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IMO dividends aren't coming anytime soon
I think having a regular annual dividend in the neighborhood of $1 share would have a positive effect on the stock price. However there are dozens of things that would help the stock price that I think are highly unlikely, so I don't know what it matters. Sign Nokia, fill in the framework with Ericy, resign LG at something close to the current rates and IDCC will soar. Don't and it won't. Period.
Round up the usual suspects.
It's the ignorant, incompetent analysts, it’s the shorts, the market maker, somebody is cheating the system because all us IDCC shareholders can’t be wrong. We can lay out the case in spades. Therefore there is a stealth axis of evil working behind the scenes holding us down. NOT.
As I’ve told my children since they were little, life isn’t fair. Deal with what is, and don’t waste time and energy kvetching over unfairness.
Do I believe IDCC is significantly undervalued right now? Hell yes. I can make a very good case on fundamentals for the share price to be over $40 right now. However the market has spoken. I’ve watched this stock obsessively for the last ten years. In my opinion, the market is focused on licensing the top tier manufacturers. Until we get better visibility on 3G and LTE revenues from them for the future, the share price will remain in the $24-$30 range. Please don’t try to debate me. We’ve all seen the arguments ad nauseam, and I agree with many of them. You can convince me so that I make Mickey Britt sound bearish, but it doesn’t matter. The investor out there are not willing to pay over $30 a share, and the only reason I can come up with is uncertainty over Nokia signing (not only how much, but WHEN) and the renewal of LG, along with concern over how IDCC is going to use all that cash. If you feel very confident about IDCCs execution, continue to take advantage of these cheap prices, because if IDCC does execute successfully (at rates similar to LG’s agreement), I can easily see the price at double current levels in short order. However, IDCC wasn’t willing to pay $20 a share last year or $25-$28 now and investors get skittish around $28. Minor surprises like $0.20 per share just isn’t going to launch the rocketship. Unless there is a breakthrough with Nokia, I will be pleasantly shocked if LG resigns by December 31. The resigning of Kyocera was a very positive development, and the incentive of prepayment discounts do provide some hope, but given the $285 million they’ve paid over the last five years, I expect LG to be cautious about renewing. If neither Nokia or LG is signed on Jan 2, 2011, I can’t see the market valuing IDCC over $30. I am still very comfortable with my long term investment, but the longer it takes, the tougher it gets to collect past infringement and to sign other infringers.
It’s about IDCC monetizing its IP with the big boys. Until that happens, the market is going to have a low valuation on IDCC. I ain’t happy about it, but that is the way it is. No analyst, PRs, conference call pizzazz or any other window dressing is going to change that.
Deleting posts
Speaking only for myself, I do not have the time nor the inclination to be rigorously consistent in deleting OT posts. Here are some of the deciding factors.
Is it a fresh post? If not, and if it hasn't generated additional current posts, then I don't bother to delete it.
Is it a controversial post? If so, it will likely start a lot of bickering and I'll drop it.
Are there posts back and forth between folks that like to debate? If so, I'll delete them.
Is the post more about criticizing someone then it is about IDCC? If so, I'll delete it even if the poster tries to launder it by adding "socially redeeming content".
If it is the weekend and the post is interesting or entertaining, then I will leave it.
I will delete posts about personal trades or other stocks. That can snowball quickly.
I will not delete posts because they are positive, negative, or because the poster has an agenda. That is what I consider censorship. Deleting OT, insults and trades is housecleaning.
All the above is quite subjective. While no one likes censorship, weeding out posts that have no relevance to IDCC makes this board a much better resource. I will continue for as long as Jim feels I'm handling the responsibility appropriately. So no, we are not consistent with the deletions as we have lives and the purpose of the task is to make this a better board, not be perfect moderators.
Again, this is just me. I have not discussed it with any of the other moderators. I will say that I have looked at many of the posts that the other moderators have deleted and I haven't seen any that I've been tempted to restore.
