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Loop: NOK has just made a deal with ATT modeled after Apple's deal for the I-phone. They are going to have ATT subsidize the E-71 which is a worthy competitor to the I phone and will cost $100 with an ATT contract. The first OVI stores will be opening in the U.S. The significance of this is that NOK is now serious about leveraging their advantages in scale, finances, and in low cost manufacturing in the American market. Paying IDCC a fair rate is just a drop in the bucket to NOK compared to what they intend to invest and the revenues they intend to harvest in the U.S. They will not sit around for 4 years under an injunction preventing them from going ahead with their expansion plans in the U.S. while a DE court dithers on a FRAND rate. They will make a fair settlement when they are pushed to just as they did with QCOM.imo
Loop:I understand that ITC proceedings are not focused on rates but on infringement and potential injunction of importation of infringing products. Also, an appeal by NOK to the Obama administation would not be about rates but about whether an injunction would do damage to the public interest. With an abundance of competition supplying product to the American market, this would be an unconvincing argument. imo
Loop:You said "Please post your timeline for accomplishing setting a rate via litigation and we can go from there" I have no doubt that an adverse decision at the ITC would be appealed by NOK to the Obama adminisration. I would hope that that the appeal would be rejected within a few months and then NOK would agree to a fair rate so as not to have its plans to put more emphasis on the American market impeded.
IDCC is faced with a choice in regards to its 10 year efforts to have NOK pay for its patents that NOK has been using. They can either make a poor settlement now or take the dispute to a court decision. Another reason for IDCC to take it to a court decision is as follows: Until now they have been forced to accept inferior rates from various OEM's. They could argue that they have been forced to accept these below market rates because of their poor financial condition and their need to establish credibility. They have now signed half the OEM's to licenses, which makes them credible and they and have improved their financial position. NOK will always argue that the rate that IDCC is asking for is not FRANDLY when compared to previous settlement rates. This argument can refuted by IDCC by citing the poor financial conditions and credibility issues existing in the past. However if they give NOK a low rate at this time, all other potential licensees will be able to argue that this low rate is in fact the FRANDLY rate when it comes to IDCC.
IDCC dropping the 60 million dollar credit line in an economy where it is very difficult to get credit is an indication of how favorable IDCC views its present and future cash position to be.
Loop: I wouldn't attach too much significance to it. T.C. asked a question about a group of management's options and included ,in the question, taking the company private as one of the options. W.M. gave the standard reply that all options were on the table.
I agree. I'm tired of all the confident talk by management about our IPR followed by mediocre settlements which imply a lack of confidence. Another mediocre settlement(this time with Nokia) and I'm out of here after ten years of heartbreak and losses in the seven figures and good riddance to this game that management is playing with us where they and the traders are the winners and the longs are the losers.
Nicmar: "it is important to nokia to expand their market share in the US, but Nokia can always pay for a license whereas a loss for idcc would be devasting."</>
True, but a loss for Nok sould bring a fair rate of 3% while a settlement would probably bring a sweetheart rate of much less. I say let's go for it.
Nicmar: I disagree: with your comment" the ban isn't quite as important as some believe in relation to the itc as the ban would be only for nokia sales in the US" Nok's main thrust at this time is to make inroads into the U.S. market and this initiative would be thwarted by the ban.
The Sam settlement just about guarantees that we will have to go the distance with Nok to get a reasonable rate. Seeing this, management decided to take their huge bonuses now just in case.
We will sign NOK either by settlement or by court action but I have no doubt that it will happen.
Having had the same experience as Loop in having had two posts concerning the moderator deleted, I stand by the same decision Loop has made. If necessary we can communicate through Yahoo.
Slacker: "I would like to see them capable of signing agreements and renewals with the major players, that resemble those with less significant players - a cash lump sum, plus a unit based robust percentage royalty. Recent deals that are fixed fee, combined with forgiveness of past obligations and/or sales, don't present the same migration growth dynamic, and market confidence.
"Absolutely agree, but the fact that they didn't with Samsung leads me to believe that this is never going to happen. IMO, that settlement ended the dreams of a gigantic return for IDCC shareholders."
The fact that Idcc gave a sweet deal to Sam does not obligate them to give the same deal to Nok any more than they were obligated to get superior deals similiar to those which they've gotten in the past from other eom's. NOK has tossed Idcc around like a cowboy in a bull riding contest and this is perhaps our last best opportunity to show that we've got the right stuff.
Rather than losing Jim as a moderator, we should consider moving to another board. We've done it in the past successfully and we can do it again.
