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Sonic:… You asked“I don't want to start a big mgmt bashing contest but what happens if we go all of 2004 w/o any (more) new licensees when mgmt has told us to expect them? “
IMO, failure to achieve anymore significant licensees in 2004 has already been built into the price of the stock. Any new licensee would be a pleasant surprise and would shoot the price up a bit. In the end it probably doesn't matter much as the arbitration is really what governs this stock. Otherwise the price will remain stable as we hold our breath until the decision of the arb panel comes down.
The loss to Mot was pivotal in the history of Idcc. The strategy of management shifted from an all out fight for success to a more conservative plan to keep the ship afloat while pumping small and partial successes into big ones with a public poorly informed about the details. It is time now to forget about the Mot debacle and to vigorously defend our substantial IPR from cynical infringers who figure that we are still too paralyzed by Mot to do that. Perhaps a win against Nok can free us from the ghost of Mot.
Jim:"The question here is a Sony/Ericsson license the same thing as a ERICY license?" IMO the panel has gotten past the issue of whether S/E is a trigger. Otherwise why would they be asking to see documents from the Ericy case? I believe they are into deciding the fairness of the royalty rate and the time period for which it should be applied.
Jim, even in the most unlikely event that we lose to Nok, it would not be the end. Idcc would state the truth i.e. that 3G is its real future and then they would initiate infringement suits over WCDMA, which probably should have been done before anyway. In a way it might be good. Management would be forced to take a few risks to improve the stock price just as the shareholders, who have been accepting risks all along. I believe our claims in WCDMA are stronger than those in 2G and it is high time that we put that to the test. Lets win and get rich or lose and get back to our lives.
3GDollars:
"Lucent Technologies Inc. appears to be closing in on a lucrative 3G network contract with Cingular Wireless, a deal that would mark its first commercial UMTS (Universal Mobile Telecommunications System) win to date."
If Lucent gets this deal and Idcc doesn't add WCDMA to the current Lucent suit, it will seem to be an announcement to the world that we are unsure of our WCDMA patents. I don't see how we can afford not to sue them and still expect other prospective licensees to sign .
ELI: This is what many of us have been thinking. At the time of the Ericy settlement, Howard lauded Ericy as an ethical company (or words to that affect). I have always thought that an agreement was in place for a 3G licence with Ericy to take effect if and when Ericy could be shown to be a trigger for Nok. This would answer a lot of questions.
Buyers are just starting to get interested and finding very little for sale.
Idcc share price is languishing for the wrong reason IMO. Investors are looking at a potentially poor Q3 report. Q3, is not the significant event for this company. What is much more important is the arbitration decision being reported in Q1 2005. After the Q3 report, whether good or poor, is history, investors will focus on the potentially favorable arbitration decision and this should reinvigorate the stock.
With strong IPR, you do an SOS on your OEM's. You Sign em or Sue em. This waiting is for the birds. Its a win-lose situation. Management wins. The shareholders lose.
Danny: you said "my lifestyle won't be affected if it goes to zero. Nor will it change appreciably if the price moves into triple digits which I strongly believe will happen within five years." There are those here whose lifestyle and that of their family will indeed change if the price moves into triple digits and that is why they are accepting a risk which you understandably prefer not to take. That is also why they get more upset when management takes actions which mitigate against the upward movement of the price of the stock. We can have different perspectives and both be right.
Ed is smart and knowledgeable with lots to contribute and with a good sense of humor and a touch of sadism. I hopes he continues to post, dropping the sadistic mask and letting the good guy under the mask come out.
Let's assume that the arb panel decides that SN/E is a trigger for Nok and sets a rate for Nok to pay for 2G. What is to prevent SN/E from figuring that they did pretty well not paying IDCC for 2G for over a decade, and therefore why wouldn't they decline to pay Idcc for 3G even though they would
know(after the arb decision) that if SN/E paid for 3G, they would probably be a trigger for Nok to pay for 3G. Then SN/E could let Idcc sue them over 3G the way they made Idcc sue them for 2G in a protracted law suit. If that happened, Nok and Sam would say to Idcc that no trigger for 3G has materialized and they won't pay until one does. This board has been saying that the reason SN/E won't sign for 3G with Idcc at this time is, because in doing so, they would be giving Nok an unfair competitive edge since they would be paying for 3G when Nok wasn't paying. However let's look at the possibility that SN/E might prefer not paying regardless of whether Nok pays or doesn't pay.
The countdown ia already on. It is now about 5 months till the evidentiary hearing. I have waited 5 years. I can wait another 5 months. After the arbitration with nok is over, it won't have mattered much whether we made a cent or a nickel this quarter or next quarter for that matter.
