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"If you think the arbitrators are blind then you are too and should bail!"
I should sell? Why?
Howard set the bar by openly declaring what money was owed. Then IDCC publishes this money owed in the 2002 annual report.
March, Nokia date set in Jan. Stock crashes.
May, IDCC leaves out any reference to specific Nokia monies. These references are removed from the annual report as well as the investor presentations.
I beleive Nokia now has ammo to reduce the IDCC settlement. Not good news but I never expected to collect $300 million from Nokia for 2002, 2003 and 2004 to begin with. This also explains why the stock has not bounced back to the 20's level with all the recent good news.
I still do not beleive IDCC will lose. I just think that we will not see Howards numbers and I also feel IDCC doesn't think they will get them either. That is why they so mysteriously disappeared in May,
NO APPEAL
The Company intends to vigorously contest any Nokia position to the contrary in the arbitration.
This sentence is the best news of the day. The cards are now on the table and ready to be played. No appeals, no court delays. The only positive that comes out of this is now Nokia does not have to fight and appeal, it won. They can go to arbitration with all the ammo they need.
It is anybody's guess right now. One thing I know for sure we will get no comments from IDCC.
The playing field just got leveled and it looks like those blanks that Howard was waiting for are being filled with ZEROS from Nokia.
Makes some sence now with IDCC backing off the published numbers in the Nokia and Samsung arbitration. I bet that those high numbers are affected and the posibility that a re-instatement would hurt IDCC chances of collecting the full amounts caused management to no longer use the estimates.
Now we know where that 10 points went. We also now know why we are priced so low.
Individual shareholders are usually the last to get the story. Normally the truth will lie somewhere in the middle. In this case let us hope it is closer to IDCC's middle than Nokia's.
Clearly no appeal.
"The Company continues to assert in the Nokia arbitration that issues of patent validity and infringement are not relevant tothe arbitrable royalty dispute.The Company intends to vigorously contest any Nokia position to the contrary in the arbitration."
Looks like they will fight this out in arbitration.
Price seems pretty stable. Low volume. News was probably priced in already. IMO, when Nokia arb was delayed to Jan. the $10 a share from $27 to $17 was Nokia arbitrage money which was priced into the stock. At $17+ a share $0 Nokia dollars are priced in.
It depends on the company. Novatel for instance does not have the deep pockets of a Lucent. They are now producing UTMS products which infringe on IDCC's patents.
"Novatel Wireless, Inc. (Nasdaq: NVTL), a leading provider of wireless broadband access solutions, today announced the Federal Communications Commission (FCC) regulatory approval of the Merlin U520(TM) Wireless PC Card Modem based on Universal Mobile Telecommunications System (UMTS) technology."
Why would they spend money to defend a law suit that they will lose? I do not beleive they have much in the way of past due infringement money that they would have to pay so why not sign.
I fully expect this to get done soon. The revenue is probably not very relavant but the actual signing of another company will only advance IDCC's momentum.
But you can compare percentage increases. 141% increase from the same quarter last year was huge. IMO, the price rise will be in direct correlation to the revenue rise.
It is really not about the share price but about revenues.
RIMM had $200+ million in revenues last quarter.
"Revenue for the fourth quarter of fiscal 2004 was $210.6 million, up 37% from $153.9 million in the previous quarter and up 141% from $87.5 million in the same quarter of last year."
IDCC's revenues while consistant and impressive are not explosive at this time.
The two false starts have caused a buyers beware syndrome. IMO, buyers are in a "wait and see" mode. The last months volume has been very low. Quarterly revenue projections as of today are still flat at $27 to $30 million a quarter. The main reason we did not get a SANYO pop is because the company has yet to turn this deal into quarterly revenues and EPS numbers.
I don't expect a RIMM SHOT or a TASR LASER until after Nokia is resolved or if we get LG and/or Motorola.
Glad you are on our side. Kind of like the George S. Patton of the board. Get those Son's of #$#$$"'s. LOL.