Posters are not required to own IDCC
This is not a cheerleading board for IDCC where everyone has to prove they are rooting for IDCC in order to participate. This board is for investors to learn about IDCC to decide whether they want to buy or sell IDCC stock. Posts need to be on topic, avoid vulgarity and personal attacks. It's amusing how many of the same folks that like to scream censorship are the first ones to try and shout down "evil" posters.
Please respond to the content of posts with facts or opinions about the underlying assumptions or the logic that leads from the assumptions to the conclusions. Whether someone owns IDCC, no longer owns IDCC, never owned IDCC or, horrors, is short IDCC is not determinative of the usefulness of the post. There are other boards where you can name call, assinate character and otherwise focus on irrelevant issues to avoid dealing with the substance.
Frank
If anyone wants a dividend, here's what you do.
Sell 4% of you shares. You collect 4% in cash. Your holding is now worth 96% of what it was, however if IDCC paid out a one time 4% dividend, the stock price would fall 4% (all other things being equal), so it's just the same. In addition, you would not owe taxes on the whole 4% you received, but only the gain portion of the sale. You can do this at whatever % you like and as often as you like.
Printing more shares does not increase the market cap. Therefore the stock price would fall to make your total holdings worth the same amount (all other things being equal). This is the same problem that comes with stock option grants - dilution. If your theory was correct, why not do a 2:1 stock split and we all double our money!!! HOZAAA, Happy Days are Here Again...
The arguments for and against a dividend have been made. Here’s the best one (okay, mine) if anyone is interested, but rehashing the arguments here is not going to accomplish anything.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46100965
If you feel strongly about it, contact the company and let them know. Let's keep the focus here on our expectations for IDCCs future so we can make intelligent investment decisions instead of repeated debates about management decisions that we can't affect. If you really want a dividend, I've shown you how to get it, so do it yourself and forget about getting management to do it.
My condolences to Amy
and the rest of Raymond's friends and family.
Raymond apparently made some great ribs, and he offered to send me some many years ago. I told him that I'd place a nice big order when IDCC hit 40. Alas, I will never get the chance to sample those ribs and Raymond never got to see IDCC fulfill our expectations.
Raymond was a good ol' poop and he will be missed.
Frank
What is your point?
Insider trading does happen. It is not impossible that someone at IDCC leaked about earnings. Therefore this is an important issue for IDCC stockholders and should be looked into. Bull.
I've followed IDCC closely for over a decade. There have been many significant events and surprise announcements. The trading prior to them has been remarkable for the lack of significant volume or volitility. IDCC has too small a market cap, float and volume for a big player to make significant money on inside information without it being fairly easy to detect. So therefore I do not see leaks of insider information being a concern at IDCC. Is it possible someone at IDCC gives a wink and a nod to a friend? Sure, but it would not be for many shares. Is it more probable that the sensitive information is kept confidential on a need to know basis, and that employees understand that there job is at risk if they violate the rules, not to mention potential federal prosecution, so given the relatively small profit that can be made without a high risk of detection, and the large risk one faces if caught, it is doubtful that there is any significant leak at IDCC.
And if the person considering taking that risk is aware of the IHub board, where everything about this company is analyzed to death, they would have to be fairly stupid to try. Hell, look at how much time we've wasted looking at something with less evidence than the "world is flat" theory.
MJP(please get a)LIFE11
I see nothing unusual in IDCCs trading before the earnings were released. The stock had been performing very well for weeks based in part on the knowledge that revenues were going to be very good. So the blowout quarter was already factored into the price. The stock had risen up to the pre ITC level and the momentum had died out. If the stock had suddenly fallen 10% or more on heavy volume right before the earnings release, you might have a tiny indication that there might be an issue.
Here's your problem. You KNOW IDCC is a great company. You KNOW IDCC is severely undervalued. You KNOW that the only way the stock price is at such low levels is due to some sort of evil manipulation by shorts, hedge funds, communists, Nokia or other members of the axis of evil. Therefore you must find proof of this great conspiricy to validate your world view.
Here's a different approach for you to try. Start with the facts and work towards a conclusion, instead of starting with the answer then looking for facts (or grasping at straws) that support what you KNOW is true.
