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A published opinion from a respected analyst is a material event which inevitably affects the price of the stock. Giving a favored few a heads up on an opinion which is about to be published before the opinion is actually disseminated to the public is akin to letting preferred investors read the galleys of the W.S journal or Business Week before the public is allowed to see them. Information should be either be public or private. When it is private one day and made public the next, it guarantees a windfall profit for either the tipped off private investor(i.e. that a report is coming) or the analyst or both.
I spoke to fidelity about how long they would wait after a client slipped under the margin requirements before selling him out. They said 5 business days. This means that after next Monday, all the margin selling should be over. This might vary from firm to firm and be dependent on price movement, but probably won't be over 5 days
Good news would be either a 3G agreement with Sam or announcement of an infringement suit against them. W. S. was holding its breath waiting to find out what was going to happen with Sam. Then the insider selling, then the PJ report. It became a short sellers dream.
I now believe it is probable that we have had a short attack. I also believe that the shorts have not thrown in the towel yet and are hoping that the margin sellers will help them out.If the price goes up in the next couple of days, they will have to back off IMO. Then I would love to see a real short squeeze.
Revlis: I agree. Qcom's complaint is that Nok won't pay their exorbitant rates for 3G. Our complaint is that Nok won't pay anything at all to Idcc, not even at a considerably lower rate than what Qcom is demanding and all this while Idcc has at least as many 3G essential patents or more than Qcom.
The options are rather clear cut with Sam. Either settlement or suit. The terms are also rather clear cut, having been outlined by the LG license. Let's get off the pot here. Let's invite the ICC to announce their decision and have the suit ready to go if Sam proves intransigent. When we lost an arbitration to Sam, we honored that decision. Why shouldn't Sam return the compliment?
They may have been buying in smaller blocks in addition to the large block,covering their shorts and taking their profit. BTW we may see more institutional short covering in the next few days(somewhat offset by some retail margin calls)
The stock has never been in the public eye as it is now and they will be querried by several institutions as to what has happened
I will be surprised if management does not issue some kind of a statement late in the afternoon or after the market closes today.
This is one rational for investor relations having no statement about today's price crash of Idcc:
Potential interview of Janet by the media:
Media:"Do you know of any reason for today's crash in the price of Idcc?
Janet: "Yes,Massive insider selling"
Media:"Do you really think you can keep your job after that answer?
Janet:"No"
Idcc volume so far is more than half of GE volume. For this to happen, there have to be short selling and margin selling. No change in fundamentals has been commented on by any analyst or by the company today.
I have been through this several times in the past with several stocks. A downgrade causes a sellof and it takes a couple of weeks for the price to creep back to near where it was or beyond if there is any good PR.
On the positive side, the general market should be up today and there has really been no bad news except for insider trading to stop the rally and drop the stock. How about all those who didn't get on the train when it was leaving the station. This is their opportunity to get on now.
This would be an appropriate time for Idcc to put out a PR stating that they are in discussions with SAM about 3G licensing. I'm sure it is true and even without a timetable or a prediction, it would meaningfull.
Loop: Thank you for your cogent explanation of why Samsung 3G claims might be delaying the announcement of the final arbitration decision. If, however, the final arbitration decision denies the Samsung allegation that they are covered for 3G under the Nok PLA, what would prevent Samsung from appealing this decision to the courts and further delaying their 3G licencing with Idcc indefinitely?
When an insider sells it is like hitting the stock with a sledgehammer. No matter how durable the stock is, hit it hard enough and often enough and eventually it will crack.
Clarence, I enjoy reading your posts, which I consider intelligent and balanced. I am glad to hear Seligson's remarks. I think we are on the right track and if we stay the course, we will be rewarded. I would appreciate it if management could also stay the course until we reach our destination.
Jimlur: You stated "My best guess is Sammy will be announced the first week of July". Do you still think this is true now that H.C. has sold a large number of shares on 6/30/06? If we should get good news in the next few days I would think our chairman of the board, H.C., should be replaced for having terribly bad business acumen or for not being in the loop regarding the progress of one of the most critical events concerning Idcc. Or perhaps he was in dire need of cash and couldn't wait a few days for Sammy to happen.
As a non techie listening to the pro and con arguments on Qcom and CDMA, common sense tells me that Qcom which did its best to promote CDMA around the world and apparently failed and also does not seem to have the same strength in WCDMA, is about to take it on the chin.
