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Try to get the story right. He did not downgrade but initiated coverage for a new firm. He did not add 6 months but gave a conservative estimate of when he feels the arbitration will be resolved.
If you think he is incorrect call Janet Point at IDCC and ask a very specific question.
Will the Nokia arbitration be complete Q105?
What do you think the answer will be?
My adgenda here is to make money on this stock. I want to know why we are trading at $16+ and not $20. I've found out some reasons today, some analysts do not beleive any major event will happen here until Nokia which they are projecting to be 2Q05. The report today made me understand better why we are at $16.00 and not $20.00.
No he did not and we were not told January 05. We were told that the hearing is scheduled for that date. We do not know when arbitration will be finished and a decision will be made. It is hoped that it will be 30 to 60 days after the January hearing date. He assumes 2Q05. That is a resonable assumption.
Q105 ends March 31st 2005. If the hearing is mid or late January adding 2 months will give you late March. Why would he not leave room for error. If the panel needs 90 days or the hearing is rescheduled.
He is covering the stock for Piper Jaffray a company he just went to. He is giving an honest conservative opinion for his clients that he feels IDCC will perform with the market in the near future. If these "economic discussions" provide new licenses with substantial revenue he will upgrade the stock to a buy and raise the price target. That is fair. Time for the company to step up and produce.
Don't shoot the messenger just because you don't like the message. The Walkley sentiment perfectly explains why IDCC beat earnings by a large amount and has traded down. He is doing his job in properly relaying the situation as he sees it, as an objective analyst.
It is now 14 months since the so called watershed event that would lead to many new 3G licenses. It is now 10 months from the about 1 year Nokia arbitration that IDCC would have a resolution. This company and its stock is now in the show me mode. Analysts no longer want to hear about economic disccussions. They want to see ink on contracts. That is probably why their were no questions on the CC.
Analysts will wait until IDCC proves they can deliver licenses like they keep saying. Walkley beleives the Ericsson watershed event is really the Nokia/Samsung damm preventing any major agreements until it is resolved. Is he wrong?
Unless we start getting licenses with meaningful revenue behind them he is right. IDCC has NEC, SHARP and ERICSON producing most of its revenues. Walkley does not see this changing until after the Nokia resolution. He also questions whether Nokia will be resolved in 2005. Nokia has succeeded in delaying the process just like they set out to do. Can they delay again? Walkley is of the opinion they they can.
After Hours Trade Reporting Tuesday May 25
After Hours
Last: N/A After Hours
Best Bid: $15.77 After Hours
High: N/A
After Hours
Volume: N/A After Hours
Best Ask: $16.42 After Hours
Low: N/A
No after hours trades have been reported for this security
No reference to specific dollars amounts related to Nokia or Samsung in the 10K.
Nokia
In July 2003 Nokia requested binding arbitration regarding Nokia’s royalty payment obligations for its worldwide sales of 2G GSM/TDMA and 2.5G GSM/GPRS/EDGE/TDMA products under the existing patent license agreement with ITC. Pursuant to the dispute resolution provisions of the patent license agreement, the arbitration has been filed in the International Court of Arbitration of the International Chamber of Commerce (ICC).
The binding arbitration relates to ITC’s claim that the patent license agreements ITC signed with Ericsson and Sony Ericsson in March 2003 defined the financial terms under which Nokia would be required to pay royalties on its worldwide sales of 2G GSM/TDMA and 2.5G GSM/GPRS/EDGE/TDMA products commencing January 1, 2002. Nokia is seeking a determination that their obligation under our existing patent license agreement is not defined by our license agreements with Ericsson and Sony Ericsson or has been discharged. Alternatively, Nokia is seeking access to various documents related to previous litigations, negotiations, and arbitrations with other parties. Nokia also is seeking a ruling that no royalty rate for its sales after January 1, 2002 can be determined by the panel until certain contractual conditions precedent have been satisfied. Nokia has additionally claimed that, in any event, the panel cannot award money damages.
ITC filed an Answer to Nokia’s Request for Arbitration arguing that the patent license agreements signed with Ericsson and Sony Ericsson in March 2003 defined the financial terms under which Nokia would be required to pay royalties on its worldwide sales of 2G GSM/TDMA and 2.5G GSM/GPRS/EDGE/TDMA products commencing January 1, 2002, that Nokia’s duty to pay these royalties has not been discharged, and that the documents sought by Nokia are not relevant to the royalty determination. ITC also counterclaimed for an arbitration decision requiring that Nokia pay us royalties on equivalent terms and conditions as those set forth in the Ericsson and Sony Ericsson patent license agreements for the period January 1, 2002 to December 31, 2006, and determining the amount of the royalty and payment terms. During fourth quarter 2003, Nokia filed a Reply contesting our claims and including additional claims and defenses relating to the enforceability, validity, and infringement of certain of ITC’s patents. Subsequently Nokia withdrew from the arbitration its claims pertaining to invalidity and non-infringement of those same ITC patents but maintains that the validity and infringement of those patents is a factor the arbitration panel should consider in the arbitration. We do not believe that the issues of patent validity or infringement are relevant to the arbitrable royalty dispute and intend to vigorously contest Nokia’s position. The arbitration panel has informed the parties that January 2005 is the month during which the panel will conduct the arbitration evidentiary hearing, and absent a resolution of this matter or unexpected changes in the arbitration schedule approved by the arbitration panel, we expect a decision to be rendered thereafter.