Davenport research report
My thanks to Jim for getting the report to post here. It is important for IDCC investors to know what the analysts are thinking. I appreciate those who pointed out specific points where Mr. Skeels' opinion appears to be a "worst case" perspective, such as no revenue increases from this year to next and using the Q1 expenses that included a surge in legal expenses that are unlikely to remain that high.
His opinion seems to be a reflection of the street's perception of IDCC, especially the lack of revenues from LG after 2010. I do believe that IDCC is working hard on LG and Nokia. While I am far more optimistic about their success in getting contracts done than the share price indicates the street is, signing LG is a major concern of mine.
Unfortunately we also have to read the "see no evil, hear no evil and speak no evil" posters who add nothing and just malign the analyst who shares his report for free, courtesy of Jim's work. Let's see AMCSATX's articulate rebuttal...
very conservative Yes, it is conservative. Clients don't get too upset if you underestimate, but if you throw out overly optimistic projections, they can get burned and angry. He's not out to pump up the fans, but to advise his clients.
very timidly written What has management done in the past decade that would justify someone being outspoken about imminent good news?
no ballz Crude and insulting. I believe his clients are looking for considered, conservative opinions for investments, not speculative high risk-high return calls. If you want that type of maniacal analysis, watch Cramer.
DavenPuss Sooo clever. He posts his opinions with his name on them. He will be judged on his history. That's a lot ballsier then making critical generalities and sophomoric insults anonymously. Other than the analyst that had a hissy fit and put a $13 price target when IDCC was in the high teens, it's hard to find overly conservative reports from the past on IDCC.
What is the point of your post? Is it to shame Mr. Skeels? To discourage posting any non-positive information on the board? To me, it adds nothing and has the potential to limit future access to important information.
Concern about LG
I hope this answers all the questions/comments.
My post was in reply to the comment I printed in Italics...
LG signed w/o litigation and Pnokio before why wouldn't they do so again?
I've struggled to understand why IDCC's shareprice is so low in light of the fundamentals. The explanation I came up with is that the broader market is not convinced that IDCC's earnings in the future will continue at current levels and increase. What could cause them to go down? Not resigning licenses is the only reasonable explanation I can come up with. IF Kyocera had resigned and IDCC had signed Nokia, I would not be concerned about LG resigning. Given IDCC's problem signing contracts, I do have a concern. Samsung signed, but it was with the threat of an ITC decision in a few days. Without a motivating factor, why would LG renew?
I do realize that the contract is not up for renewal till the end of the year, so I would not expect a renewal yet, but looking forward I feel there is a risk of LG not resigning, and that would be a big blow to the fundamentals. The market looks ahead, and when we talk about IDCC future earnings are an important factor. Yet considering the risk of not resigning a current licensee is premature and should not be brought up? Especially when someone has asked "why wouldn't they do it again?". I just tried to answer.
My3, sorry I didn't rush to respond to you.
Net, they come in and post the sky is falling and they are so concerned and then they lite out like a thief.
I am a bit busy and I check out the board before I head off to bed. I didn't post the sky is falling, I posted that I am concerned about LG resigning. My future will be shaped by how my investments perform. My portfolio contains one stock, IDCC. I can't afford to have blind faith. I look for realistic expectations.
I gave my reasons for my concerns. I didn't see any responses that persuaded me that LG resigning should not be a concern. If it wasn't for the referenced post, I probably would not replied as I had little to add to my original post, I just expanded a bit. Obviously many disagree with my opinion and that's fine. I don't need to convince anyone. I share my opinion and I'm interested in reading other's thoughts to help me better understand my investment in IDCC. If I don't have anything new or constructive to add, I don't see the need to post. However I don't want to be characterized as a bash and run poster.
There are some encouraging signs. I like the things going on since Terry Clontz has replaced Harry. The recent signing of a new license, the addition of the new board member, the increased communication and the removal of the poison pill are all positive developments. I never said that IDCC wouldn't resign LG, I just said I was concerned.
