Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Miles OT - The bet
OT: Ronnie and Raymond: I'm having a senior moment and no longer have any clue on the bet. However, I stand fast in my position, whatever it was. Raymond, you need to watch our backs or we'll be buying the teacher a ticket to Houston.
Having read, well skimmed, the posts back and forth about the bet, I can definitely conclude that no matter what happens there is going to be different opinions about who won. I am proposing that you both agree to binding arbitration to resolve who really won. I volunteer my services as the arbitrator. However I can here Ghors protesting already... you're a CPA, Ronnie's a CPA, you're biased. Okay, you can pick an attorney for a second arbitrator and we'll pick someone neutral for a third (not a bean counter or an ambulance chaser).
Maybe we could choose Data, but too many people don't trust him because he somehow splashes cold water on wonderful scenarios of IDCC riches. Yeah, he's usually been right, but still we want to avoid controversy.
Olddog would be a good choice - he could pull up all the relevant posts, analyze them and lay out the proper decision rather quickly, but then how could we as arbitrators rack up the billable hours. No, that would never do.
Dave Davis? On top of things, straight forward, helpful. Again, not enough billable hours.
Bulldzr, nah. He'd get feed up with the process and want to cut to the chase too soon. Needs to get to a softball game.
Teecee, a man of thoughtfulness, quite deliberation and civility... um, maybe not.
Danny Detail, who actually does possess those traits. Nope, too verbose. With me and him on the same arb panel, the decision would run so long no one could ever stay awake to the conclusion.
Nieves - he'd be too worried about being the first one to post the results to concentrate on the proceedings.
dmiller - No, he wouldn't help us get the answer, he'd just tell each of us that we are wrong.
mschere would provide tons of input, however his decision would be based on whatever was the most optimistic for IDCC.
Corp Buyer... yeah, right, I might as well suggest Bin Laden.
I know, let's get someone clueless.
Spree! The only person I have on ignore because I found his posts totally lacking anything relevant and his opinion seemed to change wildly from moment to moment. No, he'd probably appeal the final decision himself 15 minutes after it was rendered.
AMS13SAG Yes, clueless, but talk about a person with prejudices. And working with him would be listening to someone scratch nails on a blackboard. No, clueless isn't the solution either.
Ah, what's the difference? Whatever we, the binding arbitrators decide won't matter because the loser will appeal to the Supreme Court - JimLur. He'll make a fair and reasoned decision and the loser will pay. However the winner will pay too because the arbitration fees will be far more than the bet.
Okay, I'm a bit burnt out from tax season and needed to take a mental break this morning. Things can get lost in cyberspace, so let me make clear that the above is all in the spirit of fun and humor, so if I've insulted anyone please accept my apology. I didn't mean to disparage anyone (well, except that **3 paragraphs of descriptive rant REDACTED** AMS).
IDCC is near its all time high (bubble excluded) and potential catalysts are all around. It is a great and exciting time to be an IDCC shareholder.
Frank
Buybacks help long term
It seems to me that buybacks only help the folks that are exiting.
On the assumption that IDCC is going to have ongoing recurring revenue and trade based on the fundamentals, P/E ratio and the like, then reducing the outstanding shares increases the income per share and therefore the share price.
You're right that buybacks on help those that are exiting, but we all hope to exit at some point, right? It will increase the share price by about 6% less about $2 per share for the decrease in cash. The breakeven point is about $1.60 per share of income. After the buy back the income per share would be $1.70. Applying a multiple of 20 to the 10 cent difference adds $2.00 a share to the price, which offsets the presumed $2.00 per share decrease in market price for the decrease in cash.
More simply, if the share price goes up after the buyback we done good, if not we didn't.
Since I think income is going to be rising well beyond $1.60 and the share price is headed north along with it, I LOVE THE BUYBACK!
LG 14.5 million/quarter
You were right on - confirmed in call. Nice work.
Rmarchma, LG license signed 1/18/06...
so 1Q revenue will only include the prorated amount following the signing (i.e., $11+ million). Future (2Q 06 and beyond) quarterly LG revenue should be about $14.5 milion.
http://www.interdigital.com/uploads/LGE%20Form%208-K%20-Final.pdf
texb
I love the buyback
It invests the free cash flow back into IDCC, effectively giving us, the shareholders, a bigger stake in the company. I believe IDCC is a great long term investment so having a buyback is a wonderful use of the funds. I get nervous about a company having a lot of cash on hand. They tend to want to buy other companies and I've seen others lose a lot of money on these investments. If a GOOD opportunity arises, like Tantivity, great, go ahead. It's when the companies go shopping that the less succesful acquistions tend to happen.