The fact that Wells and Piper are covering IDCC is a very big positive. They are waiting for Howard's "Economic Discussions" to bear fruit. The Sanyo announcement is not what they were looking for. It may turn out to be very lucrative for IDCC but they are still selling into their existing customer base.
The fact is the analysts believe IDCC is a very risky investment with the Nokia arbitration case pending. They think that this case is a DAM, preventing the name companies, LG and Motorola from signing on. With 7 months left to the arbitration hearing a Sanyo upgrade did little to change their minds. Remember we have had 2 10 point haircuts related to the Nokia settlement. These guys do not want to get burned again. If they put buys on IDCC now and IDCC loses to Nokia they will look very foolish.
The safe play is to maintain a hold and wait and see what happens. If either a successful Nokia resolution occurs or a major new signing occurs (LG, Motorola) they they have plenty of time to upgrade.
If a tree falls in the forrest and no one is around does it make a sound?
Bottomline, the more analyst that read IDCC headlines the more buying will occur when IDCC proves to be the real deal. These guys do not make a living betting on the Davids(IDCC) to beat the Golaiths (NOKIA). They can make plenty of money once the rock hits the Giants head. So they lose the first 10 points, then make money on the next 50.
Volume, Volume and Volume.
Right now IDCC can not find any buyers. Probably because all the members of ihub are tapped out from all these buying ops we have gotten over the years. LOL.
Our last 2 analysts were very, very conservative Piper and Wells so I doubt whether they have had heavy duty buying from this coverage. If Fagan can take the time clarify the Sharp deal with quaterly number projections we may very well see this group buying. Whatever the number is we need for him to publish a range (is it $1 mil per quarter? $3 mil). That number will help boost the stock price. I'm guessing it should be in excess of $1 million per quarter. Piper puts this as 5 years worth or revenue. Have no idea where they got that number from.
Down slightly on low volume is never really a big concern. It means we are currently on the pay-no-mind list. If we were down on heavy volume I'd be concerned.
First I'd like to say that negative posts are absolutely important for any investor in speculative stocks. Having lost large amounts of money in speculative investments over the years I can not speak loud enough about the dangers of ignoring the negative aspect of any investment. That being said I would hope that board members could refrain from attacking posters who state opinions that they do not what to hear. The best way to address they posts is to understand and debate them.
Compensation issues in this stock do not concern me at this time. My objective here is for high growth so RSU's and options are what will attract key individuals like Zabarsky. My main concern and fear in this stock is a loss to Nokia in arbitration.
What I'd like to see is LG and Motorola signed. If Zabarsky can help with contacts within the company and help convince his old employer that they should pay he is well worth his weight in RSU's.
My point is if I hit my goal of $50+ a share why should I care how much other people have made. Your point holds water in non-volatile, stable companies where share price explosion is not the main objective. If this were a small company whose business model was somewhat finite then dilution would be a major concern.
But it is not. We are looking at a potential market cap growth over the next 12 months in the hundreds of percentages. This stock has the potential to explode like RIMM.
4-Jun-03 18.90 20.95 18.84 20.82 2,207,200 20.82
4-Jun-04 114.00 117.20 113.95 116.15 8,385,800 116.15
A 600% increase Year over Year.
In order to get RIMM numbers we need RIMM revenues.
"Revenue for the fourth quarter of fiscal 2004 was $210.6 million, up 37% from $153.9 million in the previous quarter and up 141% from $87.5 million in the same quarter of last year."
Sharp was a start but we need to get some new handset makers signed.
My line of questioning during and after the ASM was aimed at getting Merritt to blink on when and how IDCC will go after LG and Motorola. My premise being if NEC, our largest customer was selling WCDMA phones to Hutchingson then IDCC IPR in this area should be very strong and allow for a convincing case for both Motorola and LG to sign. I did not get any answers but it was really just a fishing trip anyway.
An LG license between now and Nokia would really get the ball rolling toward the $200 million dollar quarter. The good news is that this number is very feasible if IDCC wins the Nokia arbtration. It appears that as we get further along in 3G it becomes harder and harder for companies to claim that they do not infringe on IDCC's IPR. So as more and more companies roll out WCDMA phones the case for them to pay becomes stronger and the potential for a successful law suit is also stronger.