Hopefully this answered the issues with my ost. I don't have much to add, so I will likely let any who reply to this have the last word. It's just my opinion and if you don't agree, that's fine. I try not to clog up the board too often with my ramblings as I do like to fully explain myself and my posts can be too long for most to read. I doubt more than a few have read this full post.
Good night all. I hope I wake up to news of an LG renewal tomorrow.
Frank
LG is a big issue for me
LG signed w/o litigation and Pnokio before why wouldn't they do so again?
Because the first time they thought they were getting a good rate by signing early, anticipating their increasing market share, and felt that the others would sign soon. Now that they've seen others with bigger market share not paying for the five years that they shelled out almost $300 million for, they may rethink the wisdom of paying until they see that their competitors are bearing the same cost. Kyocera signed before, and they're renewel is almost a year overdue.
IMO, there is no conspiracy holding down the price, it is the possibility of revenue declining as LG and others don't renew and MEN continue to stall.
Thank you Mr. Lurgio
I appreciate your efforts over the decade I've been invested in IDCC. You created multiple boards where IDCC investors and those interested in investing could follow IDCC closely. News is published instantly and analyzed by folks with the knowledge and background to illuminate it for everyone. You did your best to encourage all points of view, stressing accurate information over any agenda. You brought analyst insight to this board. You worked long and hard for the people here. I am truly thankful to you for that effort and sacrifice. When MG left IDCC and the share price went from 9 to 6 in minutes, being able to come to the board and see that there was no real crisis with IDCC, just a panicky market overreaction, allowed me to push all in at that time. I would've never been able to pull the trigger if it weren't for the depth and breadth of coverage that your boards have. The research and analysis at that time gave me the confidence to take advantage of the panic and buy.
While I am saddened by your leaving as moderator, it would be selfish of me to ask you to stay. You get heaps of criticism and very little support. You've asked many people politely to obey the rules, but most feel justified to continue with their pointless bickering, baiting and name calling and others feel compelled to tell you what you're doing wrong. Thank you for your service to me and thousands of other investors over the long years. If you ever, ever need help please contact me. I owe you and would love an opportunity to give a little back.
Frank
Great work Ronny, thanks to you and
Data and Olddog. You three are all first ballot Hall of Fame posters that have helped me immensely in understanding IDCC. Smart, honest, informed and willing to live with the unwarranted criticism that comes when posting on this board. I sincerely thank all who contribute substance and I also thank all those who refrain from poting when they have nothing constructive to add to the discussion.
Also my sincere thanks to Mr. Jim Lurgio, who has done a masterful job of sheparding the IDCC discussion through different forums. I appreciate your hard work and dedication. It is not an easy task.
Tax credit vs. expense.
Here's the explanation I posted when IDCC indicated they were looking into amending that should answer your very logical question. Unfortunately it appears they were only able to claim a portion of the potential credit
Since there was only two choices tax deduction or tax credit shouldn't a good preparer of taxes know from the start which one is best to use?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=27254242
Heartland over 5%
http://ir.interdigital.com/secfiling.cfm?filingid=937394-10-38
CUSIP No. 45867G101
1. NAME OF REPORTING PERSONS
HEARTLAND ADVISORS, INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. CITIZENSHIP OR PLACE OF ORGANIZATION
WISCONSIN, U.S.A.
-------------------------------------------------------------------
NUMBER OF 5. SOLE VOTING POWER
SHARES BENEFICIALLY
OWNED BY None
EACH
REPORTING 6. SHARED VOTING POWER
PERSON
WITH 2,179,245
7. SOLE DISPOSITIVE POWER
None
8. SHARED DISPOSITIVE POWER
2,283,995
-------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,283,995
10. CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES ____
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
5.3%
12. TYPE OF REPORTING PERSON
IA
CUSIP No. 45867G101
1. NAME OF REPORTING PERSONS
WILLIAM J. NASGOVITZ
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
-------------------------------------------------------------------
NUMBER OF 5. SOLE VOTING POWER
SHARES BENEFICIALLY
OWNED BY None
EACH
REPORTING 6. SHARED VOTING POWER
PERSON
WITH 2,179,245
7. SOLE DISPOSITIVE POWER
None
8. SHARED DISPOSITIVE POWER
2,283,995
-------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,283,995
10. CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
5.3%
12. TYPE OF REPORTING PERSON
IN
Item 1.