I am less concerned with Bolgiano taking his six million dollars of "salary" now than I was with BM and HC. The latter two have been intimately involved with(or at least keeping up with) the day to day negotiations with Sam, Nok and possibly others. I am assuming that Bolgiano was not in the loop. Anyway you look at it, their interests are NOT aligned with shareholder interests. Campagna has created and presided over a "shareholder be damned" culture. There has got to be a better way of paying these people competitive salaries without increasing the risk to the shareholders. This dumping by Idcc management gives off a bad odor, which is picked up by W.S., oem's, and even by the courts. It lowers the morale of the engineers whose benefits are orders of magnitude less than what they see their managers getting. It does not help Idcc's reputation on the inside or in the outside.
The proceedings of the DE the U.K. courts have the nature of being intellectual and academic. In the real world, Idcc is being screwed on a daily basis by Nok, which is using its immense cash resources to badger and belittle Idcc and ultimately break its will. Suing these nefarious infringers might bring the deliberations of the courts back into the real world.
Regardless of limited windows of time, selling in the A.M. and pumping the stock at the Bear Sterns conference in the P.M. is inappropriate at best. H. C. our COB and has presided over these kinds of bad vibes with W.S. before. IMO if H.C. resigned, we would get back what we lost today and then some.
Regarding Janet:"It's like they said to themselves: "Hey, IDCC has had a nice run and my shares are up about 100% or more, the market is ugly, maybe I should take 10 - 15% of my shares off the table." (These are my words and based on Janet's comments.)" What Janet said makes sense. What she didn't discuss was that the execs could have said to themselves:"Hey a 3G license is around the corner and the shares will get another 30 to 60% run up real soon so I think I'll be a bit more patient before selling."
Spencer You stated:"Merritt says IDCC is awaiting arb decision regarding Samsung
That means they haven't told the panel to hold off on issuing the decision."
I think you're reading too much into that statement. Negotiations between Idcc and Sam on 2G and 3G have UNDOUBTEDLY been going on and are going on now. The ICC may have had a request for a delay in the announcement of the decision until the parties signal that they are ready to have this announcement. In a sense both parties may be waiting for the time to be right for the announcement of the panel decision or perhaps it will not need to be announced if a settlement is agreed to which would be in the interest of both parties.
Loop: I few years ago I posted that MFL seemed to me to stand for Much Future Litigation. Subseqent events with Idcc licensees over the years have born this idea out. At the time I was informed that MFL clauses were a standard feature in patent licenses. I hope this is not so today or in the future. I always wondered about the reasons for HG's being fired. I now believe it was due do his being outmaneuvered by rival attornies. MFL clauses and special conditions(such as "triggers") played no small role in this. He was however representing a much more vulnerable Idcc than is presently the case and this may have had something to due with his agreeing to these weak licenses. I assume that Idcc has learned from HG's mistakes and will not repeat them
Loop: You stated" If I was Samsung, I would be very concerned that IDCC will no longer play the games and enter Judge Ward's court much quicker than in the past. IDCC has the war chest to make an example of a major OEM and Panasonic and LG have recognized the necessity to use IDCC IPR in their standards compliant products. This drag out game is not going to cut it."
There is no question that Sam has delayed and is going to delay as long as possible before signing a license with Idcc for 3G. It has witnessed Nok, Mot, and Ericy profit from this strategy and now it wants to rip off a little extra profit also, even if unethically.
Sam apparently is not afraid of facing triple damages for willfull,intentional,deliberate,premeditated and persistant infringement. The only question now is:WHAT IS IDCC GOING TO DO ABOUT IT?
"Why would he downgrade before it hits his target...or even get close to it?"
Answer is simple. T.C. is scared that Idcc may not have more good news to release before or at the ASM and he wants to hedge his bet a little. If no good news, then the near term price goes down and those interested in the long term can buy in on the dip. With something good due from Samsung very soon, I feel this mitigates the scenario his fear is focusing on.
"Jacobs said the adoption of the WCDMA won't change the company's royalty structure because "WCDMA is basically CDMA" I've been hearing this claim for years. Is it substantially factual? If not, is it partly B.S. or is it totally B.S.? If it is B.S., how can Idcc squelch such claims? How will it affect Idcc's collecting royalties from oem's already paying Qcom? TIA to any techies who can shed some light on this.
What surprises me is that QCOM chose to file against NOK in the U.K., which has a reputation of not being so friendly to patent holders.
Does it irk anyone but me that LG pays us 3G royalties while its competitors including Samsung don't? No level playing field here. Just a Nokia led cabal of infringers.
