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Anyone....What are the chances that IDCC's M2M IPR is the basis for a "partnership" involving Release 10 at RIMM?
dmiller...This is becoming OT...Did it ever occur to you that those doing the buying for IDCC could be "managing" the stock down in order to buy??? If they were doing their job, that's what they would do. Any major buyers (i.e. Company, shorts, funds) try buy right.
FYI. I sold 20% of my stock ($3.25 cost basis) at 70.
dmiller...If the stock being down is proof of the absence of the buyback, would the stock being up be proof of its presence?? In a way, I wish my reality were as simplistic as yours. LOL.
dmiller.. "They" can drop the price a couple of bucks anytime they want to. IMO, the only reason they don't is 1) the "air shares" they sell in order to achieve a lower price do have to be bought back fairly promptly and 2) The Company might be in there buying actual (real) shares. In either case, there are not a lot of "long" sales going on right now.
OT.. All true Mickey. The problem is that those who could do something about it, won't, and those that would, can't.
OT. Thanks, Fog. I'll check it out. eom.
Mickey......The solution is very simple:
Reinstate the uptick rule (the rule that was instituted after NSS destroyed the markets in the early 1930's and served to stabilized our markets for over 70 years since) and discontinue market maker exemptions.
Problem is Bernie Madoff, Goldman and other heavies spent a lot of financial and political capital to have have both of these game-changing, no-risk, money-grabbing tools at their disposal. These two things have truly made the markets a heads-I-win-tails-you-lose enterprise.
Oh, yes and they have enabled the phenomenon of HFTs.
Those who have controlled the price of this stock for years, using it as their own private ATM, will continue to do so until they are absolutely clobbered over the head with a game-changing event, like a big deal with an Apple-like company. One where the financial benefits to IDCC are immediately, patently obvious.
What I continue to find interesting is Merritt's frequent mention of the $800M revenue goal (from licensing) in the 3-5 year time-frame. Even in today's widely-viewed release he mentioned it.
This is the way I see it: currently we are collecting fees at about a $280M run rate, with no visible catalyst for substantive growth. and yet he continues to insist that we will get there. Yes, today's victory will nudge along settlements and agreements with the non-payers. But, he would be a fool to think that this alone will speed up the process.
If they were to achieve the $800M in 3 years it would equate to about 42% growth per year. At five years, it would still be an impressive 24% annual growth. I would think that they believe in 3 years it will happen but gave themselves some wiggle room with the 5 years. In any case, it is a helluva prediction.
Bottom line, I strongly believe there is at least one imminent deal, maybe more, that will include the sale of patents and an on-going royalty stream with one or more big players (like Apple). To me, this is the only way that they can achieve that very significant growth. JMO.
dndodd... I agree, except that apparently there is no company that would have a need for or be able to optimize the entire, broad spectrum of IDCC's portfolio. It looks to me like, they will raise close to $1B (pretax) by selling patents that are not relevant, or are not an impediment, to their licensing efforts.
In addition, I believe at least one of the sales that they are negotiating will be a partnership that will produce recurring revenue. Merritt continues to cite the $800M revenue number. It would be a reckless prediction unless he was fairly certain that such a deal is probable, IMO. Given their lack of success in licensing the big boys, he would be a fool to think anything is going to change on that front. So, we have to assume that a patent sale/partnership will be structured for ongoing revenues and will have the effect of bringing other parties to the licensing table. JMO.
dndodd...If you take IDCC at their word that new patent sales are imminent and use a prorated $$$ per patent (vis-a-vis the Intel sale) for the remaining 3000 patents, that alone would make the (net) cash equal to a little over $27.00 per share. IMO, receipt of the Intel cash, will produce a special one-time dividend.
If you recall, Aware (AWRE) sold patents to Intel for $75M and distributed the majority of it to shareholders.
BandG.. That's a simple one. At this price the Company could conceivably be taken out as low as $40-45. I think it's worth way north of $80. Also, since I am retired, I have the maximum number of shares that is reasonable for me.
