business/sec_deploys_restrictions_on_short_seller_129662.htm
The CEO of Overstock, Patrick Byrne, comments on the new SEC rules against Naked Shorting. Byrne was one of the original opponents of NSS.
SALT LAKE CITY, Sept. 17 /PRNewswire-FirstCall/ -- Overstock.com, Inc. chairman and CEO Patrick M. Byrne comments on the SEC's September 17, 2008 press release (see http://www.sec.gov/news/press/2008/2008-204.htm) that purports to protect investors against naked short selling.
Dr. Byrne commented, "At the core of the SEC announcement is a decision that if a hedge fund naked shorts a stock, its broker isn't supposed to let them naked short again. But guess what: they were not supposed to naked short in the first place. Instead of giving the buyer who receives the fail the right to put it back to the naked short selling participant, the SEC once again opts for no penalties for financial rapists.
"If the SEC were anything but a hedge fund bootlick," continued Byrne, "it would not have taken the half-measure of a pre-borrow requirement applied only as a penalty for those failing to deliver within T+3, but would have instituted a market-wide pre-borrow requirement (as it did in its July 15, 2008 Emergency Order protecting Upper Caste financial firms), and mandatory buy-ins at T+3.
"Some questions for the SEC:
1. How will the SEC determine whether an institution is in compliance with this rule? The only way to determine compliance is through an SEC audit, something that could only occur months after the fact. In the case of a bear raid, that will be too late.
2. Where is the 'buy-in' requirement? Under the new SEC rules a crooked hedge fund can still naked short sell without settlement and keep that short open indefinitely. It appears that only future naked short sales will require a pre-borrow and that there is still no closeout requirement for failed trades.
3. What of manipulative day trading? Chairman Cox has admitted that the financial stocks did not have a significant level of naked shorts, but rather collapsed under day trading activities. The new rule fails to address this, the very activity that generated the need for the July 15, 2008 emergency order. The manipulative day trading short seller never has a position open for three days. However, under the new rules, he can still use a single locate multiple times to create the best leverage possible to drive natural investors out of the market.
4. Where are the penalties? Without meaningful penalties, these rules have no bite. The SEC needs to make sure that the rules are strictly and aggressively enforced -- both for failures to deliver that occur within the CNS system and outside the CNS system in ex-clearing trades, where, I suspect, there is naked shorting that makes the object of current SEC concerns look like small potatoes.
"Rule 10b-21, the short selling anti-fraud rule, is a carefully contrived joke. It moves from a low-penalty too-vague-to-enforce rule, to a high-penalty too-vague-to-enforce rule. Without strict and aggressive SEC enforcement (for which the SEC has zero demonstrated record) it will be just more lines of meaningless pabulum in the Federal Register.
"On the bright side, the SEC has eliminated a major loophole in Regulation SHO, the options market maker exception. There was never a good reason why options market makers should have been allowed to naked short and fail to deliver in perpetuity. For taking this long overdue action, I applaud the SEC.
"What is needed is a Congressional investigation into the abortion that is our nation's stock settlement system, focusing especially on the DTCC. A healthy next step would be to unplug the SEC and move its functions into the DOJ."
Apparently the Naked Short Sellers will be able to drive a truck through the holes in these rules. From another Bd, here's a letter to SEC Chairman with an explanation of how they'll do it. (Dave Patch has been a well known critic of NSS for years)
Dave Patch addresses the SEC on recent action against NSS ( in an email to the Chairman, Commissioners, and designated officials )
From: Patch, David
Subject: SEC Denies Public Protection - AGAIN
Mr. Chairman,
I must commend you on the steps taken today towards addressing naked short sale abuses. With Congress, public issuers, and investors alike seeking to have you and your staff tarred and feathered for the egregious negligence executed under the umbrella of federal protection you stepped out today and threw caution to the wind and told us all to pound sand.
I fully understand that the Commission staff and the Office of Economic Analysis is not convinced that this is a real issue that is destroying public confidence in our Capital markets. I understand that the OEA is not committed at looking at this issue seriously by dedicating the time and resource into analyzing actual trade data before opining on how this may or may not impact our markets. And I understand that private meetings with wealthy short sellers such as Jim Chanos provide opportunity for the Commission to gain support material into the positions taken despite the conflicts such meeting may create. But what I don't fully grasp is why the general public must carry the burdens for the SEC's negligence. Why should we be the people who must work longer to protect our retirements? Why should we be the people who must cut our expenses because we can't afford to pay our bills due to the destruction of our personal savings accounts? Why should we suffer the pains so that people like jim Chanos and his peers can be provided ample opportunity to destroy public companies, local communities, and the financial stability of families across this nation.
Today the SEC took yet another half step to a whole problem. The SEC maintained loopholes in the short sale process so that certain short sellers would not have to carry the burden of expense in the execution of rapid short sales never intent on existing by settlement day. These are the very same short sellers who destroyed confidence in our financial markets and now the short sellers who will continue to destroy other markets and other public issuers.