Bottomline, this is a swing for the fences investment for me. I do beleive I can make anywhere from 2X to 10X my investment. If this happens I won't really care if Zabarsky got 6000 RSU's for sitting on the board. Hell, I'll give him a call and invite him on my new yatch the SS-IDCC. LOL.
Bill stated one of the reasons for this comment was to fire up his team and instill some confidence. I found him a very confident man who is inspiring. I don't thing his comments mattered one way or another. If they did, the company surely would have signed by now. I suggested that he hire a couple of large Bronx boys for his next meeting, forgetaboutit. Make them an offer they can't refuse.LOL.
Looking foward to it.
I also spoke to Howard about coverage and visability. He feels and I agree with his sentiment that IDCC is very much on the Radar screen. That Janet had worked hard to get analysts to follow IDCC and the story is out there.
Now with each license will come buyers. We did not get them today which is very, very strange. I don't know why we had a 3:00 sell off? Maybe somebody did not like what they heard and decided to dump after the ASM?
Anyway todays signing should bode well for revenue adjustments. At $3 Mil per quarter it will raise quarterly estimates to $30-$33 mil instead of $27-$30 mil. I hope Fagan gets right to work on quarterly revenue estimates and publishes a PR ASAP to clarify the SANYO deal. Communication with analysts is the key to keeping recommendations.
Firm Analyst
First Albany Frank Marsala
Hilliard Lyons Tom Carpenter
IRG Research Carter Driscoll
Piper Jaffray T. Michael Walkley
Sidoti & Company, LLC Michael Coady
Stanford Financial Group Scot Robertson
Wells Fargo Securities Casey Ryan
For me this is/was never about compensation or Dilution or Roath or BOD control or outside directors. This is/was always about licensing deals. All the other topics are just not relevant when talking about real moves in this share price as drtl put it today a "RIMM MOVE".
I got the feeling today in speaking with Merritt and was confirmed by the comments in CC's, that acquiring tantivy was like finding a pot of gold filled with IPR. I also got the sense that IDCC IPR is extremely strong and broad and covers many different technologies and affects many different companies. My gut tells me that IDCC will do very well in licensing initiatives this year.
No,
I asked if NEC is upset that LG was competing and not paying. I was attempting to get comments on both the status of LG and the status of Motorola being that they both supply WCDMA phones to Hutchinson in direct competition with NEC.
Merritt was very careful with his answer and avoided the subject of specific companies. He did state that their is an obligation in the NEC license to ensure that royalties will be paid. Basically I took a shot knowing that they would dance very carefully around the questions.
Bob,
Really great meeting you at the ASM. My favorite part was talking to Merritt. He impressed me. This guy has energy and passion. Now I feel bad for hammering him about his declaration of a new license before the end of the year.
I feel more comfortable about the licensing initiatives then I did before, after and during the meeting. I strongly beleive that Merritt has a very good handle on how to approach these companies and on detailing what they should be paying IDCC royalties on.
I also got the feeling that this is the hardest working person at IDCC and rightfully so. His comments about flying all the time all over the world hit home. I do beleive he has the most difficult job in the company, convincing people to pay IDCC royalties.
Although I was frustrated with some answers or non answers specifically when I asked about LG a comment that Howard made stuck out. He stated that when speaking to companies IDCC must sign a non-disclosure agreement. From my limited exposure to these agreements they bind both sides from talking. If they are in negotiations with LG they would certainly be bound to not discuss this.
All in all I feel much better about my investment then yesterday. I strongly feel that the breakout is very, very close.
I absolutely will.
They have an option of keeping quiet and saying "no comment". IDCC also has a history of high fiving each other before the game is done. Bottom line on Wall Street if you proclaim something you better deliver or your stock price will be punished.
Right now we are being punished for the claim that Nokia would take 1 year. Whether they want to admit that or not is another issue like "depends upon what is, is".
