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Joel, here's an online article
http://espn.go.com/page2/s/list/worstcityyear.html
If the link doesn't work, just type in the web address and it will.
Note that Philly comes in 1rst and 4th for worst sports year for a city.
To quote W.C. Fields tombstone,
On the whole, I'd rather be in Philadelphia.
Nice day today
Sharp was expected, but it is nice to have it inked. BLACKBERRY is very exciting to me. While we don't have $'s or rates, it is validation and builds that all important MOmentum. On the technical side, IDCC retraced about half the prior run up, so we should be ready to move to a higher base. A short squeeze might spike us up a bit higher. I'm feeling smarter all the time.
The vote is over, good things are happening, so let's all get back to sharing our DD and enjoy the success from our investment with IDCC. It's a wild rollercoaster and the best part is yet to come!
The poster formerly known as fmilt
Data,
What do you see as our strongest, most collectable patent or patent area?
I am fairly ignorant in this area, and my air interface comment was based on my (faltering) memory of prior discussions regarding IDCC's IPR. I appreciate your posting the updated patent status, but I have no idea what the possible significance is related to these. If you or anyone can shed some light on IDCC's strengths and potential pitfalls in regards to patents I'd apprecitate it.
I do understand that until licenses are signed, it is all conjecture. I prefer informed intelligent conjecture and hope no one will be dissuaded from posting by criticism by others.
Data or others with technical knowledge,
Not being a techie, I can't really tell what is happening with these patents. Is IDCC building on their established patents (I see one to do with TDD handover) or moving into new areas? Are other companies creating patents that build on or supplement IDCC's patents? Are their companies who have patents on processes that compete directly with our patent, especially our most important patent area, air interface?
Any help would be appreciated.
Unintended consequences
Maybe an unintended consequence of voting yes will be the loss of institutional investors. If they see management that continually dilutes shareholder ownership and shareholders who go along with it they may look for other investments. Maybe institutions prefer informed shareholders who analyze proxies to those who feel a vote against a management proposal is somehow disloyal or an indication of poor management - it isn't.
Sorry JimLur - This is my last public post on this before the vote.
The poster formerly known as fmilt.
Regarding trusting management
Gamco's response to me that he posted might lead folks to think that I stated that I distrusted management. Just to be clear, here is the substantive section of my PM to him.
"People tend to expect others to act as they would in the same situation. Your comment shows that you are an honorable person. I am a bit more greedy, so I don't quite have confidence that management will put outside shareholders interests even with their own. Like many, they will see shareholders that by and large have "gotten a great return for our work". This will lead to disproportionate allocations to them. I trust management to do their best work for the company and to be honest and ethical. My trust is tempered when anyone gets to choose how to divvy up the profits between me and them. Can't imagine I'm going to come up on the winning end of that deal."
I've been away for a week and came back to 2,000 new posts. I gotta say I recommend it to those, who like me, get too caught up in all the day to day stuff. This board has been a great resource and will be again after the ASM is over and the repetitive campaign posts disappear.
The poster formerly known as fmilt.
OT: fmilt has a new handle
I am officially The Count.
The posts I will make are true. The name was changed to protect the innocent.
DA.... DA DUM DUM
DA.... DA DUM DUM DUMMMMMM
JimLur, very good post.
I just got a PM referring to your post, and I am stopping right now - so Dish, you get the last word.
mschere, a TIE. What kind of sadist are you!!!
very funny - thanks for the laugh.
I respect many people on both sides and appreciate the passion.
The Count signing out.
Danny_Detail
Frank .. RE:"To anyone whose interested in selling me options on a similar basis to what IDCC grants, let me know. Give me a strike price, cost per option and expiration date because I believe those options are worth a lot. Show up the CPA and take his cash! I AM serious."
Before I would do that I would want to know what you are going to do to build shareholder value and, in particular, to build institutional demand for the stock so that the stock I own will rise as quickly and as far as possible.
EXACTLY, before giving management more options I want to know what they are going to do build shareholder value.
The point I was making with my very real offer is that there is very significant value related to option grants, and I'm willing to put my money where my mouth is. There needs to be a great deal of wealth built by the company due to the use of the additional options for the options to have a positive effect on share price. How can one value how management will improve the market cap when they won't give any indication of why the additional options are needed now?