Let me help you out here:
Hard T+3 Close-Out Requirement; Penalties for Violation Include Prohibition of Further Short Sales, Mandatory Pre-Borrow
The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.
If a short sale violates this close out requirement, then any broker-dealer acting on the short seller’s behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer’s activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.
Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.
Under this rule there are serious flaws in the Commissions thinking.
1. To determine a lack of compliance to this rule it requires the SRO's or SEC to conduct an audit of the failing firms. These audits are not done daily but periodical. By the time the violation is identified the culprit is long gone with the monies and the markets manipulated by the potential abuse. This rule is a responsive rule instead of a pro-active rule.
2. This rule, as it stands will yield compliance violations at the BD level and will rarely result in penalties imposed on the originating seller. Compliance violations rarely achieve the penalty status as that which investors lost by the violation itself. This rule can likewise by circumvented by engaging in a separate violation; marking the trade long and failing that trade instead.
3. This rule does nothing to address the initial abuses of multiple locates on a common share during the time of trade execution. Since multiple locates can exist, fails will exist. This also allows, instantaneously, for there to be too many short sales executed at a single moment in time. Such trading creates the leverage the short seller need in order to drive down a market.
4. The day trader. How does this rule impact the abuses associated with the rapid day trading short seller? Using multiple locates and acting in concert with other hedge funds, a market can be destroyed within the 3-day settlement window and so long as the trades are covered by T+3 the SEC and SRO's have no authority to take enforcement action. This rule simply redefined the window of time a short seller has to abuse a stock and create profit and with sophisticated computer programs the systems will be set up to cover this window. If a portion of the trade falls into the settlement window the trade will fail but…the SEC does not require a mandatory close-out with guaranteed delivery, the Commission only restricts future short sales until it is closed out.
5. Close-out of fails. What ever happened to mandatory w/Guaranteed delivery? The NASD presented the SEC with an argument in 2004 that identified how failed trades were not being closed out because it was not "cost effective" for the failed party to do so. The SEC continues to fail in adopting such language. In fact, the Commission is aware that firms have engaged in rolling failed trades to restart the clock. Nothing in this law changes that tactic. Nothing in this law requires that on T+4 the failing member must go into the market at market open and purchase this stock under guaranteed delivery status. Without such specific language members will game the system to make the close-out profitable.
Mr. Chairman your time is limited but your legacy will live on forever. This Commission will be remembered in history as the most conflicted of all time. The Comission staff that allowed a group of bandits to run rampant across our capital markets and destroy so much of our nations family wealth.
There will be people who no longer can afford to retire, as well as people who will lose their homes and their familes due to financial ruin and it will all be due to the negligence of this Commission.
The Commission has failed to hear the voices of the people and instead has listened to those who have their own self-interest in mind. This is the grandfather clause all over again and this delay is only a delay that will most likely force Congress to step in and make law for you.
Shame on you.
Dave Patch
Magilla - Excellent article! I believe that NOK's plight, described in this article, could be the straw that breaks the back of NOK's resistance and brings them into the 3G fold of IDCC.
They've been throwing a ton of resources at their weak position in the US market to try and gain share. And, I don't believe that they have the correct answer yet for the AT&T, Verizon, T-Mobile, etc., phone calls that want to know whether they're going to be around for this Christmas season.
As soon as the their name appears in the ITC calendar, we're almost done. IMO
Here they are: A day late and a dollar short. IMO
http://sec.gov/news/press/2008/2008-204.htm
SEC Issues New Rules to Protect Investors Against Naked Short Selling Abuses
FOR IMMEDIATE RELEASE
2008-204
Washington, D.C., Sept. 17, 2008 — The Securities and Exchange Commission today took several coordinated actions to strengthen investor protections against “naked” short selling. The Commission’s actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.
“These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling,” said SEC Chairman Christopher Cox. “The Enforcement Division, the Office of Compliance Inspections and Examinations, and the Division of Trading and Markets will now have these weapons in their arsenal in their continuing battle to stop unlawful manipulation.”
In an ordinary short sale, the short seller borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price). But in an abusive naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling conditions.
Today’s Commission actions, which are the result of formal rulemaking under the Administrative Procedure Act, go beyond its previously issued emergency order, which was limited to the securities of financial firms with access to the Federal Reserve’s Primary Dealer Credit Facility. Because the agency's exercise of its emergency authority is limited to 30 days, the previous order under Section 12(k)(2) of the Securities Exchange Act of 1934 expired on Aug. 12, 2008.
The Commission’s actions were as follows:
Hard T+3 Close-Out Requirement; Penalties for Violation Include Prohibition of Further Short Sales, Mandatory Pre-Borrow
The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.