Separately, Nokia has filed a motion to intervene in the now-settled Ericsson litigation in the United States District Court for the Northern District of Texas and to gain access to documents previously sealed by the Court in the settled litigation. We filed a response opposing the request to intervene and opposing the request for access to the documents. While the Court granted Nokia’s motion to intervene in the Ericsson litigation, the Court has deferred a ruling on Nokia’s request to gain access to sealed documents pending a determination by the arbitration panel in the Nokia arbitration proceeding as to whether any sealed document is relevant to such arbitration proceeding. Nokia subsequently filed a motion to reinstate certain decisions that were vacated in the now-settled Ericsson litigation. We have opposed Nokia’s motion to reinstate the decisions and a court decision is pending.
Table of Contents
Samsung
In 2002, during an arbitration proceeding, Samsung Electronics Co., Ltd. (Samsung) elected under its 1996 patent license agreement with ITC (1996 Samsung License Agreement) to have Samsung’s royalty obligations commencing January 1, 2002 for 2G GSM/TDMA and 2.5G GSM/GPRS/EDGE/TDMA wireless communications products to be determined in accordance with the terms of the Nokia patent license agreement, including its MFL provision. By notice in March 2003, ITC notified Samsung that such Samsung obligations had been defined by the relevant licensing terms of ITC’s license agreements with Ericsson and Sony Ericsson as a result of the MFL provision in the Nokia license agreement. In November 2003 Samsung initiated a binding arbitration against InterDigital Communications Corporation (InterDigital) and ITC (collectively with InterDigital, the Company). The arbitration has been filed with the ICC. Samsung is seeking to have an ICC arbitration panel determine that Samsung’s obligations under the 1996 Samsung License Agreement are not defined by our license agreements with Ericsson and Sony Ericsson or, in the alternative, to determine the amount of the appropriate royalty due. Samsung also has requested a consolidation of its arbitration matter with the pending ICC arbitration involving Nokia Corporation and the Company and for the arbitration panel to make a determination that Samsung is entitled to seek access to documents previously sealed by the Federal Court related to the now-settled Ericsson litigation. The Company has responded to and contested Samsung’s claims and any request for access to the sealed documents. The Company believes that consolidation of the arbitration proceedings is not permitted without the consent of the parties. ITC also has counterclaimed for an arbitration decision requiring that Samsung pay us royalties on equivalent terms and conditions as those set forth in the Ericsson and Sony Ericsson patent license agreements for the period January 1, 2002 to December 31, 2006, and determining the amount of the royalty and payment terms. We also seek a declaration that the parties’ rights and obligations are governed by the 1996 Samsung License Agreement, and that the Nokia patent license agreement dictates only Samsung’s royalty obligations and most favored rights for those products licensed under the 1996 Samsung License Agreement. Samsung has replied to ITC’s answer and counterclaim, maintaining Samsung’s position (as set forth in its arbitration demand) and arguing that it has succeeded to all of Nokia’s license rights. In the alternative, Samsung asserts that its royalty obligations should be governed by the MFL clause in the 1996 Samsung License Agreement. We expect an arbitration panel will be selected in the near future.
Before the Ericsson settlement their were articles stating that Ericsson exposure could be upwards of $1 billion dollars. We have heard of the $100 million dollar offer whether fact or fiction. Most investors thought that IDCC got a low ball settlement when Ericsson was done. It turns out that the Ericsson settlement is key to IDCC's survival and progress.
Now a year and 3 months later and we are in a dog fight with Nokia and have not had any major cell phone manufacturers come to the table. Can a Nokia settlement help IDCC bring all the other manufacturers into fold?
My question is that because IDCC management has stopped using specific numbers when refering to Nokia could this be a sign that they are negotiating off these numbers?
Just suppose they are. That would explain the removal of Nokia and Samsung past due revenues from the annual report. It would also explain the changing of the investors presentation to remove Nokia/Samsung numbers.
If IDCC settles and gives a $200 million dollar credit, I feel it would be a very smart move.
$200 million cash would equate to less than $4.00 a share.
($200 million / 55 million shares = $3.63 a share).
If IDCC was able to keep the revenue stream going foward at the rate they received from Ericsson we are talking $20 million a quarter or $80 million a year. IDCC currently sell for about 7 times yearly revenues. 7 times 80 million
= $560 million.
At a minumin a settlement with $0 dollars past due from just Nokia would be at least $10+ a share in price increase.