I believe IDCC's share price will be significantly higher in two years regardless of this proxy and how many options that are issued to management. I just happen to believe that the share price will be higher if they don't get the extra 5MM shares for options than if they do.
Dishfan, let me try a different approach
If these options only cost the company $1, why wouldn't IDCC sell these to the public. teecee estimated the value of a 10 year option with a $60 strike price at $10. One at market price has to be worth twice that. So IDCC can sell a ton of these options for over half the price of a share AND get the cash when the options are exercised. Or offer options to pay for other goods and services.
IMO, one cannot spin straw into gold, nor can one give away options that have a greater value to the recipient than cost to the giver.
The fact that the end result of option grants varies widely and is difficult to value doesn't change that.
If this doesn't carry any weight with you either, than I'll thank you for the cordial dialogue and agree to disagree.
To anyone whose interested in selling me options on a similar basis to what IDCC grants, let me know. Give me a strike price, cost per option and expiration date because I believe those options are worth a lot. Show up the CPA and take his cash! I AM serious.
Dish, can't agree with $1 per share
The new options will cost nothing (zero dilution) unless the value of the company increases. So, we must assume a higher market capitalization to determine the cost (dilution).
Not necessarily. It is absolutely true that no one will exercise an underwater option, however, they will exercise and sell while in the money, and the dilution does not go away if the price falls. There was dilution between 1999 and 12/31/2000 when our price fell to $5.00.
Let's assume InterDig grows to a market cap of $3b OK? (The higher the number, the greater the dilution.)
At a $3b market cap the PPS is $50 assuming 60m shares outstanding.
If 5m options are exercised there would be 65m shares outstanding and the PPS would be $46.14.
The 5m exercised options would have cost us $3.86 per share.
Correct. It will cost each current investor an additional 1/13th of their investment, both the cost and profit, whenever they sell at whatever price.
However, the optionees would have paid cash for their options equal to the strike price. If the average strike price was $35 per share, there would have been $175,000,000 added to InterDig's capital (and, presumably, to its market cap). So the cost to us is reduced by $2.91 ($175m/60m).
I don't agree. You adjust the market cap for $175 million cash coming in but do not adjust for the proportionate loss of ownership of the current cash and other assets in excess of liabilities. Look at my post 22443 which lays out the valuation comparing the use of options vs. cash for compensation.
Also, InterDig gets a tax break for the options - I don't know what that's worth.
See my post 22443 regarding this as well. BSW did not respond to my comments, so I am still unclear about the tax benefit to be gained by using options instead of cash compensation.
Bottom line - the CPA's are in a tizzy over a net cost of less than $1.00 per share. Don't be fooled - as long as the law allows, options are good for your InterDigital investment.
I don't agree they are a net cost of $1.00 per share - check out the option quotes to get some parameters on the value of options. However, in the spirit of being generous, instead of giving them options lets give them a $2.00 cash per option bonus (subject to the same vesting) instead. They get double what its worth.
Dish, I respect you and understand that you do believe that management with these options will be able to increase shareholder wealth beyond the dilutions affect. With that belief you are doing what is best for the company by voting yes. I don't see any shortage of cash or available options to continue with the business plan the company is executing. I want a more definitive answer as to why the options are needed now to convince me, so I am voting no. Two calls to IR where I politely stated my question and left phone and e-mail contacts have not been returned. Has anyone else had any discussion on this with the company?
One aside - I gotta laugh at the rap CPA's are taking here. In a tizzy, wanna be consultants, bean counters. Folks, we are people who count money and work with financial information for a living. We are invested in this company and want to maximize our return. We may not be the smartest or most eloquent posters here, but when it comes to analyzing numbers don't discount our expertise.
The Count
OT Nope, it said "It's an IDCC stockholder"
Once, management is just following your lead
Indemnification is a HUGE issue for IDCC down the road, just wait and see. But the way management is trying to put the most positive spin on everything this morning I anticipate they will not want to discuss this or they will try to brush it off as business as normal.
Who would think a company's management would focus on the real and important positives during a conference call. They were planning on spending a lot of time discussing the negatives, but then they decided that they should only present positives to balance out all the negatives that you post, just as you only post negatives to balance out the positives.