IMO, the way the wall street game is played is to set expectations low and surprise to the upside. In this case Howard set the bar. He is the one who stated that the Nokia arbitration would not hinder licensing deals. At least this time they did not pull a bone head move like giving themselves 5 weeks to get it done aka Merritt.
If that is the case they should have never stated this
"Further, we expect to expand our licensee base throughout the remainder of 2004."
To claim that they expect to sign deals in 2004 and not is basically failing. They could have left expectations low by just not commenting on the state of new licensees. They set the bar now they MUST hit it.
IMO, the hardest aspect of any business is bringing real revenues in the door. Some of the highest compensated individuals are sales people because of this fact. While I do beleive the company has the goods, I feel they are weak in their ability to close deals.
Take for instance Bill Gates. He never had the best technologhy but he was always the best deal maker. This company lacks a closer. Call it a salesman, business development person, deal maker, negotiator. Good salemen are trained to smell a deal and not blink until it is signed. Going to court for each major deal tells me that these guys are having a very hard time convincing companies that they are needed, that is where selling comes in. It should not be about paying because they have to, it should be about paying because IDCC gives you technology to make your products and company better. This is the message that I do not think they have down yet.
Yes, they have made their terms clear for non-cell phone manufactures.
I also feel that IDCC lacks a strong business development person someone who can get creative with companies and start forming partnerships and joint ventures. An experianced sales person who finds a way to get a deal done. Watching their business plan execute is like watching paint dry.
Carpenter stated last year that it is harder to collect royalties after the fact then before. I agree with this sentiment. When Nokia gets done I beleive IDCC will have to forgive substantial amounts of 2002, 2003 and 2004 revenues in order to put this behind them. Same with Samsung. Waiting for the very best deal can be counter productive.
So while I am happy they got Sierra Wireless done this year I'm not happy about the progress of the licensing initative under Merrit to this point in 2004. And while I respect the legal profession I feel sometimes it is better to bring in lawyers after the hand shakes. I'd much rather see salesmen and business development people close and lawyers fill in the blanks to take some words from Howard.
I think the line is drawn between analysts who beleive deals will come and analysts who are doubting deals will come until a Nokia resolution takes place. News today, tommorrow or the day after does not matter in the long run.
Last 2 analysts who came on board from Piper and Wells fargo were very conservative. Walkley basically doubted any major deals would ge done until Nokia is resolved. I beleive unless coverage is an outright sell any coverage is good coverage. The fact that the number of firms covering IDCC keeps growing is a major plus, more firms, more eyeballs.
This does not excuse Howard and Uncle Billy from getting things done. The "economic discussions" will have a time frame. These analysts do not want to waste their time with empty promises. I'd hate to see dropped coverage because of no activity. These guys have been burned twice by IDCC so if they get burned again it is goodbye IDCC.
It is very frustrating day in and day out following this company and seeing no business progress. One license this year with Sierra Wireless is not cutting it. I do not want to see them cave but I wish they would be more creative and get some small things done (Novatel?).
McCaw launches wireless broadband service
Wireless entrepreneur Craig McCaw is launching a wireless broadband service in the United States to compete with the high-speed Internet access offered by cable operators and telephone companies, the Wall Street Journal reported today. His company, called Clearwire, will offer a national service that targets not only rural markets, but also large markets where other wired alternatives are available. The rollout is targeting 20 markets over the next year, starting in Jacksonville, Florida this summer.
Initially, Clearwire's service will be marketed to compete directly against Internet access via cable modems and digital subscriber lines (DSL). Customers with portable computers will be able to travel to other parts of the U.S. and have Internet access wherever Clearwire is available. McCaw has also acquired spectrum in non-U.S. markets. Clearwire's service would offer speeds in a range of 1.5 to 2 megabytes per second, slightly faster than DSL modems, and significantly faster than wireless services being contemplated by cellular carriers like Verizon Wireless and Sprint PCS.
Jeffrey,
Do you have an opinion as to why IDCC chose to only include Tantivy IPR in a law suit with LU?
At what point can or can't IDCC add claims to its law suit with LU?