Now we've got SAMSUNG, LG, NT, SIEMENS, MOTOROLA, LUCENT, PANASONIC, PALMONE, NOVATEL, etc,, etc. Plus 3G growth, IFX.
Finally is it worth $150 to $200 million of one time money to get the company moving now without the risk of a bad arbitration decision.
If the company decides that it is, I'm all for it.
IMO, Nokia's biggest fear is IDCC becoming another QCOM. Then they have 2 hemiroids to deal with instead of just one. Whether or not they would have signed last year is not relivent now. How do you get them to sign now?
I'm of the opinion it is in everyones best interest to get Nokia to the bargaining table. Get creative and give them something. The past due revenues are nice but recuring are much nicer. Divide and conqur. Make Nokia be a trigger for Samsung. Give them 2002 for free and refund the $59 million in engineering money.
With quite possibly $300 million dollars in past due revenue payments by next January Nokia can be enticed to deal. Without making it worth their while they will just keep fighting and dragging and hope they get lucky with the arbitrators.
So if the arbitration date is 7 months away why should IDCC deal? Why not. Their is no guarentee that IDCC wins in arbitration and also we do not know for a fact that this can't be dragged out further by some legal manuvering.
My initial theory from yesterdays presenation, the last CC and the annual report was that management decided to down play Nokia numbers so they sound more like a current success to analysts and the investment community. Now I'm leaning towrd settlement talks and big concessions in back payments. I'm hoping that this is true.
Finally the old saying a bird in hand comes to mind. I've been in this stock long enough to have all my profits fly away twice. If their is a chance to put Nokia to bed, draw a nice foward recurring revenue stream then move on the rest of the infringers I say do it.
What are they suppost to say, we can't get LG until SAMSUNG settles but here is Novatel?
I don't doubt they are in economic discussions with both Palmone and Novatel. We have had 3 licenses in the past year none of them had big 2g infridgement revenues due. Of course they have to say Nokia arb is not an inhibitor and I'm sure the companies that are negotiating like LG are not telling IDCC that we won't sign until we see what Nokia and Samsung pay.
I don't care who claims to win or lose, I do care about the stock price. My feeling is this sudden change to deemphasize Nokia and Samsung numbers is a positive that could be prelude to a settlement.
We all screamed about the Ericsson settlement being too low but can you imagine the stock price if we did not settle? Probably $10 a share if that.
I'm hoping Howard and Company realize that the best route here is to settle and move on. The watershed event became a Dam blocking progress on all major licenses.
But Nokia accrued $100 million dollars a year for patent liabilities. Why would they do this if they did not feel they had to eventually pay? The proof is in the pudding, we do not have a deal and it is my opinion that by Howard and company making Nokia numbers high profile did not help in negotiations.
Nokia is the 62 billion dollar Gorilla in the field.
Market Cap: 62.71B
IDCC is the 900 million dollar monkey.
Market Cap: 901.11M
This isn't about treatment it is about dollars, period. Nokia has them, IDCC needs them. No need to make grand statements about games, just deals. Maybe it would not have made a difference but it did nothing for IDCC and its shareholders for Howard and Company to proclaim victory 2 years before the battle would be fought. Kind of reminds me of George Bush on the air craft carrier declaring Mission Accomplished.
would leave them open to class action law suits claiming fraud and misrepresentation.
Class action law suits would only occur if the price went down. Do you think adding $25 million dollars of pure profit to the revenue stream would cause this stock to go down from $16.00? A Nokia settlement will cause at minimum a $5 to $10 immediate upward stock price move.
Investing is all about the future and not the past. IMO, it would best suit shareholders and the company to get this done now. Think how many battle are needed to be won by IDCC until they get paid for all the technology.
Nokia arbitration;
Samsung Arbitration;
Lucent law suit;
Panosonic patents;
LG license;
Motorola license;
Siemens License;
Nortel License;
Palmone license;
Novatel license;
I'm sure I left out people. The point being is why make everything a battle. Get creative now. Apply the $59 million Nokia paid as a credit towards past due licensing fees.
If IDCC settles Nokia I'm sure we will not have many unhappy shareholders.
then I would say that IDCC managment was incompetent during their past negotiations with Nokia and seriously overplayed their hand. I believe that a settlement of that reduced magnitude could probably have been negotiated with Nokia prior to their request for arbitration.
I think the word incompetent is rather strong. My opinion is that they were inexperianced. This team has no deal makers and too many lawyers. They needed to make settlements not statements. They should have settled this prior to last July.
Basically they made a lot of mistakes but they are taking the steps to fix them. I stated last year that they should take 25 cents on the dollar and move on. Past cash settlement have little affect on stock prices where as recurring revenue streams carry huge stock price premiums.
Lastly, the past is the past and what I really care about is the future and the ability for the stock price to rise from here. If they settled right now for 25 cents on the dollar with foward percentage in place set at ERICSSON's rate the stock price would double and we would never see under $30 again. It makes sense and dollars to put this behind them and if it costs past royalties so be it. This will finally be a WIN for the shareholders.