When IDCC's success is proven by 3G licenses with the big players I'm sure you will just disappear from the board without evening admitting that you were as wrong as the Chicago paper that headlined "DEWEY WINS."
Up almost $2.00 on 2 million shares and you say 'look at all the sellers.'
You can close your eyes to the positives and potential of IDCC, but it will just prevent you from being prepared to take advantage of it.
Even a fool may be wise after the event. ~~ Homer ~~
I'm beginning to see why Homer used "may".
You should hear music now if you are properly logged on to the webcast.
Learning2vest
OK, maybe I'm the only investor who does not look up the market cap and divide it by the total shares outstanding to find out what the share price is. I really thought it worked the other way. Good thing you and Corp_Buyer explained that process.
I can't believe you don't understand this. Please consult your broker, investment advisor or an investor you trust and respect and ask about it.
But why does the ticker show stock prices? Shouldn't we be seeing market cap and shares outstanding numbers go by so we could all be doing it right? LOL!
Because we buy shares so that is a meaningful figure. However, decisions are made based on the value of the company, which comes out the same whether you compute the market cap and divide by shares, or divide all the relevant financial information by the number of shares to get a per share data to use.
Gotta go figure some share prices and quit looking at these quotes I'm getting from Charlie Schwab. Somebody better tell him he is doing it wrong too, I'm busy dividing numbers.
Why does the share price fall 50% when a 2:1 split occurs?
teecee, you're right
I don't see cash becoming a problem so I did not think it through. Good point.
Boogie, I believe the stock will appreciate
I would rather pay with dollars, which are easy to value and measure, than with options that I think are going to be worth far more. Management anticipates having quite a bit of cash. Let's use that first. If cash becomes an issue, the company can sell shares at what I expect to be higher prices.
One who is confident in the future of the company should prefer to pay with cash, while one who has doubts about the future would use options.
Boogie, explain the connection please
I will tell you why we need more options....
10% dilution is nothing when 1 good patent can make this stock go up 40 points....everybody that is anti option grants has no clue of this
Just how many options are required to get them to produce that 1 good patent? Don't we have any good ones yet?
....these are like paying brilliant geniuses paper instead of money....they give IDCC the patents and they only get paid if the stock goes up.....
Please look at the cost of leaps with a strike price at the market. If you think these are worthless, I'll be happy to give you a crisp, new dollar bill (money) for each option (paper) you're willing to give me.
Danny Detail, I appreciate your thoughts
My point about trusting management or my kids is that while I do trust them, I don't feel it’s appropriate to give them everything they want just because I trust them. They need to demonstrate need, not just want. Sometimes my view of what is fair or important may honestly differ from theirs. They know that too, so they may ask me to trust them when they think my conclusion will be different from theirs. If they have the information I need to make my assessment and will not or cannot give it to me, I’m not going to assume in their favor.
As far as selling if you don't have absolute faith in management, I don't understand this. There is a wide spectrum between brilliant, moral management and stupid, dishonest management. Secondly, many of us believe that stock price can rise or fall based on factors beyond managements ability. A mediocre management team can get great results in the right situation. I happen to believe that even if IDCC’s management is not the best, it is certainly good enough to turn our 3G licenses into ongoing revenue streams. That will lead to a much higher stock price. If I was all knowing, and knew that many management teams could get a 1% license on 100% of the market, and knew that the current IDCC management will only get 0.5% on 75% of the market, does that mean I should sell? Hell no. The choice on selling or not is based on future price expectations of the stock. Management is a very important factor, but it does not trump all others. I’ll sum up my belief of the ability of an organization to have great success with mediocre management in two words – Barry Switzer.
To avoid misunderstanding, I do not know if IDCC management is great, good or mediocre. My opinion is good, but until 3G is a done deal, I don't have a strong opinion. I think they are honest.
The Count
2112, regarding trusting management
Those who believe in management, must believe that the options are in the best interest of the company. What everyone seems to forget is that NO ONE knows if mgmt is deserving of increased compensation (if in fact that is what they are attempting to secure) since NO ONE, knows what the hell is going on re NOK, SAM, 3g licensees, etc.