On the CDMA2000 implementations in the US. Is IDCC IPR stronger in other areas eg. WCDMA?
Cingular Wireless Selects Lucent Technologies for 3G UMTS Trial Network in Atlanta
Is this the first 3G UTMS network in the US?
My point being that IDCC's IPR in this implementation may be stronger than their IPR in CDMA2000 where QCOM rules.
Could IDCC strategy have been that they knew LU wanted to implement a 3G UTMS network in the US and got a jump on the patenet infringement by starting the suit off with Tantivy patents then going after them when they started to sell UTMS products.
Would you not want to initiate your first law suit in 11 years where it would be a slam dunk?
If IDCC can prove no grey area exists in this type of network when dealing with IDCC's IPR then the LU suit can be the "water shed" event for 3G licenses. LOL.
Questions for Attorneys.
Interesting point brought up by Teecee the other day on law suits about IDCC not suing 3G infringers because it wants 3G fought in US courts. I'm not sure if I'm correct or not but I'll make some assumptions as to why only LU is being suied.
To date I do not think that there are any 3G systems in place in the US. So if LG for instance is not selling 3G products in the US, IDCC can't sue them here? (not sure if this is correct).
LU has not sold 3G products in the US yet, so the law suit does not contain any 3G patent infrigement claims.
Cingular has now contracted LU to deliver a UTMS network for the Atlanta area. Once LU starts to deliver 3G products for this system, IDCC may be able to add 3G claims to the law suit if the law suit has not proceeded too far.
Are these assumptions right?
I never thought $17 would look SO GOOD! LOL
Looks like we have got legs today.
Thanks again sjratty,
Hope you keep posting here. You were the only one who correctly called the arbitration length. Many people here get crazed about negative views. Probably because everyone is busy rooting for their investment to go up and they do not want to listen to both good and bad news.
Having a suit started March 1st, hopefully this can get on track by the time LU is ready to start building the UTMS network.
InterDigital's Subsidiary Files Suit Against Lucent Technologies, Inc., Alleging Patent Infringement
Monday March 1, 1:53 pm ET
If they add new 3G claims and WIN this will do wonders for future licenses.
Question for Attorneys?
Can IDCC easily add claims to its current law suit with Lucent?
With LU and Cingular in a UTMS deal can IDCC now add 3G patents to their existing suit because LU is now implementing IDCC technology on US soil or will they have to start a new law suit?
Thanks in advance.
sjratty,
Merrill never had IDCC as a buy. They had a trading program that started to buy IDCC back at $18 last year. In March IDCC was removed from the program. No Merrill analyst has covered IDCC.
Also just because Level II says Merril is selling it doesn't neccessarily mean their funds are selling, it could be a client.
Even if Merrill is selling in the funds the positions that they hold are not substantial.
MERRILL LYNCH ASSET ... 3/31/2004 87,996
MERRILL LYNCH & CO I... 3/31/2004 11,300 5,600 98.25% $185
As far as selling don't read into the day to day stuff.
The big numbers are in institutional buying and selling. We have had about an increase this reporting period, which is very positive.
Company Details
Total Shares Out Standing (millions): 56
Market Capitalization ($ millions): $911
Institutional Ownership: 35.1%
Price (as of 5/25/2004) 16.41
Ownership Analysis # Of Holders Shares
Total Shares Held: 126 19,513,809
New Positions: 22 4,077,622
Increased Positions: 54 6,062,627
Decreased Positions: 57 5,341,539
Holders With Activity: 111 11,404,166
Sold Out Positions: 26 2,680,316
Interesting positions held by both Wells Fargo and Piper Jaffray.
WELLS FARGO & CO/MN 3/31/2004 400 0 0.00% $7
PIPER JAFFRAY COMPAN... 3/31/2004 100 0 0.00% $2
Nokia.
They have always been the key to the industry. And IMO, the watershed event will be a settlement prior to arbitration for 2G+3G with Nokia where both parties can claim victory.
teecee, you've been around long enough to know that a hold is much, much better than non-coverage. This means that IDCC has a whole other set of eyes watching for good news. Unless it is an outright sell and this isn't then this is very positive for the future. More eyes mean more potential BUYERS.