I don't think so. It was a very poor strategy to openly taunt Hundreds of millions of dollars in Nokia's face. My first thought when I read the press release was that they must finally have gotten it done otherwise why would they publish numbers. Then when I read the 2002 annual report witt Nokia and Samsung numbers spread all over I went out and bought more thinking this was a slam dunk.
The fact of the matter is this strategy failed. It did no one any good to openly proclaim specific numbers that Nokia owed. Not IDCC and certainly not its shareholders.
What I think that is happening now is negotiations are heating up between IDCC and Nokia on a settlement which includes 3G. By backing off the published numbers it accomplishes 2 things. First it allows Nokia to negotiate without having IDCC position "etched in stone". Second it will allow IDCC management to save a little face when the Hundreds of millions that they claim Nokia owes them is slashed by about 75%.
Good contracts end up win win. If IDCC and Nokia can settle this thing by substantially reducing past due royalties then Nokia can claim victory by saving the company a couple of hundred million dollars and IDCC can claim victory by doubling their recurring revenue stream, thereby doubling their stock price and truely accomplish a watershed event by bringing LG, MOTOROLA, NT and SIEMANS to the table.
New presentation, much better than Jan. presentation.
Am I the only one who notices IDCC trying to distance themselves from the "Nokia owes $$$$" comments and presentations of the past. IMO, The difference between a BIG mistake and a little mistake is not trying to correct the mistake.
Howard and CO made a BIG mistake by declaring victory and then rubbing numbers publicly in both SAMSUNG and NOKIA's face. This event back fired twice, once being a 10 point haircut last July and the second 10 point haircut occurred in May.
Now they are turning this BIG mistake into a little one by deemphasizing NOKIA/SAM. They removed any reference to numbers and also removed Nokia and Samsung completely from the presentation. Very good and positive move as far as I'm concerned. Howard still gave very brief and scripted response to Nokia and Sam questions which is fine.
They needed to change the story from a wish stock into a have to hold now stock. This new presentation is about 2G, 3G and standards. They have a story now that investors can identify with without having to wait on some event (NOKIA).
IMO, this is a very big step in a very new direction for this company. They no longer have to talk in potential terms(Nokia?Samsung). They can talk about current accomplishments(NEC/SHARP/RIMM/ERIC/HTC) and strengths(800 standards accepted). I'm betting this new strategy attracts more institutions and investors.
How about an amateur one?
IDCC average volume per day is
Avg Vol (3m): 953,090
The 10 day sell off from post earnings numbers of $17.74 to a daily low of $15.00 happened with only one day of above average volume.
18-May-04 15.65 16.17 15.56 16.02 526,200 16.02
17-May-04 15.89 15.92 15.00 15.65 643,700 15.65
14-May-04 16.60 16.70 15.92 15.99 408,600 15.99
13-May-04 16.38 16.75 16.20 16.59 1,126,400 16.59
12-May-04 16.75 16.78 15.95 16.36 728,200 16.36
11-May-04 16.35 16.93 16.34 16.69 859,200 16.69
10-May-04 17.38 17.40 15.92 16.26 909,000 16.26
7-May-04 17.00 17.41 17.00 17.03 706,100 17.03
6-May-04 17.52 17.67 17.00 17.06 568,200 17.06
5-May-04 17.50 17.74 17.39 17.41 771,000 17.41
NASDAQ sell off from high of 1967 to low of 1865
18-May-04 1,892.29 1,903.39 1,890.95 1,897.82 14,351,000 1,897
17-May-04 1,881.06 1,887.74 1,865.40 1,876.64 15,288,900 1,876
14-May-04 1,922.47 1,927.25 1,897.57 1,904.25 15,263,600 1,904
13-May-04 1,918.63 1,937.87 1,914.10 1,926.03 15,586,200 1,926
12-May-04 1,924.32 1,927.23 1,878.77 1,925.59 18,877,800 1,925
11-May-04 1,909.50 1,931.48 1,909.50 1,931.35 16,452,200 1,931
10-May-04 1,904.73 1,907.98 1,880.32 1,896.07 18,956,300 1,896
7-May-04 1,931.86 1,957.24 1,917.96 1,917.96 16,370,900 1,917
6-May-04 1,945.87 1,949.55 1,923.30 1,937.74 17,507,700 1,937
5-May-04 1,954.99 1,967.33 1,948.51 1,957.26 15,866,600 1,957
There was no fundamental reason for IDCC's selloff in fact the fundamentals improved. So IDCC should have gone up in a decent market but because the sky was falling specifically in high beta stocks IDCC was sold off with the rest of the NASDAQ.
Now we have a rubber band effect of prices returning to a stable point.
I don't know what everyones expectations are but I know what mine are. A solid cohesive revenue and profit forcast without Nokia and Samsung numbers.
The biggest positive I took out of last Mondays conference call was the revenue projections and the down play of the Nokia/Samsung numbers. In fact all dollar references to Nokia/Sam have been removed from this years (2003) annual report. They were dominant in last years (2002) report.