Spencer: I believe that 300,000 or more shares were traded in the hour between 2:30 and 3:30. The price went a few cents below 18 and then a few cents above and then, when it touched 18 again, it turned down without interruption. The volume at first was medium and then it really picked up without too much attention to the price. Someone(or more than one) was selling a large amount of shares at 18 or below. This selling continued until a few minutes before the close.
I also noticed the interesting trading pattern for Idcc on Friday. Trading between 9:30 and 2:30 was on low volume and in a narrow range between 18 and 18.40. Then at 2:30 it slipped below 18.00 and in one hour, on high volume,it dropped to 17.40.
I figure four possible reasons:
1.stop loss selling at 18.00 as you suggested
2.margin selling
3.leaking of info about a negative report on Monday.
4. one large seller got anxious and decided to dump before the report
Of the four, I consider #1. the most probable.
Amwonderful: I have found that when the market goes up or down just prior to an announcement and I have assummed that the market knows "before I do" I'm usually wrong. This time I gambled that the stock fell out of bed the last two days because the general market was down and because longs in Idcc had a serious case of the jitters. I hope I'm right. We'll see on Monday. Even if I'm wrong, I feel that this stock will work out ok in the end. IMHO
I'm sure you agree that whether Idcc earns 7 cents or 2 cents for Q2 does not really impact its future value. I felt that the selloff of Idcc today was overdone and that this was a difficult opportunity to pass up. A while ago I resolved not to add to my already large holdings but I can't avoid the temptation when the market seems to throw the shares out the window. This thing has to come to a head soon or I really will be betting the farm. Incidentally, I miss Mickey Britt and I truly have empathy and understanding of his situation.
L2V and dws ditto for me. EOM
I suspect that before Idcc is able to sign licensees to convenience licenses, including 3G, at meaningful rates, they are going to have to test WCDMA IPR in court. Why not initiate suit now against LG for infringement. The case will take several years and not be resolved until after Nok arbitration and the Lu suit are finished. This way we will have a head start and show that we mean to protect our IPR. I doubt that LG will pay for 3G regardless of the outcome of the Nok arbitration and the Lu case. If we win these two, it just might induce LG to settle. We're approaching D day. Sooner or later, we will have to take a risk and assert ourselves and it might well be the time to start the process now.
DNC is over and no serious disturbance. The RNC is soon and if it is also uneventful, that should help the general market and by extension IDCC. If a Muslim force fights the insurgents in Iraq, that would also help. Add that to a good earnings report and another licensee and it would make a nice brew.
A more upbeat scenario: In the short term, when we get over the DNC by next Friday and then the RNC by next month without any "incidents", things will look up a bit.In the longer term, Bush will probably win and after the election we can see a nice close to 2004.
Nok is writing the book on how to circumvent a valid contract by raising spurious issues and using delaying tactics in arbitration. Other lawyers will study this and arbitration between large companies will not be quite the same.
3G: I doubt that IDCC would have to pay Ericy more than the rate they are paying us for IPR and since this is below its real market value, then IDCC would be receiving some value from this option.
The analogy between IBM's former problems and Nok's current ones goes only so far. Technology in P.C. hardware was not changing as fast as handset technology is now. This gives Nok, with its huge assets, an opportunity to take some risks and get out in front of its competitors with cutting edge technology.
Nok is a victim of its own success. They got too fat and conservative in a rapidly changing market. Now NOK has to go back to being an innovator and a risk taker. They are well positioned to reframe their strategy considering their market share, their cash position, and their organization.
Nok has to now play catch up. To do this they can not rely on shifting gears in style alone. They have to be at the forefront with 3G technology. For relatively small sums of money(considering the scale of Nok revenues), it is in their interests to have Idcc as a value added partner rather than an opponent.
P.S. thank you TC for your confidence in Idcc and having the courage to state publicly what you think.
Old Dog: What is holding up the negotiations is that both sides are confident. It is in Nok's interest to drag this out and they have been doing so. The evidentiary hearing is scheduled for less than 6 months from now and it seems that we are on track to get a good resolution, after which the dominoes should start falling into place. This fight with Nok is like a war. We are the soldiers and management are the officers. We feel loyal to the company and our moral would be higher if our officers showed their loyalty also, especially right before the big battle.
Loop: Law is a kind of glue for society and you are a kind of glue for this board. I am sorry for the loss of your friend,RTD. I hope that as time passes, you visit us now and then.
Osoesq: I have wondered whether NOK's tactics in stalling the arbitration process might go a long way towards setting an example, which could undermine the concept of arbitration. Why resort to arbitration if the process can be delayed using strategies similiar to those used in court cases ? "An arbitration clause is usually added to a contract to allow for "expeditious" resolution of disputes."