When NOK signs, it must be a QUALITY contract rather than a feeble fixed one. IDCC may then negotiate QUALITY conracts with ERIC and Mot and other OEM's. Also, as present contracts expire, IDCC can upgrade these to QUALITY contracts. However a court decision in favor of IDCC may be necessary before any of this can take place. Armed with this decision, IDCC can be viewed as a company starting its growth phase rather than ending it.
Until the signing of Sam, the rational for fixed fees was to give Idcc credibility as a legitimate IPR company and to provide cash for future litigation or, if not the actual litigation, then at least the spectre of same. Now that we have achieved these goals, there is no reason to cave in to the low fixed fees that Nok would like and is holding out for. There have been many supposed "watershed" events for Idcc in the 10 years I have been a follower , but I believe that the signing of Nok is a true watershed event which will make or break Idcc for the future. If Nok will not settle for a reasonable license, I would be in favor of going all the way to a court decision with no recriminations if it does not work out. It is time we exorcise the Mot decision for good and get on to bigger and better things. No more feeble licenses coupled with extravagent handouts to management. Its time for the shareholders to participate in some of Idcc's victories without having to resort to the sale of their shares and we should now see some dividends instead of just buybacks. Then we will know that management and shareholders are truly on the same page.
m3s:I believe IDCC may have bot yesterday and the shorts covered. The shorts are now back and soon IDCC will buy again and this will go back and forth for a while. NOT<b/> a time for IDCC longs to sell imho
Eric: "and PDC walked away with TDMA based WiLL fixed mobile wireless telephony, but while Qualcomm's CDMA based fixed WiLL is still dominant, PDC is declining quickly. TDMA based GSM technology never made any meaningful impact on the fixed WiLL market."For many of us statements like these are less important than the fundamental questions:
1.Are the IDCC patents now before the ITC valid?
2.Are they being infringed upon.
If the answers to both these questions are yes as I think they are, then IDCC should prevail.
The stock price is depressed by a lack of trust. Ordinarily the strategy of buybacks is unimpressive but with the the stock price so artificially low, I think it is a good idea. How do you restore trust and confidence in IDCC? A really fair licence from NOK, not a puny one, and not followed by more gifts to management, might help.
Great post John: "A Nokia spokeswoman said the company was “reviewing the decision and considering its options.” I think the most compelling option would be for Nok to settle and get get going in claiming a share of the American market.
Usually when a COB resigns, the stock price takes a hit. I believe that if H.C. were to resign, the effect on the stock price would be positive. This part time CEO's recent actions, as well as those over the years, have promulgated policies of self enrichment, lack of concern for shareholders,
and lack of transparency. I still believe IDCC has the assets to become a great company but I do not see this happening as long as H.C. is at the helm.
The recent bonus incident is not the problem but is rather a symptom of the problem. management has looked at two different strategies. They could either take reasonable risks with the goal of growing the company into a much larger and more successful one or they could minimize the risks and go with the conservative strategy of generously compensating themselves with lavish salaries, bonuses, and stock options which they dispose of in a timely fashion. This creates wealth for them while the shareholders go up and down the price roller coaster never achieving the breakout contingent on IDCC being taken to the next level. Evidently management has chosen the conservative and sure strategy to enhance their own wealth without concern for the finances of the shareholders.
O.T.Poche: Temporarily relaxing mark to market on specific assets may not be so off the wall. The government could figure out an estimated price on these assets, set up an exchange for them, and then, after a period of time, agree to make good on a percentage of the losses or capture a percentage of the profits when the assets exchange hands at that time.
I believe the recent dive in the stock price is not only due to the earnings miss but to the way the bonus incident was handled with a consequent loss of credibility and trust. No way management should have allowed the incident to play out in this manner IMO.
Jimmy: I agree with most of what Forbes says but it is not quite as simple as he makes it out to be as regards mark to market.
"If the president really takes Roosevelt's legacy seriously, he should suspend mark-to-market accounting rules, restore the uptick rule, and enforce the prohibition against naked short selling."I believe the failure of ENRON to mark their assets to market was what gradually got them them into a lot of trouble. I believe there should be a government appointed panel made up of the best economists and business people available that looks at specific assets on a case by case basis and makes a reasoned decision on what these assets should be valued at. This arrangement should be temporary with a return to mark to market as soon as the crisis is over.
IDCC gained $.70 from its lows in the last hour of trading. This is a sign that the margin selling is played out, IMO. We can now re-assume our rise.
