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stockguy....Who cares? Anyone who has believed in this company and risked a substantial amount of their assets over time, I have respect for. Anyone else, as far as I'm concerned, just got lucky. Luck, in the long term, is not something to be relied upon in the endeavor to build capital.
Post.....I don't think too many. The continuous over-sized short position has to represent a major player (hedge fund or other enemy). What really frosts me is that our markets have been so compromised that it allows the big negative bets that have gone awry to be mitigated by the ability to cover with minimal loss. Pre-2007, these shorts would be put out of business. Not now.
Anyone notice?... today's release refers to a "possible sale or other transaction". The text in the original "strategic alternatives" announcement included possible sale of patents. So, I guess it is going to be an outright buyout or merger. Wow!
Tough to spin something negatively when there's nothing to spin! To me looks like the swing monkeys are SOL tomorrow.
situps....What a ridiculously simplistic and naive view of today's development. Management, in putting the company up for sale, made a momentous and, IMO, smart decision. Now you want us to believe that they and their 2 advisors are so stupid as to not think this through before acting?
SONS....No I am not saying that, necessarily. I'm saying that, as usual, those who want the stock to go down will spin the report and CC to facilitate a pull back. Bottom line, it really doesn't matter as I believe the end game is nigh.
JMS...totally agree with your assessment of earnings and resulting stock action. eom.
Joel (OT)...Just curious----do you ever sleep? eom.
Joel...You make some good points and, although we don't agree on the math or the upper limit of IDCC's valuation, you are right: Those options are a 10-bagger at a takeout price of $120. ( If it happens in that time frame ).
Even though I have "learned my lesson" many times over when it comes to long options (as opposed to written), I'm going to take a serious look at this.
Thanks and Good Luck.
Joel... I have given you the benefit of doubt, until now. If you made a math mistake, admit it. Are you related to NJ?
OT (I suppose). I know we are all somewhat intoxicated by the latest developments in IDCC but there is a bigger issue out there. Anyone interested in a fairly cogent explanation of one of the main, contributing factors to the shakiness of the global financial situation, spend some time on this:
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=21642:economic-rape-of-europe-nearly-complete-part-i&catid=45:international-commentary&Itemid=133
Sloane (OT)...I am afraid I don't understand your post. Is there a message I am missing?
jmspaesq....I thought the same thing. Without looking any further, just a cursory glance at the size of the graphic representation vis-a vis QCOM alone is not commensurate with the "small number" characterization. Not only that, but with IDCC having the highest "relevance" rating, it would seem that having a few less patents would be more than compensated for, in an analysis of the potential for "economic returns".
I feel pretty good about our base valuation being $5B (4.5 plus .5 in cash).
To me the greatest thing about the recent development is that no longer do we have to try to value IDCC on DCFs or who's going to license and who isn't and even what the outcome of the CAFC will be. These things are now irrelevant. It is all about the value of patents as they relate to the net value to the eventual owner vis-a-vis the value of the patents of their respective adversaries.
The really good thing about the recent development is that all the ways that I (and I'm sure many others here) have attempted to value this company in the past are no longer relevant.
We don't have to try to guess DCFs; we don't have to worry about who is going to sign and who isn't; we don't even have to worry about the outcome at the CAFC. It is now all about the value that our patents bring to the BIG players that have to settle up with each other, commensurate with the net patent position that they, individually, possess.
I agree with "The Count's" analysis: $5B is the baseline valuation. (Although I come up with $110 ps with the same valuation). Ultimately, I believe it will be higher than that. JMO.
Jim Lur and other longtimers......Hope I'm not premature but I think the age-old question of "geniuses vs. chumps" is in the process of being answered. Go IDCC.
ifish!....I believe you are thinking right but I would definitely add the shorts to the list of buyers. As "clever" as they are, I don't think they have allowed for this eventuality. MO
felix....Small and big brokerages issue margin calls to their clients (small and big) if their accounts fall below certain equity requirements. These margin calls apply to long and short accounts. It has been a while since I have been involved in the business, but it goes something like this: Brokerages issue "house" calls if an account falls below a certain percentage equity. Typically it is (it does vary) around 35-40% equity. A call mandated by the NYSE or other "authority" will issue (again it varies) around 20% equity. In both cases, cash or equity (stock) must be deposited to the account to bring the net equity back above the minimum. If this is not done, then stock must be sold (in the case of long accounts) or bought (in the case of short accounts) to raise the net equity above the minimum requirements. I hope this helps.
WW...Calls come to shorts indeed. And my experience is that they go out to brokers at 2:30. Beautiful!
Loop..... You have hit the nail squarely on the head.
The end result is that the portfolios of the smaller inventor companies have another method of monetizing their inventions. They can forget about trying to license with each big player and sell their inventions to the big boys who need ammo to negotiate cross licenses with other big boys. The industry now has experience in the evaluating process which can be expanded upon to produce a value for the existing patent portfolios of companies without considering their ability to license because the ability to use and license the portfolio is viewed in the strength of the purchasing company. The actuaries can grind out the numbers and couple them with the cash, assets and engineering talent to reach a purchase price. As I have said before, Nortel may have created rock star status for some of the more gifted engineers and they may end negotiating their own deals with the purchaser.