(a) Name of Issuer: INTERDIGITAL, INC.
(b) Address of Issuer's Principal Executive Offices:
781 Third Avenue
King of Prussia, PA 19406-1409
Item 2.
(a) Names of Persons Filing: (1) Heartland Advisors, Inc.
(2) William J. Nasgovitz
(b) Address of Principal Business Office:
All reporting persons may be contacted at 789 North Water
Street, Milwaukee, WI 53202
(c) Citizenship or Place of Organization: Heartland Advisors is a
Wisconsin corporation. William J. Nasgovitz is a United
States citizen.
(d) Title of Class of Securities: Common Stock
(e) CUSIP Number: 45867G101
Item 3.
If this statement is filed pursuant to Sections 240.13d-1(b) or 240.13d-2(b)
or (c), check whether the person filing is a:
(a)[ ] Broker or dealer registered under Section 15 of the Act (15 U.S.C. 78o);
(b)[ ] Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c);
(c)[ ] Insurance company as defined in Section 3(a)(19) of the Act
(15 U.S.C. 78c);
(d)[ ] Investment company registered under Section 8 of the Investment
Company Act of 1940(15 U.S.C. 80a-8);
(e)[X]* An investment adviser in accordance with Section 240.13d-1(b)(1)(ii)(E);
(f)[ ] An employee benefit plan or endowment fund in accordance with
Section 240.13d-1(b)(1)(ii)(F);
(g)[X]* A parent holding company or control person in accordance with
Section 240.13d-1(b)(1)(ii)(G);
(h)[ ] A savings association as defined in Section 3(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1813);
(i)[ ] A church plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the Investment Company Act
of 1940(15 U.S.C. 80a-3);
(j)[ ] A non-U.S. institution in accordance with Section 240.13d-1(b)(1)(ii)(J);
(k)[ ] Group, in accordance with Section 240.13d-1(b)(1)(ii)(K).
* The persons filing this Schedule 13G are Heartland Advisors, Inc.,
an investment adviser registered with the SEC, and William J. Nasgovitz,
President and control person of Heartland Advisors, Inc. The reporting
persons do not admit that they constitute a group.
Item 4. Ownership.
(a) Amount beneficially owned:
2,283,995 shares may be deemed beneficially owned within the meaning of
Rule 13d-3 of the Act by (1) Heartland Advisors, Inc. by virtue of its
investment discretion and voting authority granted by certain
clients, which may be revoked at any time; and (2) William J. Nasgovitz,
by virtue of his control of Heartland Advisors, Inc.
Mr. Nasgovitz disclaims beneficial ownership of any shares reported on
the Schedule.
(b) Percent of Class: 5.3%
(c) For information on voting and dispositive power with respect to the
above listed shares, see Items 5-9 of the Cover Pages.
Item 5. Ownership of Five Percent or Less of a Class.
If this statement is being filed to report the fact that as
of the date hereof the reporting person has ceased to be the beneficial
owner of more than five percent of the class of securities, check the
following:[ ]
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
The clients of Heartland Advisors, Inc., a registered investment adviser,
including an investment company registered under the Investment Company
Act of 1940 and other managed accounts, have the right to receive or the
power to direct the receipt of dividends and proceeds from the sale of
shares included on this Schedule. To the best of Heartland Advisors'
knowledge, none of the accounts own more than 5% of the
outstanding stock.
Item 7. Identification and Classification of the Subsidiary Which Acquired
the Security Being Reported on By the Parent Holding Company or
Control Person.
Not Applicable.
Item 8. Identification and Classification of Members of the Group.
Not Applicable.
Item 9. Notice of Dissolution of Group.