Yes. It is vulnerable right now. The poison pill needs to be reinstated, quickly, IMO.
dmiller...Of course you do. Upon receipt of the Intel cash they will have $800M+ in cash. They have repeatedly said that any cash over $200M (minimum operating cash) is available for return of capital to shareholders. They have announced, to date, $200M in buybacks. What, specifically, do you think they will do with the surplus $600M to make good on this pronouncement? I can't see any alternative. Please enlighten me.
orient...I agree. In fact, I believe that, even in the absence of another near-term patent sale, a one-time dividend will be announced after receiving the cash from Intel (i.e. the closing of the deal in the fall).
dmiller...In my more than 20 years in the industry I have seen many short-term "investors", i.e., traders, get religion and become real investors because, over time, it is the only way to build capital. It's very rare for a real investor to go the other way. The only conclusion is that you never really were an investor. JMO.
Didn't take them long to find a shill. eom
Conference call.....I'll be interested in what they have to say about "returning capital to shareholders" Is a special dividend in the cards? Or are they just going to talk about the buyback?
Mickey.....We will never know whether or not the CAFC has been compromised. My main point is this: if just ONE government- or government-related agency or entity (for example, the SEC or FDA) can be influenced then are not ALL such entities corruptible?
Gamco....As I have suspected for a while now, what this tells me is that someone knows the CAFC decision. JMO.
Jeffree..You are right. It is a "silly" plan. Only those shares closing below the associated strike prices would be "put" to the Company.
As an extreme example, suppose after writing (selling) these put options, the stock goes to, say, $60 and stays there through the end of the year. The Company will end up not achieving the purchase of a single share. Yes they get to keep the premium but have not accomplished their goal of reducing the float and thereby increasing the EPS (i.e. increasing shareholder value).
Once they have locked themselves into these put contracts, their hands are tied until expiration.
In my experience, I have never been involved in a company which used options to repurchase shares. I any event, this would not be a feasible plan.
Jeff...No. I would never expect a reply. eom.
Glenny...FWIW, this is a copy of a letter I sent to the Board on April 29.
April 29, 2012
Board of Directors
InterDigital
Dear Sirs:
While I am certain that you receive numerous letters on a daily basis suggesting how you should run our company, and at the peril of being cast as just another armchair director, I nevertheless am compelled to offer three suggestions. These recommendations are in keeping with management’s continued mantra of “building shareholder value” and comprise the sum total of knowledge and experience gained from my 45 years as an investor in small to mid-sized public companies, and 20 years as a money manager and broker focusing on same.
1) Reinstate a Shareholder Rights Plan. This needs to be done immediately. I was a shareholder (and have been since 1994) when the first rights plan was instated but I do no recall whether it was enacted by the Board alone, or if Shareholders’ approval was required. In any case, I believe it imperative that this be done, even if it requires an amendment to this year’s proxy. I am sure that you are aware that the current stock price does not reflect the inherent value of the Company. Much of this has to do with trading rules that have changed in the past five years and existing rules which are subject to being ignored due to lax enforcement. The result has been that stock prices of companies, the size of InterDigital, have easily been “managed” by hedge funds and others. Be that as it may, the Company, is in danger of being taken out at an inappropriately low price. I fear that the Board would have a difficult time fighting and overcoming an unsolicited bid of, say, $40. Allowing this to happen, by not instituting a rights plan, would certainly be contrary to the mandate of building shareholder value. I believe a minimum trigger price should be no less than $80 per share.
2) Authorize an Additional $200M Repurchase of Shares. Consistent with Mr McQuilkin’s repeated assertion that the Company views an amount of $200M to be adequate for operating capital, and given the fact that the Company currently has a cash balance in excess of $600M and is expected to be cash-flow positive for the year, one would be led to infer that, at the least, $400M is available to increase shareholder value. For these same reasons, my final recommendation is:
3) Issue a One-time, Special Dividend of at Least $4.00 per Share. While implementing 2) and 3) would equate roughly to the implied $400M available for returning capital to shareholders, the Company has stated that the sale of non-core intellectual property is imminent and would generate substantial additional cash.
I am sure you are aware that the Company has enemies, some of whom are determined not to allow InterDigital to take its rightful place in the industry. The continuing over-sized short position in the Company’s stock is emblematic of, and correlated to, this ongoing endeavor. The recommendations I submit here will further the Company’s goal of building shareholder value and, as a side benefit, complicate and potentially thwart these nefarious efforts; which would, in turn, be yet another way to increase shareholder value.