There is a group that does know, and that is management. However, they do not tell us enough to make a reasonable judgement. I have trouble assuming that everything is peachy. I trust management to do their best for the company. I also understand that management is human. They want to do the best for themselves as well. When it comes to a decision on how the capital of the company is to be split up, I'm going to exercise my right and vote. I want to know what they've accomplished and not assume there is a pot of gold behind door number 2. If we can wait for the information, they can wait for more option shares. I promise we have enough shares to handle the next year. What's the rush?
I trust my kids, but I still get answers to questions before they go out the door. I don't give them my credit card or my ATM code. I would if it was necessary, but just because they ask? Not me. When I did audits, one comment that would send up red flags is "trust me, there's a good reason for that."
themaude - One swing and a homerun. Thanks
I can't help myself, damn it
That's an average compensation of $12.8M per CEO for negative shareholder value creation.
False premise - CEO's control stock price.
Unsaid - Their compensation was put in place during the good days when only greedy, short sighted shareholder would vote against raising executive compensation.
If you want to be known as a corporate gadfly with a penchant for questionable data, please feel free to go ahead. Be prepared, however, to be tuned out for being a flake.
RMarchma?? Gadfly with questionable data!? Sheesh. This statement does more to expose your credibility than his, and you should take your own warning.
BSWhy
Freudian Slip without the punctuation? BS, Why?
BSW, we seem to be speaking different languages,
I can't understand what point you are trying to make, and I can't communicate my thoughts effectively to you. I truly cannot see how your response is relevant to my comment. To go back to your original post, you said
These are the folks who don't seem to understand that sales-based multiples result in higher market caps for growth companies that still need to finance their growth plans.
I don't see how IDCC fits into that category. What do we need to finance for our growth? We need contracts. We have thousands of patents worldwide and I believe they have value - I'm not investing based on a new patent to give IDCC's patent portfolio value. Managements projections of cash flow will easily cover ongoing operations. I am expecting IDCC to be a growth company, but unique in the sense that they will not have cash flow issues.
Hope that make sense to someone out there.
To state my basic beliefs,
as others sometimes paint me with a broad brush and I just want to state for the record what I believe.
*I believe management has done a good job for IDCC (not spectacular, but very good).
*I support them and do not want to tell them how to manage the operations of the company. When I comment on how I think they should do things on this board, I am sharing my opinion and looking for others to share theirs to help me evaluate my investment. I am not expecting my posts it to be considered by management.
*As a shareholder, I will exercise my right to vote on managements proposals. If I don't see them as being beneficial to the long term stock price, I will vote no. My support is not unconditional regardless of how well my investment is doing.
*I believe they have been, are being and will be with the plans in place, generously compensated and significantly participating in the growth of IDCC’s stock price.
*I have never criticized management for selling their shares. Once they get them, they are not works of art to be framed and passed down. They are a storehouse of wealth that they should use for the best interests of themselves and their families.
*I believe compensation should be reasonable, fair, justifiable and proportional.
*I believe IDCC is being valued on the expected forward PE. The current and recent PE figures are not a meaningful. The market looks ahead. IMO, investors are projecting 2003 and 2004 income and ongoing growth to come up with an expected share value. The are then discounting it back to today, factoring in the risk of IDCC not reaching those expectations.
I do believe my conclusions flow logically from those assumptions. If you disagree with my assumptions we can discuss it or agree to disagree. If you disagree with my logic, point it out so I can learn. But please be intellectually honest and strive for the truth, don't try to win debating points by using rhetorical methods.
Finally,
*I am long IDCC (100% of my portfolio and Roth IRA). I am not loyal to IDCC. It is an investment that I chose and at some point I will choose to exit. I am loyal to good and helpful folks on this board who have chosen to help unknown people in cyberspace, including me, by sharing their thoughts and expertise. If I heard bad news on IDCC, I would sell and I would also let the board know to mitigate the damage to folks here that I respect and owe a lot to. Without JimLur’s boards, I would never have been able to do the DD required to keep me believing in the great risk/reward ratio that IDCC had throughout the post bubble market and see the low share price as irrational pessimism and a buying opportunity instead of seeing it as a true reflection of IDCC's value.