The January presentation was also heavily focused on Nokia numbers. With two major selloffs tied to the Nokia arbitration I beleive that what IDCC is moving in a correct direction by down playing Nokia and focusing on the current and future business events.
So my expectation of today's presentation is a greater focus on 3G highlighting the success of NEC and SHARP. Also the growing repetitive royalty stream with Ericsson, RIMM and HTC.
New avenues and products that will generate future revenues. On going discussions with potential licencees. Lastly the ability to grow year over year profits and revenues this year leading into the resolution of Nokia next year.
Nice neat pretty picture. Just what wall street wants.
IDCC mentioned in a CBS Marketwatch report on technical trading.
"Profiled Wednesday, InterDigital Communications remains vulnerable to further downside.
Note that Monday's close at $15.65 matched closely with the target support point originally designated at $15.67. Also note the arrows above illustrate when and where it has observed its major moving averages.
It will take a break above its 50-day moving average, currently at $17.55, to improve the near- to intermediate-term outlook. "
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&gui...
I sent a complaint about the RSU compensation to directors@interdigital.com
Probably ignored because it was viewed as a complaint and not a question.
Dear Sirs,
As a long term shareholder in this company I am very concerned about the latest realignment of compensation structure. The $7 million dollar 2004 expenditure for this plan will hurt the share price and has already caused analysts to reduce 2004 earnings forecast. I do not feel that this is the appropriate time to spend 7% of 2004 revenues on a compensation plan while shareholders have lost 10% of the value of their shares this year.
I am not against compensation plans in the future and hope that this plan will be reconsidered until either after the Nokia arbitration issue is resolved or another major revenue deal is completed.
I've also sent an email with no reply. Seems like the email the directors function is like putting a lid with a slit on a garbage pail and calling it a suggestion box.
Vert hard to justify price action. Simply put sellers are willing to sell here. No one sees any near term catalyst for the stock price so their is no reason to hold where NASDAQ is red. Only solution would be a buyback but that would be like putting a band aid on a severed limb.
If we ever needed a substantial license we need it now. Only companies getting support are ones with nice revenue flow aka RIMM. Holding this stock isn't like watching paint dry more like watching a tornado destroy your portfolio.
What a way to start a week.
Can't help but adding my .02 cents to this point.
Just let them do there job's and Y'all do yours. That being To Hold or Not Hold/ To Sell or Not Sell.
IDCC is a public company. They chose to be a public company by filing with the SEC and then selling shares of the company to investors.
Every single investor is an OWNER of IDCC. Some investors own more shares then others and that gives them more shares to vote. The CEO, COO, CFO and others are employees that work for the owners or shareholders. The Board of Directors are the people the owners or shareholders pick to ensure the company is run right.
As an OWNER Corp is entitled to vote his shares and attempt to convince other people to vote the way he does. So his job is very much about evaluating the performance of the Board and making decisions about whether they should be on HIS BOARD.
Ronnie,
Some great questions that we can only guess the answers to. IMO, IDCC has been too passive in dealing with IPR infringers. QCOM doesn't ask Nokia, LU, MOT, SAMSUNG to pay, THEY DEMAND IT. It is almost like nice guys finish last in this business and IDCC should go out and hire some mean and nasty executives. If there was any time in this companies history to take the gloves off NOW IS THE TIME..
QCOM went for the jugular right away and kicked Nokia butt in court. Now everyone fears them so they pay. IDCC pussyfooted around with ERICSSON for 10 years and then let Nokia play the phase II shell game for the last 3.
It is time for IDCC to put a contract in front of LG with NEC numbers for 3G and ERICSSON numbers for 2G and DEMAND THEM TO SIGN. They say wait I say 7 days. They say they need more time I say OK another 7 days. They come back for more time YOU HIT THEM WITH A LAW SUIT.
END OF ECONOMIC DISCCUSSIONS.
OT: Alley?
I've recently been laerning technical analyis. I've taken a couse in Manhattan taught by a Cornelius Luca, who wrote an execellent book on the subject. I'm currently reading John Murphy's book. Is stockcharts.com the best TA web site? If not can you recommend others. Also is stockcharts worth the money? Any input or direction would be appreciated. I'm deternined to learn as much as I can on the subject.
Thanks
jai
"An LG Elec. license would do it!"
How about an LG law suit?
With the Ericsson signing and the NEC deal all the framework for licensing is in place. The only thing these companies understand is law suits and penalties. LG has no valid reason not to sign. They are now supplying Hutchingson and are clearly infridging on IDCC's IPR. They also have no excuse not to use Ericsson's numbers for 2G sales and NEC/SHARP numbers for 3G sales. So why won't they sign?
Because they don't have to. What we have seen during the Nokia saga is a company continue to delay, delay and delay any mention of the words license fees. I do not beleive Nokia entered into their agreement in good faith and I do not trust any company until the ink is dry on the contracts. Nokia was betting on Ericsson to win, now why should we sit around and wait for LG to bet on Nokia to win.