The above suggestions are totally consistent with managements’ stated ongoing commitment to increasing shareholder value. In fact, in appraising the universe of possible actions that could be initiated to accomplish this goal, I am at a loss as to the existence of any other steps that could be taken. If there are other strategies that exist, I would like to know what they are.
I appreciate your efforts on behalf of the Company and its shareholders and hope that you can successfully negotiate the path toward realizing the goal of maximizing shareholder value.
Sincerely,
lurk...Do you or anyone have the institutional ownership site? TIA
Just a feeling. Mickey, I agree with you. but...
"No viable company with the patents IDCC holds should ever be trading at these low prices". What continues to confound me is that even at the low end of the range of patents sales of this type, that have occurred recently (About $350K to $1.2M per), less cash, IDCC should be valued at well more than twice the current price. And yet, those who have played this stock like a fiddle for almost as long as I can remember, don't seem to be concerned. What is it that they know (if they indeed do) that we don't. (Please anyone, don't tell me that their patents are inferior. Save your breath).
Not worth answering. eom.
"patent sales and licensing joint ventures". IMO, it is possible that the management shift may portend an imminent patent sale and/or licensing joint venture. My guess is that both of these will be incorporated in one deal.
For those who want to open their minds to what is really happening in our markets, take some time to watch (listen to) this. I will not be able to but, then again, I already know what it's about.
http://finance.yahoo.com/news/overstock-com-ceo-patrick-m-225200622.html
dndodd...All good points. To me, the most telling is the significant drop off in retail investor volume. To me, this is emblematic of what I have been saying for a while. Though the average person may not know the mechanics of the way the market works, there is a sense that they cannot win, that the market is not safe or fair and, IMO, they are right.
DR..OT...True dat. eom.
jtki99...OT...Couldn't care less whether you "bite" or not. The rule changes and lax oversight of the markets are facts. IDCC is not the only stock that is played like a fiddle. The market is broken. Whatever position you establish in this market, if GS or hedgies are on the other side, you will lose.
IMO...The continual, almost-everyday downward movement in the stock has much more to do with manipulation than it does the current fundamental value of, or prospects for, the Company. It's very simple. The lack of an uptick rule (removed in 2007 at the behest of GS (et al) and hedge funds) and the very lax rules regarding stock delivery enable the manipulators to move small to medium size companies stock prices anywhere they want. It is almost always to the downside as this is the path of least resistance and it is less risky.
dmiller...One has to, after this amount of time, give credence to the possibility that undue influence has been exerted at the CAFC to keep IDCC out of the game. It is very possible that hedge funds and others are privy to this information. JMO.
GBR...IMO, if there is (or was) a Plan B, I think one would be a little premature, after only 9 weeks since the termination of the SA, to declare a Plan B to be unsuccessful or non-existent.
GBR...I agree. IMO, the only thing that would contradict your assessment would be if Merritt, in the short term, delivers on one of the possibilities he mentioned after the end of the SA. I.e., a strategic chip deal with major player, prudent sales of non-essential (to IDCC) patents or closing a licensing deal with a big fish. BM's window for continued employment is growing smaller each day.
Jeff...So if Cinterion is the biggest M2M module maker and they have 33% of the market, seems like the other 67% should fall in line fairly easily.
Also, IMO, this upgraded deal was essentially done at the end of last week, i.e., at the end of the first quarter. If there were any true-up or other payments, even a few millions dollars, IDCC will beat pre-announced revs. for Q1.
Yeah. I got that. They sold their long position. They are not required to update their short position. Many hedge funds are long and short the same security at the same time. Makes the manipulation a lot easier. (Although with the ability to short on downticks, keeping a small amount of long shares is really no longer necessary).
Jiff.....IMO.. SAC has been, and probably still is, short many more shares of IDCC than it is long. Again, IMO, they have been one of the biggest manipulators of IDCC over the years.
BandG...Bottom line is that the biggest downside of the end of the SA process is that the manipulators (shorts) are back in charge, emboldened by their perception that no major upside event can blow them up. I hope they are wrong.
OT...nokiashill...Being a fisherman, I can understand your statement. Any other interpretation, I am at a loss to comprehend.