I am enraged at management's handling of their outsized bonuses. While enriching themselves, they showed a callous disregard for the interests of the shareholders who got no bonuses and who not only lost huge amounts of money but, in many cases, were forced to sell their stock. This could have been readily foreseen by management and IMO probably was. Management have held on to relatively small amounts of the shares they have awarded themselves over the years and obviously have less interest in the stock price than in their bonuses. These policies will only continue into the future. Chances of removing them are slim to none. I believe that a reasonable takeover offer for Idcc would be well received at this time.
I feel 50% emasculated by the lightening bolt that hit yesterday. Would it not make sense to defer the slimchip disposition until Nok is settled so as to avoid the other 50% of the emasculation?
This is a good time to keep our emotions in check and just hold on. The next few days may see some softness. The market is weak and getting weaker and those on margin may need to sell some or even all of their Idcc shares. If we are lucky enough to be able to walk away from today's bombshell and get to a shelter, we may be able to emerge in a few months and be right back where we were before the raid and probably even better off.
Red: Idcc is in a kind of limbo until the Nok deal gets done. This deal will determine the future direction of the company as well as the size and scope of its new initiatives. With ample cash there are plenty of opportunities out there in this environment to grow the footprint of the company. New or expanded businesses could be anything from chips to software to services. These are exciting times. I agree that paying dividends is not Idcc's most pressing thrust at this time.
Nok is now competing to gain share in the American market for their handsets and to quick start the sale of their new services business, which may find more a more attractive market here than elsewhere. They do have a big stake in the outcome of their little skirmish with Idcc.
TC has shown us much courtesy and I thank him for this. I feel,however, that the critical element in his thinking is that Nok will not sign soon. He feels there is an "absence of near-term catalysts to significantly impact share price". I have a note posted on the border of my computer screen that reminds me:"Nok will litigate in every possible instance". However, with Sam having signed at a reasonable rate and with the cards clearly stacked against them at the ITC, I think this instance will be an exception to that rule. Nok does not need the reputation as AN OBSTRUCTIONIST COMPANY PRONE TO ABUSE THE LEGAL SYSTEM. Therefore I believe they will settle and get on with the business of penetrating the American market with their products.
Dmiller: What you advocate is a conservative method of trading the market. It is, however, not without risk. What you have done is set a 2 or 3 dollar stop while you watch for further good news. Bad news at this point becomes less likely than good news The questions are how imminent and likely is this good news and how rapid and strong will the market reaction be. I believe the pump has been primed by Samsung and signing Nok may produce a sudden gusher that could wash your model away. It would be a shame, after studying this stock for all these years to walk away with measly gains. On Wall St, bulls make money, bears make money, eunuch's don't.
The discussion here is reminiscent of that following the APPLE deal. This deal is definitely better since we can renegotiate in 4 years rather than in 7.
Looking at the bright side, the key to this deal is that Idcc did not give Sam a paid up licence for 3G. This means that we can and will renegotiate in 2012 for additional revenues. We also can use these funds ASAP to pursue to the max the rest of the MENS club for royalties they owe us for past and future use of our patents.
When management prematurely rewarded themselves, they added significant risk for the shareholders. Negotiations are all about leverage. If Sam were to reneg on the settlement and negotiations were to continue, management would have a tremendous incentive to sweeten the terms for Sam to make a deal in order not to look like avaricious bumblers. In the end, shareholders would pay much more for the loss of leverage than for the generous amounts management already showered on themselves.
No company needs 45 days to choose between one of two payment options. Either Sam was looking to do the deal in 2009 rather than 2008 for tax purposes or this was just another delaying tactic, even though short compared to previous ones.
The recent Sam-Idcc agreement was done in the spirit of reconciliation. The 45 day delay in paying was agreed to in that spirit also. Now if Sam chooses to delay futher, it would be, at best, a violation of the spirit of the agreement. Also, having prematurely rewarded itself for accomplishing the agreement, Idcc management owes it to its shareholders to be as transparent as possible as soon as possible.
"Why didn't they wait until the Sammy details have been released and hit the wires?" I think the answer is that they intend to do a buy back soon after results of the Sam license are announced and it would have been awkward to be withdrawing shares from the market while giving themselves shares at the same time. Also the shares may soon be worth more, making their gifts to themselves seem even more generous.
The psychology on this board is weird. IDCC is due to go up 10 to 20% in a couple of weeks in about as sure a bet as you can make in the market and everyone here is arguing about whether a recent piece of further good news is sufficiently good to report on. The whole thing seems a little sick.
I think that 2 events should soon propel IDCC towards $35/ share. First the completion of the signing of SAM will lead to expectations of the signing of other tier one players. Secondly the coming on board of new analysts, after the announcement that SAM has chosen a payment option according to their binding agreement with IDCC and has actually paid, should help the stock price.