My wish is that the company buys back shares until the outstanding shares are at 50 million, then continue to buy shares to offset option grants to keep the outstanding shares constant. That will also clearly show the cost of the option plans. Once that is accomplished and the company generates the ongoing free cash flow I would love to see a regular dividend declared. Imagine what a $2 per share dividend ($100 million a year) would do to the share price. It would also placate those wives or husbands that have had their doubts about those of us who have invested so heavily in dollars and time in this stock when those checks come in.
LG Income
First Quarter 2006 Outlook
Rich Fagan, Chief Financial Officer commented, "In first quarter 2006, we expect to report revenue of $50 million to $52 million. This revenue amount includes slightly more than $11 million related to the recently announced patent license agreement with LG (for which we are recognizing revenue associated with $285 million in total expected payments on a straight-line amortization over the approximately five-year term of the agreement)
Instead of focusing on the minute to minute changes in the share price (unless you are thinking of trading today), let's analyze the news. From the above it appears that the LG money is split $220 million for future use (11 million x 4 quarters x 5 years) and 65 million for prior usage. Is anyone able to piece together an analysis of LG's sale mix and come up with what we are getting for 3G?
Why we are being "pummelled"
The stock ran up 10% over the last week in hopes of possible big news. There was no big positive surprise in the earnings announcement. Thus those who bought on the come are selling. The stock is still trading at a 52 week high if you ignore the pre-earnings runup that started a week ago Monday. Nothing surprising or worrysome going on IMO.
Thanks Mr. Dzr,
It sure looks purrty! Hope the CC next week will give the market reason to look at this level as being cheap.
I was going to post that chart too!
However I discovered I am technically challanged and couldn't paste it. What I liked was running it with comparisons to the Nasdaq, QCOM and NOK. While the chart is impressive on its own, when compared to those benchmarks the strength is even more impressive. It is fun to look at and was fun watching unfold this week.
Frank
Earnings Conference Call Thursday, March 9 10AM EST
http://biz.yahoo.com/cc/3/66103.html
Institutional ownership
I guess I see things differently than most here. I like to see institutional ownership low, not high. When an institition does not have a position in us they are a potential buyer. When they have a small position the are a potential buyer or seller. When they have a large position they are a potential seller as they need to stay diversified.
If we are talking about the future I want institutions to be buyers because that will drive the price up, but when we are talking about the past I like to hear that institutions have sold because that lessens the potential selling pressure in the future.
The only reasons I can see to think otherwise is if think institutions are strong hands that will hold the stock long term, effectively reducing the float (no way IMO), or you believe that the institutions know better than the rest of the market, so their actions signal the future direction of the stock. I don't happen to believe that either. If I did I'd be in managed accounts like our friend Brad (Danny Detail) and just throw speculative money at IDCC.
Frank
To clarify, March 2 at 12:27 PM EST.
03/02 at 3:27 Pacific time
Breakdown of LG contract
I called Janet Point and asked her when we might expect information on the accounting for the LG contract. She said that the accountants were working on it and hoped that they would have it by the earnings release in early March. However, she noted, it occured in Q1, not Q4, so it won't affect Q4 and therefore it is possible it may be later than that.
I asked if there was any information as far as amounts related to past usage, 2G, 3G. She said no.
Thanks Ronnie,
Your detailed summary of income is a part of your great contributions to this board. I am sure I speak for many of the lurkers when I say thank you for all you do for us.
Frank
Deferred tax asset recognition
This is done when the entity determines that it is probable that the tax asset will be utilized. With the LG contract the tax asset will absolutely be used up. While the accounting is not determined yet, there will be income that will use up the tax benefits we have carrying forward.
Tom Carpenter's report
I love his report. It is very optimistic yet realistic. A great combination.
I wonder why he is projecting such a relatively low amount from Nokia. They have 5x the market share of LG, yet he estimates annual per share revenue of $0.64 from LG and $1.00 from Nokia. I understand that Nokia may get a volume discount, but this seems disproportionate.