I am going to cut down on my posts, as I’ve been littering the board quit a bit lately and I’ve said it all more than once. If anyone has a specific question for me, feel free to PM or send my an e-mail, my address is in my profile. Good luck to all, and I hope that the share price makes Mickey’s wildest dreams look like Once’s expectations. (If I’m rambling incoherently, I’m trying to say “To the moon”.)
Thanks for the patience you’ve shown to me over the past couple of weeks.
The Count
Thanks for pointing out my mistake
No, the company does not recapture the cost, nor does it take on additional expense if the option is exercised with a much greater spread. The question is whether estimating a computed expense is more accurate than using zero. Since this ain't up for a vote, I'll leave it at that.
Sorry to be so dense in my original response.
Thanks Danny, well thought out as usual
I apologize if my posts come across as dogmatic. I don’t use IMHO because no one would believe I’m humble, and I don’t use IMO because unless I’m stating past facts, it is by definition just my opinion, and for a real laugh, I try to avoid redundancy in my writing. This will violate my own request for brevity, so those who’ve heard enough of my bs as one poster so eloquently said, time to hit the “Next” button.
When I said
"I don't see how these options are going to increase value to the company or not granting options will cost the company, so avoiding dilution will maximize shareholder value."
I was not trying to
reject out of hand any chance that these options might motivate management to work harder and smarter to maximize future earnings to the shareholders' benefit.
I was just stating that I am not seeing how the use of the options will significantly increase market cap. Management has not given any explanation (my call to IR is still not returned), and while some have pointed out some possible ways it can happen, not have be persuasive to [b}me. I am open to hearing what others think, and if I see a good case that I think is reasonably possible, then I'll reconsider.
Then to make your case airtight you assert that in the case of defeat management will not take actions to reward themselves in other ways that might be just as "dilative" to eps and/or that their focus on building shareholder value will be unaffected by what will surely be a significant blow to their morale right at the time when HG says "we have momentum going for us."
IMO, to think that they would take the actions you suggest is very damning of management. It means that they would work to circumvent the will of the shareholders and/or are more concerned with building their own wealth than that of the company or they lack the business toughness to work through a set back productively. Again, IMO, if #2 failed and what you suggest came to pass would be a sign that our management team is not working primarily for the best interests of IDCC. I do not believe that at all.
Thanks again Danny for your Spartan and to the point reply. Please feel free to unleash your word processor and hit me with both barrels.
Good luck,
The Count
BSW, I'll be brief
Apparently there are people who actually want IDCC to have an EPS-based multiple instead of a sales-based multiple during the early stage of its growth. These are the folks who don't seem to understand that sales-based multiples result in higher market caps for growth companies that still need to finance their growth plans.
You are the king of non-sequiturs. It isn't about what we want, it is about what the market will actually do. What any investor believes only affects their valuation of the stock and their decision to buy and sell, not the market as a whole.
I believe the market is going to value IDCC based on EARNINGS. I also believe that IDCC will not trade over $100 this year. It does not mean that's what I want. Big difference.
The Count
teecee,
No need to reimburse for options that expire worthless. The option rules do not change for the recipients, just that the company will be estimating the cost and reporting it.
Danny, I'm confused
Like me, you tend to go on a bit. Could you boil it down for me as to why you feel options would be good for IDCC. I don't know if you've been following the posts lately, but I cannot see a good reason for it.
To be brief:
*Management projects huge cash flow, so cash will be available for our needs.
*I expect the stock price to be rising. Why pay with rising stock than cash?
*As far as incenting, the ESPP and current option plans, along with the basic integrity of doing the job you're paid for to the best of your ability should be adequate.
*I don't see how these options are going to increase value to the company or not granting options will cost the company, so avoiding dilution will maximize shareholder value.
What am I missing? I appreciate your thoughts as I have respect for your background and intelligence. If I'm overlooking something important that will result in a higher share price by authorizing five million more shares to be used please tell me.
OT: teecee, we finally agree 100%
say hey !!!...to the greatest BALLPLAYER of all time
My boyhood hero, spent many an afternoon at the 'Stick watching him as I was growing up. Saw him do some incredible things. For example, Giants/Dodgers in LA, in extra innings, two outs, Mays on first with a bad leg, 3-2 count. Mays runs, ground ball single into the outfield. He never stops running, surprising the cutoff man. He gets the throw to the plate in time, but Mays slides in and kicks the ball out of Roseboro's glove. Giants win. After the game they asked Mays what made him take the chance, and he said his leg was killing him and he needed to get the game over with. Not only did he have all five tools, he had that extra that only a very few have.