With the stock price falling it is time to take some action. I know law suits are very long and very expensive but it seems like in the world of wireless IPR licensing they are always inevitable. So why wait 9 months while LG drags their heels hoping Nokia wins. We got cash and Fullbright so I'd go after them now.
HATFIELDS vs McCOYS
I think the real issue here is trying to participate in a civilized democratic stock forem. Whether we agree or disagree shareholders pay for the right to exercise their opinion.
We all know Ronnie is a long term dedicated shareholder. He has paid for his right with cash to express his opinion and vote the way he feels. He is not a short seller, basher or gang banger. He is a concerned shareholder who wishes to exercise his right as a shareholder both with his vote and his voice.
It can't be said enough that in order to keep this forem as the greatest stock board on the internet we need to debate the content of messages and not attack posters for what may or may not be some perceived motive. This company probably has one of the most educated shareholder bases of any stock any where. We know by heart the history and we all can speak for hours upon hours of the potential of this investment. I know I personally have many dear friends and family who have invested here because of my passion.
Bottomline, the board is becoming too abrasive and intolerant of opposing views. Insulting and labeling other posters go against the very fiber of this great forem that JimLur has created over the years.
Ronnie,
I really appreciate all the work you put in in doing analysis on IDCC. I've learned a lot over the years just by reading your posts.
In light of the recent developments by the company I can not vote with you on ousting Mr. Roath.
Over the last year I have been very vocal on mistakes the company has made. Outside directors, poor communication and guidance, insider selling, compensation, failure to sign significant contracts, etc. etc. At this point in time I feel the company has responded in a positive way to all my complaints. I've never felt more confident in this company than I do now, after this quarters CC.
It isn't just the numbers. It is the ability to produce a growing revenue stream with projected cash flows and earning in 2004. IMO, this company has done an about face. The arrogance is gone. Maybe the last 10 point haircut had a humbling affect but they have gone from reactive to proactive.
The icing on the cake for me was increased institutional buying that we just recently found out about.
To gripe about compensation now while I find that the company is performing above my expectations would be petty. I beleive compensation must be earned and I feel based on the recent performance, IDCC management has earned it.
So as far as Mr. Roath goes, IDCC is recommending him as a board member. They have not given me a reason lately to go against the companies wishes and vote out Mr. Roath. I will therefore be submiting my proxy to re-elect him.
Just finished reading the 2003 annual report. Quite a different report from last year. Don't want to get too historical but after the Ericsson settlement IDCC figured it had Nokia dead. They published what Nokia and Samsung owed in the 2002 annual report. I think they underestimated Nokia's resolve in not wanting to pay.
This years read removes any reference to Nokia or Samsung money. New Year, New Page. The story has changed for the better. The focus is on growth in client base and current revenue stream instead of watershed events. Wall Street was burned twice by the Nokia story. First in July of last year and most recently March. Both caused eventual 10+ point haricuts or 40% of the market cap. It was time to give the "Nokia is comming" cries a rest. I'm extremely happy that IDCC has decided to downplay Nokia and focus on current and future licenses. Something that they can control and project.
I think they finally understand how the game is played. Extremely positive development with MASSACHUSETTS FINANCIAL SERVICES buying 2.4 million shares. They convinced an institutional investor to take a large position in fact the second largest position of all institutions. This was a major step in the right direction.
Looks like the BEARS are in firm control. CISCO posted great numbers last night. Beat estimates, beat revenue guidance and also for the first time in 3 YEARS adding jobs. So what happens, it goes down on inventory concerns. The only reason they are adding inventory is because demand is up.
So to answer your question, if Greenspan said interest rates would remain stable, I think market would sell off because that would signal that the Fed is concerned we are headed back into a recession. From what I've seen in the last 2 months the market has a way of spinning all news into bad news.
Cisco Sounds A Bullish Note, Tops Q3 Views
Wednesday May 12, 10:49 am ET
By Mike Angell
Networking gear leader Cisco Systems (NasdaqNM:CSCO - News) reported better-than-expected results for its latest quarter, stoking hopes for a continued recovery in tech spending.
ADVERTISEMENT
Cisco Chief Executive John Chambers sounded more bullish than in recent quarters. On a conference call Tuesday, he said he was pleased by growth in orders from businesses and service providers during what's typically a slow quarter.
"This is the first major growth we've seen in a very long time," Chambers said. "My confidence remains solid and is improving."
But Chambers forecast sales of $5.78 billion to $5.9 billion for this quarter, just a tad higher than what analysts expected, though up 23% to 25% from a year ago. Some investors hoped for more. Shares fell in after-hours trading after Cisco released results.
Cisco's report sets a tone of ongoing strength through the year, said Crowell, Weedon & Co. analyst Chris Sessing, "but spending is not going to rush back. It's going to be more slow, steady."