What is hurting Idcc now is the perception on the street that Idcc has to clear a major hurdle, the Nok arbitration, which if it fails to do, it may be consigned to the scrap heap of history. Neither Oracle nor Qualcom face this problem so their insider sales are not so damaging. When Idcc has insider sales, whether in small or large quantities, this stimulates the street to reconsider the risks that Idcc might fail to clear this hurdle. This discourages buyers and encourages sellers, especially short sellers. Management is aware of this and may, nevertheless, if history is any guide, sell again before the resolution of arbitration. This does not exactly accomplish the "aligning of interests" of management and shareholders that Campagna spoke of recently. I feel the odds are greatly in our favor that we will pass the Nok test and I am holding, putting my entire financial future and that of my family on the line. I would like Idcc management to display the same confidance that I have.
Management's selling at this time seems inconsistant with Idcc's business plan. Prospective licensees are holding back because of uncertainty about the outcome of the arbitration with Nokia. By selling now, Idcc management is signalling that they too are uncertain about the results of this arbitration. This will discourage at least some of the prospective licensees from signing up until after the arbitration is resolved. This could put pressure on Idcc to settle the arbitration on less favorable terms before the panel makes its decision.
The potential for abuse when managers of public companies sell their shares is great. This is the reason that the SEC has rules for insider trading. The shareholders could profit from insider trading in the following way. Before insiders dump their stock on the open market, the company would have the option to have buy the stock at a price equal to the average price for the preceding year. If an independant management committee did not want to excercise this option, then the stock could be sold on the open market. This would tend eliminate management's manipulating the price in the weeks before they sold and give the public an idea of management's appraisal of the value of the stock by their decision to buy the stock or not.
It was a nice courtesy to Merritt that Campagna allowed him to sell first. They both understood that this would depress the stock price. This saved Merritt almost $20,000. When Campagna sold, he received less for his shares since the price had already been lowered because of Merritt's sale. I'm sure that next time Merritt will return the compliment and let his boss go first. Too bad the public isn't in a position to receive such gentlemanly courtesy. I suppose the public should be grateful that we can buy these guy's stock with our hard earned money. Perhaps if they bot some stock with their hard earned money, the interests of management and shareholders would "be better aligned" as Campagna says.
Idcc is just a crap shoot until we license 3G. Merritt doesn't want to play crap with his assets. Those of us who do want to shoot crap should just sit there until we make our point.(or crap out)Merritt's sale today doesn't affect this one way or the other. Meanwhile we shouldn't allow Idcc to take money off the table by granting more options and RSU's until the game is over.
Setting the hearing date for the Samsung arbitration at the end of February does not mean that the Samsung panel will hand down their decision at the end of February. They could wait until the Nok arbitration panel hands down its decision before they make theirs.
Nok has signed a license to use Idcc's IPR at a rate to be determined. They say the validity of the patents is not being challenged. The two issues remaining are whether Ericy is a trigger and what the rate should be. I fail to see how the unchallenged validity could possibly be relevant to the arbitration proceedings. What am I missing here?
The main plus for Idcc in 2G was in having the experience of making all those mistakes in licensing, the repetition of which they will now know how to avoid for 3G. Idcc has accumulated assets including IPR, people, and cash and they now know how to play the game. The Sanyo license is great because it is a model of where to go in the future.
The Nok license was a challenge. The challenge was that Idcc had to sign just one of the named triggers, not all of them, and then Nok would pay the same rate. We thought we met the challenge with the Ericy signing. The arbitrators will make the final decision on that. If the arbitrators decide against us, we should have lawsuits prepared, involving at least one more of the other named triggers, all of whom are infringing.They should be ready to be put into effect as soon as we hear an adverse decision from the arbitrators. We have already initiated a suit against Lucent and this was a good move. If we have the IPR we seem to have, we should win. In the meantime, we should keep our cash reserves high to support the legal costs of these critical suits.
Recognition of the risks of a possible loss to Nok in the current arbitration has been recently heightened, rightly or wrongly, by the adverse decision of judge Lynn to reverse vacatur. A suit against another major infringing OEM(successful conclusion to which would also act as a trigger for the Nok license) would have the affect of diminishing the importance of a loss to Nok. Attention would be then rightfully deflected from the short term losses in 2G to the potential long term gains in 2G and 3G. This is already the case in the suit against Lucent but would be enhanced by an additional suit.
Judges take pride in not having their important decisions reversed by appeals courts. In the Nok arbitration, hundreds of millions of dollars are involved. Nok has asserted that the arbitration is linked to and dependent on rulings and documents from the Ericy case. True or not, Nok was going to appeal an adverse decision. The arbitrators were probably not going to make a decision until the appeal was resolved. However, assuming the arbitrators, not having seen these documents, did find in favor of Idcc and afterwards Nok won the appeal, it would not only be a serious blow to the prestige of the judge, but Nok might even try to appeal the arbitrator's decision because of the "unusual situation". It is really best for Idcc to get these rulings and documents out on the table for all to see.