Hopjokey......There are so many ways these shorts could have been covered. I'd like to believe that they simply were "smart" enough to cover in the midst of heavy volume. But, I don't.
Much more likely, IMO, they:
1) bought deep-in the-money calls from an institutional seller who had stock to deliver. There is no way to figure this out, of course. Add to this the fact that there are options transacted between large entities that never see the light of listing on exchanges.
2) Netted out a large long position that they also possessed.
3) Could have passed the short position to another entity on the last day of the reporting period. The new "owner" of the short position would have the 3 day settlement before it would become evident that the position did not decrease.
I have no idea how it happened but I do know that there are so many loopholes and ways around being caught in a short squeeze. It is sad that those who play by the rules have to hope that "they" make a mistake. As long as they don't err, they will win every time, IMO.
AMR....Agree on all points. You seem so calm about it!
Italy Requires Short Sellers to disclose Positions. Also limits CDS's to ownership of underlying securities. Looks like they "get it". I wonder when we will?
http://www.bloomberg.com/news/2011-07-10/consob-may-ban-restrict-naked-short-selling-at-meeting-sunday-night.html
poche....No doubt about it. Even if was adhered to, it's still an unfair tool for those feeding off the (broken) system. IMO.
dmiller......Where have you been? I thought that most on this board now understand pretty much how this can happen. Put together the large, long-standing short position, the ability to short on downticks, collusion between market-makers and the ability to short unborrowed shares (as long as they are covered in T+3) and it takes no imagination to see how this happens.
yes. That would be nice! eom.
jmpsaesq (OT)...No, not po'd at you, or anyone for that matter. EOM.
OD.. On the surface, I would have to agree. However, my experience is that big moves are initiated by unknown and unforeseen circumstances. When we finally get the decision, we'll see. I am more interested in learning what transpired in the Nortel bidding process. When the deal is finalized (which I believe happened today) the revelations of the participants' maneuvers during the bidding process will shed more light on the value of IDCC's IPR than the resolution of a drawn-out legal battle with a lost leader. JMO.
jmspaesq... I apologize for my tardy response. I have been trying to figure out a way to respond to you without infringing on the board's mandate to not engage in personal attacks.
My original post was addressed to the moderators of the board. I was hoping for a response from them, not you. I don't care if NJ has been to 100 CAFC hearings, his characterization of these esteemed judges was denigrating and disrespectful. Anyone who has had any experience in the court system would, after listening to a replay of this hearing, come to the conclusion that IDCC came away with the upper hand.
This board has not heard a peep from NJ for quite a while. IMO, the reason is he, if we can believe his rantings about his position, was blown out of the stock when it went below $38 (per his declaration on another board). I.e. he was margined to take advantage of the rise in the stock price which would naturally follow due to his ingenious and novel analysis of the value of IDCC.
So, my point is this: are his self-serving, posts (granted, founded in a correct analysis of the valuation of IDCC) worthy of being highlighted as something we (probably the most objective and learned group of investors on the web) are willing to put forth as reasons to be invested in IDCC. IMO, I don't think so.
my3s.....Agreed. Their preoccupation with avoiding recognition of IDCC was one of the contributing factors to their downfall. What NOK has wrought upon themselves reminds me of what happened to WANG and others in the early 80's. It is becoming more and more obvious that it is NOT all about NOK. Maybe BM knows what he is talking about!
Gamco (OT)...That would be a good solution. IMO.
To the moderators....With all of the new developments, is it not time to review the relevance and appropriateness of some of the "sticky notes" on this board? I for one am, and have been since the original posting, offended and embarrassed by NJ's "analysis" of the judges' behavior in the oral arguments. The judges at the CAFC are intelligent, experienced and incorruptible. The analysis provided in this post treats them as if they are lowly subjects in some sort of Pavlovian experiment. Although it is unlikely that any of them would visit this board, I believe that the weight given to this irresponsible "analysis" would test even the most unbiased and resolute adjudicators. JMO.
postyle...could very well be. I am not a TA expert. When one owns companies for long term gains (like for example 17 years) it behooves one to not pay too much attention to TA. But I do give some credence to repeated patterns. It would be a very unusual circumstance for me to make an investment decision based on TA.
dmiller....I agree. Absent any news or further clarity as to comparative value vis-a-vis the Nortel auction, it will fill. IMO.
dndodd...Thanks for that. I am in 100% agreement with the author. And, IDCC is in the middle of it.
OD....precisely right, IMO. Every attempt at a comparison that I have seen doesn't even fit into the apples- and-oranges category. We are talking fruits vs. vegetables. If the LTE and foundational 2 and 3G patents were identified then we might be back to apples and oranges. Only one who is well-versed in the nature, content and applicability of BOTH portfolios could make a comparison. If there is such a person, he/she does not frequent this board, I am sure.
dmiller...Yeah. In this case it depends on how well the shorts have hedged themselves. If they have miscalculated, there may not be much of a pullback. IMO.
Sooo.....Nortel patents are worth more than double what Bill Merritt thought!
havana.."Because they can" is absolutely right. Who knows how many phantom SPRD shares are out there? Pathetic.
nicmar (OT).....Not that it is any of your business, but the reason I mentioned the price at which I bought some of my shares was to underscore the length of time I have been invested. I think if you reread my post you will understand. I'm not a chest-thumper.