For its fiscal third quarter ended May 1, Cisco reported earnings - minus one-time items - of 19 cents a share. Analysts forecast 18 cents. That's a 20% rise vs. year-ago pro-forma earnings of 15 cents.
Its GAAP earnings, which includes all items, rose to 17 cents from 14 cents.
The company said sales rose 22% to $5.6 billion. In February, the company said it expected sales of $5.45 billion to $5.56 billion for the quarter.
Cisco shares rose 2.9% during regular trading. But its shares have fallen from a more than three-year high of 29 set Jan. 30.
In early February, the company's fiscal second-quarter report included what investors considered a tepid outlook.
On Tuesday, Cisco said its cash flow from operations last quarter hit a record $2.4 billion, up from $1.7 billion the previous quarter and $1.3 billion a year ago.
Cisco also said inventory levels hit $1.1 billion in the quarter, its highest since 2002.
That can be good or bad. The bullish case is Cisco building inventory to meet future demand. The bearish case is products are taking longer to sell.
Sessing said firms will risk higher inventory levels rather than turn away customers. "They don't want to get caught short," he said.
The latest report also eased fears that surfaced last month, when chipmaker Cypress Semiconductor said its sales to Cisco would be flat this quarter.
But Chambers said Cisco plans to add 1,000 new employees this quarter, which would bring its total head count above 35,000.
UGLY
That is the only word to describe this market. We have a threat of an interest rate rise that causes 3 weeks worth of NASDAQ selling. Now we have both IRAQ and oil prices. NASDAQ currently down the BIG 50.
I thought that yesterday would be the beginning of a rebound. Guess I was wrong. This is no longer sector related selling, this is accross the board dumping on a large scale. Best thing to do right now is turn the computer off and come back in the morning.
Learning2vest,
Funny you should mention PRTL, I made a very nice profit in that firm. A very good example of sector selling. I first bought Primus(PRTL) at $10 sold at $15 it ran to $51 then bought in again at $15. I was also invested in a disaster stock called PSIX. Originally bought at $4 went to $120 and split went to $1.50 and I loaded up the boat and sank to worthless. That pick made me understand the need for investors to read balance sheets.
PRTL went down to .29 cents and I loaded up the boat again at .50 to .60 cents. Sold out on the way up all the way to $11.00 a share. Moved my profits into IDCC.
Their are very good reasons as to why wall street works in sectors. Take for instance the telcom bubble, Global Crossing, Williams, Exodus, PSIX, MCLD, WCOM, all went bankrupt. Wall street threw the baby out with the bath water when selling off PRTL to .29 cents. But PRTL management did an absolute briallant move in paying down debt and repairing the balance sheet.
I'm much more impressed with IDCC today than I was on Friday. They gave analysts what they wanted in guidance and analyst have been rewarding them all day with a steady flow of buys. I think they finally figured out the game and eventually the share price will reflect it.
I stated prior to yesterday that I firmly believe we will hit $27 before Novembers earnings release. Nokia money will look way too good for speculators not to want to make a play. Now we have guidance that will prevent more death spirals from now until then. That will give institutions the warm fuzzy feeling that they can come back and not expect any more 10 point bombs like March and last July.
P.S. I like CLST for a July run past $10 from $7 here. Way too much revenue and value for a stock with a market cap of $140 million and sales of $1.8 billion.
I beleive that it is very much about sectors. The NASDAQ and specifically the communications sector was/is being sold off in a big way. We had a major rally in Jan/Feb.
LU for example was $2.89 Jan 2nd.
2-Jan-04 2.89 3.15 2.86 3.12 98,770,600 3.12
3 weeks later it hits $4.52
27-Jan-04 4.52 4.70 4.50 4.52 129,629,904 4.52
Same can be said for NT, UTSI, CSCO, SWIR, NVTL, etc..etc..
From what I've seen over the years money moves in sync. It goes into sectors and out of sectors. I guess it is kind of like institutional grocery shopping. They buy accross the sector and sell accross the sector.
It is murder trying to buck these trends. I know I've gotten murdered the last 2 months. I beleive the NASDAQ will be back and the communications sector will rebound. Bought some LU yesterday during the crash.
CSCO has had a habit of setting the tone for this sector. If CSCO shines tonight maybe we get a turn around.
"it comes down to only one thing as far as im concerned....the quality of the shareholder base....in a word...it just plain sucks...to put it succintly we have too many fast money,overleveraged,easily discouraged shareholders....and not enough of whatever it takes to have a higher price."
We will never get a proper share price until the institutions start buying the story. I beleive a major problem occured because of the "Nokia is coming" presentations that IDCC has been echoing for the past year and two months. We have had two major dumpings since then because the institutions found out that Nokia was not coming.