If a short sale violates this close out requirement, then any broker-dealer acting on the short seller’s behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer’s activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.
Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.
Exception for Market Makers from Short Selling Close-Out Provisions in Reg SHO Repealed
The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(b)(3) in Regulation SHO. This rule change also becomes effective five days after publication in the Federal Register.
As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling.
Rule 10b-21 Short Selling Anti-Fraud Rule
The Commission adopted Rule 10b-21, which expressly targets fraudulent short selling transactions. The new rule covers short sellers who deceive broker-dealers or any other market participants. Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This new rule is effective immediately.
# # #
http://www.sec.gov/news/press/2008/2008-204.htm
Fed to Offer Bridge Loan to A.I.G. and Take Control of Firm
September 16, 2008, 5:24 pm
Updated: The Federal Reserve plans to offer an $85 billion bridge loan to the American International Group in return for control of the ailing insurance giant, people briefed on the matter said Tuesday night.
In an intense discussion at the Federal Reserve Bank of New York on Tuesday afternoon, the Fed and a group of executives from JPMorgan Chase, Goldman Sachs and other firms agreed that a banking syndicate to provide the $75 billion in emergency financing could not be arranged by Tuesday night.
If the Fed intervenes, it would be an eleventh-hour bailout of A.I.G., whose debt downgrades by major credit ratings agencies could have sparked a debilitating need for additional capital.
Concerns about A.I.G.'s health have gripped the financial markets, as many investors feared the insurance giant would follow Lehman Brothers into bankruptcy. An A.I.G. collapse could be an even bigger systemic threat to major financial firms than Lehman's downfall, because of the company's dominant position in insuring mortgage-linked securities. Should A.I.G. fail, it could kick off a wave of additional write-downs at banks already staggering from the credit crisis.
Kenneth D. Lewis, the chief executive of Bank of America, told CNBC on Monday that virtually every Wall Street giant would be touched by an A.I.G. failure. (In a surprise commingling of financial crises, the landlord of Lehman's London office said the bank's rent payments were insured by A.I.G.)
Gov. David A. Paterson of New York, whose insurance department supervises A.I.G., on Monday allowed the company to borrow $20 billion from its subsidiaries, and urged the Fed to relent and offer financial aid. Governor Paterson told CNBC on Tuesday morning that the company could survive only one day without the financing.
Andrew M. Cuomo, New York's attorney general, on Tuesday also urged the Fed to help, arguing that it was too connected with major banks to be allowed to fail.
But other top politicians, including Senator Richard C. Shelby of Alabama, the top-ranked Republican in the Senate banking committee, and Senator John McCain, the Republic presidential candidate, have both expressed opposition to federal help for A.I.G.
The magnitude of a potential A.I.G. collapse compelled a group of top banking executives to huddle at the New York Fed last weekend. Throughout the discussions, however, Treasury Secretary Henry M. Paulson Jr. insisted that no taxpayer money be used to rescue the insurer. The federal government has already brokered the sale of Bear Stearns and the rescue of the mortgage financing giants Fannie Mae and Freddie Mac.
A.I.G.'s collapse seemed so likely on Tuesday that the company hired the law firm Weil, Gotshal & Manges — which is also handling the Lehman Brothers bankruptcy — to draw up bankruptcy papers.
Many of A.I.G.'s subsidiaries have drawn down on their credit lines, people briefed on the matter said.
Shares in A.I.G. rebounded sharply after speculation arose that the Fed had changed its mind, closing at $3.75 on Tuesday, down 17 percent. They had fallen more than 60 percent earlier in the day, and have plummeted nearly 94 percent over the last 12 months.
Most of A.I.G.'s businesses, including a dizzying array of insurance companies, an aircraft leasing business and an automotive unit, are healthy. But its financial products unit in London, which underwrote derivatives insuring mortgage-linked securities, threatens to drain cash faster than temporary financing can be arranged.
The ratings cuts by Standard & Poor's and Moody's now allow counterparties in those derivatives contracts to require A.I.G. to post more collateral. According to a regulatory filing made by the company last month, it may need to post at least $10.5 billion in fresh collateral very soon.
People briefed on the matter told The Times that if JPMorgan and Goldman Sachs were able to raise a $75 billion credit line by Tuesday, it could avert an escalating series of collateral calls. But it was unclear whether they could put together such a complicated package in time.
A.I.G. has also considered sales of virtually all of its business assets, but conducting such sales quickly would be hard.
During the weekend, A.I.G. had been negotiating with three private equity firms for capital infusions. But the company rejected an offer from J.C. Flowers & Company to buy preferred shares, because the bid included an option to buy the rest of the company for $8 billion, a person briefed on the matter said.
Two other buyout firms, Kohlberg Kravis Roberts and TPG, withdrew their offers to buy preferred shares as the Fed made clear that it would not provide any sort of backstop.
–Jenny Anderson, Michael J. de la Merced and Eric Dash