I was hoping we would close at $24 or even $24.24 today. Almost.
My apologies for beating a dead horse
bsw and L2V
This is a waste of time. What did I just say? You're trying to reduce valuation to an exact science!
An exact science would mean I was putting exact values to the cost and benefit and analyzing all the factors. I am stating what I thought was an obvious fact about the relative relationship between what dilution needs to accomplish to make it a positive for the share price.
Dilution that does not bring about an increase in the market cap that is at least the same % as the dilution decreases share price."
My goodness, I didn't even think Bagdad Bob could argue with that!
Dilution can occur for many reasons. Market cap is affected by many reasons.
DUH. Not the point. I’ll keep it simple for you.
If the benefit of the dilution (whatever it may be) does not expand market cap beyond the rate of dilution, share price will fall, all other things being equal.
Yes, I understand that all other things won’t be equal and that there are many different causes that affect share price. To try to analyze them all would be trying to reduce valuation an exact science. I'd never try to do that.
By the way, you have a tendency to ramble on and get lost in abstractions without presenting any useful data. Narrow it down. Think aloud in private as a matter of friggin' courtesy.<g>
You may be right. However I do attempt to address all points brought up in a straightforward manner. I suggest to you that you re-read the question you’re answering to see if your answer is directly related to the question you are theoretically responding to before posting. It would eliminate time wasting repetitive posts.
Learning2vest, let me try to “straighten” you out
fmilt, the following statement from your ref post caused the "tilt" alarm to go off when I read it.
"Dilution that does not bring about an increase in the market cap that is at least the same % as the dilution decreases share price."
Understand what you are saying there, but(IMHO) those things are not directly linked like they would need to be for the concept to actually work. "Market cap" is shares outstanding times share price. It's that "share price" variable I'm having a problem with. Making the assumption that the market will value a stock at exactly the same PE ratio regardless of other factors(i.e., like a "dilution" caused by issuing additional shares to do different things), does not compute IMO.
It does not compute is right. The affect of whatever the dilution is used for will affect the expected earnings of the company. If the affect is to increase earning or growth expectations, then that will affect the earnings and the PE multiple. The apparently not so simple point I’m trying to make is that unless those affects can be expected to increase the market cap of the company proportionally more than the stock is diluted, share price falls.
Report back, let us know if it worked!!
Maybe a very militant form of Yoga or martial art might help some of the people here who can't think straight anymore.<g>
<g>
OT: teecee, regarding the Count of Montefusco
I thought you were a good Joosey boy and a sports fan. You should know what I'm referring to. But when I visited NY recently, I noticed anything east of PA was considered not important on the nightly sports report, so you may not have heard, or you may be too young to remember.
I'm waiting to see if anyone out there knows what I'm talking about.
Here's a hint. I'll bet Loop and LineDriveHitter will be able to tell you. Had something to do with the Maltese Falcone.
teecee, thanks for the info
When I did my quick and dirty valuation, I did a simple regression of the furthest out leaps to 60 and came up with a value of just under $1 as of 2005. That combined with my fundamental expectations of $2.00 EPS with 15% growth told me that $1 a share was quite a buy.
If you wouldn't mind sharing where you get the volatility numbers and how those are used in computing an option price, I'd be interested.
Thanks,
The Count (of Monefusco)
I'm not being exact at all
You're trying to be too exact about an inherently inexact process.
just stating a basic fact.
"Dilution that does not bring about an increase in the market cap that is at least the same % as the dilution decreases share price."
For example, you completely left out the issue of financing acquisitions. M&A is inherently more qualitative than quantitative as evidenced by the fact that most mergers that look good on spreadsheets fail.
That does not address the my statement above. What does the difficulty of quantifying M&A activity have to do with my point? If management had indicated that a reason for the shares was to facilitate M&A activity, then you could make the case that the M&A activity could add more market cap then the dilution would cost, but that is a completely different issue.