Also what about MOT. Is that old loss going to give them a free ride on 3G? Lots of new patents since then and they all aren't continuations of what MOT beat. But that can be on the back burner for now. Let's get the other big 5 signed.
LG paid more because it includes 3G
That's why this is so important - IDCC finally have monetized our 3G IP. The next step is to find out just how much IDCCs 3G is worth.
Management's discussion of contract terms
Has anyone gotten an indication from Janet or anyone at the company when they expect to provide information on the accounting for the LG contract? We need to understand what they're getting paid for. How much is old 2G, how much is 3G, is it a fixed amount or can we receive additional amounts depending on volume? Once we have that info then we can back into the breakdown of the contract and begin the big fun of figuring out what Nokia, Mot, Samsung and the rest should pay. I think we're going to need a calculator with a lot of zeros.
Dave, you ain't alone.
Is anybody else having a hard time getting any work done?
Or is it just me.
This is FUN!!
Favorite line from Frank Marsala's report
Dare we say "watershed event".
Very funny and demonstrates his history following IDCC.
The best line, however, is
Raising to Strong Buy
Frank
Thanks Matt,
You're a class guy and run a great site.
Jan option holders
You've got NO recourse. There are specific rules about when information must be disclosed. Three business days. IDCC met that requirement. Unless there is evidence that they delayed the announcement to benefit themselves because they sold options (no way), there is nothing to pursue.
IDCC did nothing illegal. They did nothing unethical or improper. Enjoy the gains on your stock holdings. If you don't have any, you're just a gambler, not an investor. Sometimes the breaks go your way and sometimes they don't. Nobody likes to listen to bad beat stories, and don't blame the dealer for turning up the winning card after you folded.
Nokia appeal?
Do we know if Nokia filed an appeal in New York?
Given the low cost it would be surprising if they didn't. If it was not filed, I would think it indicates either Nokia is facing the reality that their position is groundless and realize that delay is not worth the additional legal costs, or that there is a settlement near completion. Either way is positive for IDCC, with the unfathomable (to me) exception that they settled on the arbitration litigation for a compromise figure and it is not tied to any of the other issues.
Thanks,
Frank
OT: Broncos tickets
I'm in California and have a friend who is desperately trying to get tickets for the game on Sunday. If anyone knows of a source please e-mail me directly at fmilt1@yahoo.com.
Thanks.
Is IDCC IP essential for GSM?
I'm not a techie, but my understanding is that IDCC's air interface was essential. This is the second time I'm seeing this statement.
Some industry observers estimate that up to 75 per cent of the world’s GSM phones use technology based on InterDigital’s designs.
I'd love some feedback on what we own. Has someone engineered around our patents and 25% of the market is using that IP and avoiding IDCC's? This would seem to indicate that IDCC's technology is not essential. That would be okay if it is still the most commercially viable, but it is not nearly as strong as essential.
Thanks,
Frank
Whizzeresq
This should be a rather speedy process, since it only would involve filling in the blanks by plugging in the actual sales.
When has ANYTHING to do with IDCC been speedy? I hope and pray you are right, but I'm not nearly as optimistic. With Nokia dragging its feet, lawyers paid by the hour in no hurry, and judges that want to be home to dinner on time every day, it takes four days to play the minute waltz.
Going to court
Apparently we cannot get the major players to sign a reasonable license. Why should they? If you had a choice between paying a royalty or being called nasty names on a message board, which would you choose? They have no compelling reason to license. IDCC needs to compel them, and the only way is through the courts. That's why I wish they would initiate suits in any jurisdiction where there are significant sales. Without the threat of having a rate set that they don't like they are much better off delaying.
Please tell me I'm wrong - I'd love to hear a reason why someone is going to sign that benchmark 3G license without going to court. It should have happened in 2004, and we're almost in 2006. Nice guys finish last.
$3.00 2006 earnings won't rocket share price
Dave,
The stock price is valued based on recurring revenues. Getting the Nokia/Samsung money will help the price by the amount of the increase in cash per share, possibly a bit more, however the $3.00 won't be used as the earnings for PE multiples. This is especially true with the 2G revenues dropping off at the end of 2006. This is why it is imperative, in my opinion, for IDCC to get in court and start suing multiple infringers in different jurisdictions to get resolution on IDCCs IP value and start getting paid. Collecting years after the fact is valued far less than recurring earnings. If they can't get a settlement that will allow them to license the bulk of the market they should go to trial.