11-Mar-04 18.85 19.22 17.54 17.70 2,442,100 17.70
10-Mar-04 20.20 21.68 18.41 19.05 8,017,200 19.05
9-Mar-04 26.25 26.29 24.03 24.60 1,946,100 24.60
23-Jul-03 17.00 19.15 17.00 18.62 7,270,600 18.62
22-Jul-03 23.85 23.98 17.20 17.71 4,857,300 17.71
21-Jul-03 24.02 24.30 23.41 23.54 412,800 23.54
The last dump brought our institutional holdings down to 30% from about 39% if I remember correctly.
Ownership Analysis # Of Holders Shares
Total Shares Held: 131 16,755,117
New Positions: 11 825,570
Increased Positions: 41 2,993,483
Decreased Positions: 75 5,161,222
Holders With Activity: 116 8,154,705
I like the new story that I heard yesterday. Yes Nokia is coming but NEC, SHARP, ERICSSON are here and RIMM, HTC & Sierra Wireless are growing.
Now I think the next step is more investors conferences and of course more licenses. The new story that IDCC is here now and profitable needs to be told. The new story is easier for institutions to digest then the slippery story of Nokia is coming that they seem to be very tired of.
Sold Out Positions: 35 3,105,516
Marsala is only interpreting the guidance that was given to him. IDCC is being conservative and rightfully so. The $27 to $30 million per quarter estimate comes out at a top level of $123 million per. Marsala lowered his revenue numbers from $130 to $126 million because of this.
Sounds like a great idea.
Anyone got an extra 50k they can lend me until next year.LOL
I don't think SAMSUNG will every get to arbitration. The schedules are currently running behind each other. Nokia was started months in advance and I'm assuming it will finish before SAMSUNG is heard. If NOKIA loses SAMSUNG will sign a deal.
What has happened is when the Nokia hearing was pushed out till January, everybody left and will come back October and November. They had previously pushed the Nokia story for close to 1 year.
Now I beleive they are the right track. Nokia will come but look at us now, we have real revenue.
Next step should be a new powerpoint presentation exploiting this current revenue stream. This is real money and real progress, something that analysts can put their fingers on.
I'm not trying to be negative but the fact is we had a blow out quarter and the stock is down and only 3 questions on the CC. This tells me their is a lack of interest in this company right now. This is absolutely easier to corrct then increasing revenues or providing guidance. It is going to take some leg work and a focused campaign to get the new message out.
IDCC is profitable NOW and is here to STAY.
As I'm writing this post we are down $1.04 or 6.11%. We are getting unjustly punished but I strongly beleive the story is much better today then it was on Friday.
The market is UGLY.
LU down close to 5%. Look at any tech stock and see red. Nasdaq just crashed 1900.
The performance of the company was great. In a good market we would be in the low 20's. Unforturnately we are in a bad market especially for high beta (risky) stocks and communication stocks. IDCC would classify in both of these categories.
The $33 million dollar quarterly revenue number is the best that we could possible have hoped for. With current license base we get about $125 mil per year or $1.25 billion market cap roughly $22 a share.
Other than doing a better job of nuturing our current set of analysts I can't see how we can complain about the companies performance.
We got solid revenue projections for the year.
We have positive cash flow.
Potential of new revenue streams.
Windfalls of Nokia and Samsung early next year.
I've complained about many things over the past year. Each one of my complaints have been addressed in a satisfactory manor. I can't be hypocritical and try to find something wrong now just because I'm losing money.
Todays numbers were better than I expected and I wished for and received guidance that projects positive numbers until the Nokia hearing. I thought that they were clear, positive and answered all questions well. I just wish their were more questions.
Biggest problem here is visability. Why only 3 people on call? Really need to get cranking on coverage. I'd start by contacting every single analyst who covers current license base.
Overall I'm happy with the numbers and the projections. Gave guidance to the best of their ability. They may need another big signing "LG" to attract more coverage. Basically I liked what I heard.
DD,
They are doing what wall street wants, some idea of where revenue and costs will be. Wall street hates negative surprizes and punish companies that do so. Guidance is positive with POSITIVE EPS. Only problem is NASDAQ futures right now.
Sounds like guidance to me.
I'm very happy IDCC decided to play the guidance game. They put a range of numbers out there that they are confident that they will hit. Also instead of the Patrick Ewing like end of year license declarations they give themselves a big cusion of 7 months instead of Merrits 7 weeks. These guys are improving in both performance and communication.
HATS OFF TO IDCC.
2004 Outlook
Rich Fagan, Chief Financial Officer commented, "Assuming our key licensees continue to perform well, we expect recurring royalties from our existing licensees to be in the range of $27 million to $30 million per quarter over the remainder of 2004. We also expect to conclude additional patent license agreements during 2004 which should be accretive. Excluding repositioning charges and any higher-than planned patent enforcement costs, we expect that second quarter 2004 operating expenses will increase 4%-6% over first quarter 2004 levels as expenses from a recently implemented long-term incentive program are offset in part by cost savings from repositioning activities. We currently expect that our operating expenses for the third and fourth quarters of 2004 will not exceed the levels anticipated for second quarter 2004. We also continue to expect to be cash flow positive for the full year 2004."