Simple strategy for NOK in QCOM dispute:
1.Sign 3g license for 3G with IDCC for 1% royalty rate. 2. Wait for QCOM to complain that 1% is "unrealistic" because NOK is using twice as many QCOM patents for 3G as NOK is using IDCC patents. 3. Then NOK states "OK You win. We'll pay you a 2% royalty rate for 3G." End of dispute.
If we really left $100 million on the table to end the 1999 PLA 8 months early, we paid about 12 million per month for this right.Now I wonder how we are going to make use of this expensive time. Also we gave up the "rascal effect". We could have labeled Nok the rascal for its frivolous appeals. Instead, by their PR, they are now labeling us the rascal for "unrealistic" royalty demands, which justify them to litigate further.
If Idcc really did leave $100 million on the table for the first 4 months of 2006 as some posters suggest, just think of what's left on the table for the future. Both nok and idcc are familiar with the facts and each others positions on the 3G dispute. Idcc is the Walmart of IPR and, as such, offers a refreshing opportunity for nok to work with them. With 2G out of the way, we should be able to reach a compromise VERY SOON on 3G.
We need to go after Nok for 3G NOW. The best feature of the 1999 PLA was that the named oem's were assured that if they paid, Nok would also pay. This assurance is now gone. Sam, Mot, and Ericy, will be hesitant to pay unless assured that their chief competitor, Nok, is also paying. The only way we can give this assurance is to take care of business with Nok first. I realise that LG is paying and I'm not sure why. Whatever magic we worked with LG, we'd better work with the others soon. I do, however expect Nok to be the most intransigent.
Nok, by refusing to drop their legal challenges to our 3g IPR,has guaranteed that, before we can license for 3G, we will have to win in court. Meanwhile, Nok is choosing the venues and the details for these challenges. I don't see anything to be gained by delaying the initiation of our own suits against Nok and/or possibly others for 3G infringement. If we fail to do this, we are just making Nok look smart and LG, not so smart, for signing with us.
From NOK PR release today:"This case demonstrates that legal disputes are sometimes necessary in order to lower UNREALISTIC demands." This gratuitous spit in your face type of statement reinforces a reminder to myself that I have pasted on the rim of my computer screen "Nok will litigate in every possible instance" Litigating the appeal of the arbitration decision and the appeal of the appellate decision had put them in an impossible position from which we just extricated them. Its going to be tough to get them in the same kind of position for 3G but I think they'll litigate unless and until we do have them in such a corner. IMO
The appeals court is looking at a rather narrow question: Should the decision of the arbitration panel be overturned? Given the law and precedents in cases like this and the well constructed decision of the lower court, I would imagine that there is a test of some very minimal pertinent reasoning that Nok needs to meet in order to back up their appeal. If they have not met this test then their appeal may be frivolous and sanctions may be in order.
I agree with respect to ericy. The following comment was made by H.G. at the CC on 3/17/03:" we're very focused on what is included, as well as what is not presently included within the scope of the Ericsson and Sony Ericsson license agreements. We have established operating protocols with them. They certainly understand that situation and they understand that InterDigital is going to be around for a while.
But, more importantly, we're developing a framework of trust and a framework of - a relationship framework and the ability to talk through issues, as opposed to what we faced in the past. So we took the clear decision to resolve the issues that were under litigation. Which we had a mandate, we had certain pressures to do that, and we wanted to be able to resolve that issue first.
Having done that, I believe that there is a positive framework going forward. And with a company that has a lot of integrity. And I believe that in this new environment going forward, we will be able to resolve those issues."
Its been over 3 years. HG is gone and we still haven't "resolved those issues" Do we have to wait another 3 years and for WM to also be gone before we sue them for 3G infringement?
Nokia, as the leader a cabal of a small group of large EOM's, has just about achieved its monopolistic goals of freezing out all but the largest of handset manufacturers. Now its goal is to do the same with inventors of technology it uses. Nok has even taken on Qcom. Nok's dispute with Qcom and Idcc is not really about royalty rates but about the right of companies like this to even exist. IMO
The case under advisement by Judge Pumfrey is really about PR. Good PR will not make Idcc and bad PR will not break it. We await news of a new licensee which is where the real substance is. Let's not be taken in by this Nokia feint.
Between 3:12 P.M. and 3:18 P.M. approx. 225,000 shares were sold and the price dropped 56 cents. This means 2 things to me: Institutions were selling and Idcc was letting the price drop. This might mean that Idcc felt constrained from buying because of impending good news or that they just decided to take the afternoon off.