Delay results in compromise on past amounts due, lumpy, non-recurring revenues and failure to reach full valuation. If we lose, then I am wrong about IDCC and my investment will suffer. But at least we get a decision. And if we win and can actually license for 3g and get paid a reasonable royalty from most of the 3G sales then we can start talking about the Rookie 100. It's time to move. If we're still in this position a year from now without 3G to replace 2G it won't be pretty.
IDCC Investor = Sisyphus is quite an apt analogy. Very good Hardball.
OT 7/5 system crash
That was not coincidental, that was caused by the huge volume of activity caused by the IDCC news. I HOPE we get to test out there ability to handle a posting surge again soon.
Olddog, Thanks. You're a big help, as always.
OT: For Qualcomm'ers only
Last week I took my son to UC San Diego for his first year of college. He's majoring in computer engineering. I was wondering if anyone has any information on internships at Qualcomm. He's bright and kind of nerdy, so I'm thinking it could be a great fit. So if anyone has any info please e-mail me offline at fmilt1@yahoo.com.
It was interesting that at the orientation they mentioned that Irwin Jacobs was on the faculty at one time, and one person (a self proclaimed "nobody) mentioned that he met him once and they chatted for 30 minutes. He said IJ was a down to earth nice guy.
Thanks,
Frank
PS - For all you long and loyal's who had to read this, please don't tar and feather me. Realize that QCOM is not the evil empire, they are a successful competitor that we are trying to emulate.
Lastchoice, you answered your own question perfectly
when will WS step up to the plate here? i guess when idcc sign a top-five 3g handset player.
nok
s/e
sam
lg
mot
These other licenses we are getting are nice. They show that we have something worth licensing. However for us to move significantly higher we have to get a 3G license with a big fish. So every time we get some good news, come back to your post and remember that if it isn't one of the above, it is not a big deal as far as short term share price. What it does do is build the base a bit and show that licensing is progressing.
Frank
Cash flow
Cash flow measures the change in cash. Therefore the use of the NOL against taxable income on it's tax return will help the cash flow when it is utilized by reducing the amount of actual tax paid. In IDCC's case, this is not an optional treatment on the tax return.
Where IDCC does have some discretion is on the financial statements. Management determines when they feel that benefit is likely to occur and can offset and can credit the P&L as they deem appropriate. However this does NOT affect the cash flow. As Olddog pointed out, the income from the recognition of income tax benefits was reversed on the cash flow.
IDCC uses the indirect method to do the cash flow. They start with taxable income and then make adjustments for items of income and expense that do not effect tax. So things like the recognition of the tax benefit that increase income in whatever quarter managment deems appropriate are adjusted out of the cash flow. The beginning cash, change in cash and ending cash are not affected by the accounting method (cash, accrual, GAAP) or the accounting estimates (depreciation rates, income tax accruals) used. Those affect the income, but cash is cash.
This is greatly over simplified, but I hope it provides some clarity to those of you smart enough not too muddle your head with boring accounting stuff.
Frank
OT: Loop's Giants 2, Bulldzr's 'stos 0
I'm also a long suffering SF Giants fan, so since you dissed them I had to take this rare opportunity (especially this Bonds-less year) to brag on my boys of Summer.
Good luck to your team in the post season chase - Loop and I will be saved from any such stress. Take care buddy.
Frank
Perfect. Thanks.
How do I remove a person mark?
Why is the stock price languishing?
The Nokia award was mildly positive. I think it fell within the range of expectations, so was largely priced in to the stock. It did eliminate much of the risk in IDCC which would tend to boost the share price. However Nokia's position of fighting this and dragging it out by every means possible has put us right back to where we were for generating recurring revenues, which is waiting, waiting, waiting.