I think it is always important when you invest in a company to be open minded about the down side. All equities have a certain price for a reason. The last two reports gives me an understanding of why we are priced at $16+.
When IDCC crashed to this level I increased my position hoping for a "dead cat bounce". Problem is the cat kept falling. When a stock remains in a trading range for a period of time their usually is a reason.
I would not still have all my shares(the most I've ever owned and by far my largest position) if I did not beleive in IDCC long term. But I've found out from past experiance that one of the most dangerous things an investor can have is blind faith. I want to hear and understand the bad sentiment as well as the good. It helps me make the best decision I possibly can.
Got me there. I had light fixtures on my mind because my wife has been dragging me to long island every weekend to look at lights. Really fun, LOL.
My point being is I would very much like IDCC to hire a real sales person. Someone who knows how to close deals. It appears that this team lacks that key skillset in the inner circle. I've been wanting a business development type or dynamic sales person type for years.
I thought the presentation was very good. I did not mind the 12-18 comment on licensing. It was not specific and another general type of answer from Howard. Nothing, IMO to read into this.
I think they have come to the conclusion based on the events that have unfolded in the past 6 months and comments from management about how they are accepting licenses.
IDCC has stated that they will not sign 3G licenses without companies settling past due infridgements. So since Ericsson, they have signed RIMM, HTC and Sierra Wireless. None of these companies had any significant 2G issues.
So they look at the list and see who could possibly sign.
Nokia is in arbitration over 2G so very unlikely they will sign a 3G before then.
Samsung same as Nokia.
LG probably does not want to sign until they see what their main Korean competitor Samsung will do.
Motorola won on 2G so it is anyones guess to how they can get Motorola signed.
Siemens has IDCC on the pay no mind list.
Ericsson just forked up big money for 2G and probably will wait to see if Nokia pays before they pay even more for 3G.
So any good analyst will look at the situation and make the determination whether any of the big guys will sign before they know if Nokia will pay,
"Strategy Analytics added that Nokia continued to lead handset manufacturers with its 34.8 percent share of the market, down less than half a percentage point from 2002. Motorola, in second place, saw a bigger loss of market share, dropping from 16.3 percent in 2002 to 14.5 percent in 2003. Third-place Samsung, fourth-place Siemens and fifth-place LG Electronics each registered single percentage point gains, according to the findings. "
I beleive this team is doing on the job training.
Howards comments have come back to haunt us more than once. I won't continue to bring up the past because I beleive lately he has improved by about 1000%. But declaring a Nokia victory last year was like hitting a home run in the 5th inning to take a 6 to 5 lead with 4 innings left to play.
At this point it doesn't matter what we think, the small shareholders. It is what the analysts and institutions are thinking. They control the stock price. Our buys and sells are small bips on the screen. Their blocks control the current and future direction.
The fact is that the sentiment is leaning toward the Nokia arbitration to being a road block so I called it a DAMM. Howard had stated it is not. He must prove them wrong by signing a major license (LG?).
Sounds like Walkleys sentiment yesterday.
We believe that at current levels, InterDigital is fully valued, and investors who are paying current share prices are assuming a successful conclusion to the company's pending litigation. Given the uncertainty, we are initiating coverage of InterDigital shares with a Hold rating. In our view, current share prices are too high for us to recommend purchase without knowing how the arbitrations with Nokia and Samsung will conclude.
What I do not like and never have is that IDCC management lacks a deal closer.
How is it that Uncle Billy gets this job coming from a company that sells lighting fixtures?
William J. Merritt is an EVP and director of ITC, InterDigital's IP subsidiary. Prior to joining the company in 1996, he served as assistant general counsel with the Long Island Lighting Company in Hicksville, New
York.
Fact is IDCC signed 1 license in 2004 and the year is nearly half over.
Time for IDCC to show us the licenses from these economic discussions and show the analysts that they are incorrect with their valuation numbers.