I hate to sound like an attorney on cross examination, but you answer like a politician, technically correct and saying what you want to say, but not responding directly to the question. You also tend to pick out certain points and ignore the rest. So if you will indulge me with a simple true or false, then you can explain further if you like or explain why you think it is an unfair question if you do. I believe it is very significant and want to make sure those who may be reading our exchange understand that it is true.
True or false: If dilution does not increase the value of the company's market cap by at least the same percentage as the dilution, then it will result in a lower per share price.
Float doesn't matter to me, but dilution...
Growth companies typically dilute their stock to finance their growth plans so if a company can deliver reasonable growth then reasonable dilution will normally be discounted by the street.
They compute what they feel the companies market cap should be, divide it by the diluted shares that will share those earnings and come up with what they think is a fair price per share. Dilution is what it is, they will discount expected dilution of the company, regardless of how reasonable it is. If they see dilution slowing up, they will project a lower share count than if they see it accelerating.
Dilution that does not bring about an increase in the market cap that is at least the same % as the dilution decreases share price.
Split shares if you want more float, but don't dilute to gain float - I can't see expanding float as adding to the long term market cap of IDCC.
BlueSkyWaves, thanks for the correction
I said
"Blueskywaves, your posts seem to equate float with dilution. Float is the number of shares outstanding, and can be increased by stock splits, share sales by the company,"
You replied
This is incorrect. Outstanding shares is the number of shares issued. Float is the number of outstanding shares less shares held by insiders and 5%+ owners. In other words, float refers to the actual number of shares available to the public for trading. From Yahoo, IDCC's current float is nearly 50M shares out of diluted outstanding shares of around 55M.
Like I said, look around. A float of 50M shares is too tight for a soon-to-be $200M a year company that is trying to attract
more mid-cap funds to establish larger positions. A split would solve that, but if IDCC is contemplating the acquisition of a company with existing revenues then that would be preferrable.
By the way, funds flow also appear to be favoring mid-cap funds at the expense of big-cap funds.
So do we agree that increasing float (as properly defined by you) can be done is ways that are dilutive and non-dilutive? I don't see float as an issue, dilution is.
However, I still have the same questions.
Don't funds invest a dollar amount based on a percentage of their fund (e.g., 8% in telecom, and of that 5% in IDCC) without concern about share price? It is a real question, as I am NOT street savvy, so those who know please correct me or confirm. The only price issue I've heard of is that some funds will not buy stocks trading below a certain dollar level.
Supply and demand - isn't tight supply something that leads to higher prices?
I'm having a blast on this ride
and very happy looking at my brokerage statements. But ya know what, if there was a nation wide referendum to increase the capital gains tax or to tax gains inside of Roth-IRA's, I'd be against it.
Yes, I'm doing well. Doesn't mean I'm not going to vote against something that will hurt me in the future. I'm not being a nay-sayer about IDCC's price performance, just nay on #2.
IF there was not a proxy up for a vote, then this subject would be overdone by a factor of 10 (and that's just by me). However, this may be a close vote, depending on the institutional stance. So I think discussing something where we, the shareholders, are going to vote on something that will affect the company in the future, is as important a function as this board could have.
Frank
mschere, regarding accounting for Q1
Question..While IDCC closes its first quarter 3/31/03..How long after but prior to 5/13..can IDCC re-adjust its books to reflect new material financial information regarding its first quarter income? TIA
I am a CPA, but I have focused on the tax side for the last 10 years, so I welcome anyone who wants to correct me, but as I remember, hindsight should be used to get accurate figures on the books. If we are not booking any revenue from Nokia because there is still uncertainty, and that uncertainty goes away before reporting, then the revenue would be booked.
Don't take it to the bank, but what I think.
teecee shows he's a stand up guy
The following is a copy of a PM from teecee to me, and my reply. He gave me permission to post it to the board.
i make the trade because i owe you a print...thats the way it works...the option is worth ten dollars....thats what opening your mouth after a bottle of wine will get you...i usually just lose credibility not money after a bottle of wine...you will pay one thousand dollars to buy one thousand of my shares at 60
Got to give you credit, you didn't blow off your offer. If you're willing let me post this e-mail on the board, I'll not hold you to it. I hope it will show that options, even way out of the money options, have real value.