If Nokia had accepted the arbitration result, then IDCC could settle with Samsung under the MFL and gone after the other 2G holdouts, generating significant cash flow and some 2005 and 2006 recurring revenues. Additionally having the trigger issue decided could give some comfort to potential 3G licensees that Nokia would have to pay royalties under the same fee structure, so they would not be put at a competitive disadvantage. Nokia's fighting this just puts all that on hold. So the price is back to the pre-arbitration levels because there is no impetus for anyone to license with IDCC. There is very limited downside for delay for the licensees. Maybe miss out on the prepayment discount, but as we found with 2G, once the amounts get big and old, compromise somehow becomes expected. So not only do the obstinate bastards get to pay later, they get to pay less. This hurts IDCC even more because visible, growing recurring income get valued at multiples, while lump sum payments don't. So even if we were to get 20% more years down the road, the stock price would be lower the whole time, and it would take a while after getting the award to get properly valued because the street wants to see actual consistent results.
We are priced at $17 not because of disappointment or uncertainty about the arbitration result, but because people are seeing 3G turning into what we had for 2G. Fighting to collect, ending up getting paid years late and hundreds of millions short. Nokia is going to fight this every way they can. They are almost certainly supported by all the other manufacturers, including that ethical corporate citizen, ERICY. It is in their mutual interest. As much as they may be competitors, they aren't going to cut off their noses to spite their face. Nokia is absolutely going to continue with their challenge to the award. The good news is that the street knows this and it will not cause any significant change to the price. However the time playing nice is over for IDCC.
We have cash - it is time to use it to enforce our patents. Sue companies in jurisdictions around the world. Pick favorable venues and the weakest defendant. Sue different companies in different countries so they all have to start from scratch. Get some wins and then use that precedent to pursue others. The present strategy is clearly not working - we are not getting licenses and there is no reason for anyone to sign. There are no consequences to delay for anyone except IDCC. We need to force the issue now. Court action will take years, so the time for waiting is long past. We need Uncle Billy to get up, go to the window and yell "I'm as mad as hell and I ain't going to take it anymore" and then have his consigliere go make these manufacturers an offer they can't refuse. Does Jorma have a horse?
Amen brother
Billyjo,
Re: Company bashing
The problem is that IDCC is like that problem child who is very intelligent, but never seems to perform up to his/her potential in school. Teachers (wall street) keep giving the child grades of "C" (lack of price appreciation) when we parents know that they should get "A"s. We sometimes think that they play too many video games (compensation) rather than doing their homework (signing licenses). We are frustrated, uncertain as to what to do, and vacilate between positive reinforcement and spanking.
Do I dare carry this analogy any further???
Regards,
Q
Loop, Thanks for all your contributions. eom
Re: Nokia's statement
"Nokia is pleased that all three arbitrators concluded that the royalties being sought by InterDigital were unwarranted and reduced them by more than half," the firm said in a statement.
What this can be interpreted to say (and I think it's what Nokia would say) is that all three thought IDCC's amount was too high. The agreed upon amount was less than half of what was asked. So the Nokia arbitrator could have said it was zero. Of course, the IDCC arbitrator might have said it was $100 less than what IDCC wanted and their statement would still be true. Just spin-misters playing with words. All that matters is the amount and timing of the payments.
The Count
Bill, you're right. ENOUGH!
Let's quit wasting this precious opportunity
Thousands of investors have been visiting this great board this weekend for useful information about IDCC. The information would help them make decisions relative to investing (perhaps for the first time) in IDCC.
<snip>
One or two well reasoned responses should be sufficient. I suggest everyone else BACK OFF.
Rational, finely tuned response is helpful. But the current "the sky is falling" silliness here is hurting our investment far more than Corp Buyer could do, if that was his intention.
This is crazy. How much power do you think a poster has to move the stock price, especially for more than a day? Some of the most ardent attackers of Corp buyer keep preaching that it's all about the institutions. Does anyone think they are persuaded one bit by his posts?
When he posts something you think is wrong, see if there's been a reasoned response to rebut him. If not, post one. If there is, then move on. PLEASE.
We've had some good news, so now more than ever is the time for posts of substance. Ronnie can update his list of reasons to own IDCC. Mschere can post some old news stories that show IDCC's potential. Loop can lay out his vision for the future. Many, many other excellent contributors can add valuable information and insights. Don't let one person become the focus. That keeps this board from continuing its great accomplishment of providing valuable information to a community of investors to enable us all to better make decisions about our investment in IDCC.
The tag line to the referenced post says it best.
Jim Lurgio has built and maintained the very best board on the INet. Let's keep it that way.