Not Applicable.
Item 10. Certification.
By signing below, the undersigned certify that, to the best of
their knowledge and belief, the securities referred to above were acquired
and are held in the ordinary course of business and were not acquired and
are not held for the purpose of or with the effect of changing or influencing
the control of the issuer of the securities and were not acquired and are not
held in connection with or as a participant in any transaction having that
purpose or effect.
SIGNATURE
After reasonable inquiry and to the best of their knowledge and belief,
the undersigned certify that the information set forth in this statement
is true, complete and correct.
DATE: February 10, 2010
WILLIAM J. NASGOVITZ HEARTLAND ADVISORS, INC.
By: /s/ PAUL T. BESTE By: /s/ PAUL T. BESTE
Paul T. Beste Paul T. Beste
As Attorney in Fact for Chief Operating Officer
William J. Nasgovitz
(Pursuant to Power of Attorney Previously Filed)
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement
EXHIBIT 1
Joint Filing
Good posts from Loop and dclarke today
Loophole's open letter to IDCC clearly lays out how the impasse with Nokia combined with the lack of material new licenses or renewals is supressing the stock price.
Dclarke highlights the challenge for IDCC to close - there is no motivation for companies to license other than to avoid litigation. Why pay when you can steal it for free.
I'm sure IDCC is well aware of the above, however 2010 is the year for the current management team to show they are up to the challenge or move on IMO.
Mickey, I'll pass on your offer
If that isn't what I showed I will kiss your ass in court square and give you a hour to draw a crowd.
To be honest, I haven't read your posts, but I saw replies from dclarke and olddog and got the impression you needed an explanation and I was trying to help.
What should be clear to me after all this time is that you obliviously have all the information you need on IDCC and on the proper criteria for posting (which is that I have a thought, it is positive, therefore I post).
The above is all in fun. I'll let you have the last word Mickey (which is kinda like telling Shaq he can dunk on me).
Mickey, cash in does not equal revenue.
Last year we received and this year we will receive $200 million cash from Samsung, however we only recognize $100 million of revenue each year. In 2011 and 2012 we will receive no cash from Samsung but will recognize $100 million of revenue each year. Over the long run cash and revenue will be equal, but not for each fiscal year.
You can't compute how much cash IDCC is going to have by taking current cash balances and adding net accounting income in the future because that income includes cash already received and banked.
The market's reaction to a dividend
If the dividend were a one time dividend, then I don't see the market reacting favorably. I think the stock price goes down by the amount of the dividend paid, all other things being equal, a non event for the share price. However, if IDCC were to announce a regular, recurring dividend, then I think the market would put a higher valuation on IDCC. So I've been hoping IDCC would do that. Of course, I was also hoping and expecting that IDCC was buying back their shares when the share price took the big hit after the ITC ruling and even at these levels, but I don't see any signs that they are.
I believe IDCC's valuation would rise with a recurring dividend because there is a significant segment of investors who look for dividend paying stocks to generate income as well as growth. If IDCC were to pay a dollar a share annually, that would be a 4% return at these levels. I think many investors would look at that return combined with excellent fundamentals and buy IDCC and hold it to keep getting the dividend return. Note that a one time dividend would not bring those investors to the table, as they are looking for a steady income stream, not random occasional distributions. Adding buy and hold type of investors in place of the momentum traders would take some of the volatility out of the stock.
I've heard some say that IDCC is a growth company, and growth companies don't pay dividends - mature, stable companies do. IDCC is not a typical growth company. Usually growing businesses need to invest their profits to grow. They need to buy more plant and equipment to increase production or they need to open more stores and hire more employees to increase sales. IDCC does not need to do that. IDCC does not have a need for cash to grow their business. Given IDCC's huge cash balance, insignificant debt and positive cash flow, IDCC could easily pay a recurring annual dividend of a buck and not impact their business plan.
I also wish they'd complete the buyback. For me, there is one overriding reason to do a buyback - because the shares are undervalued. Since I believe IDCC's shares are woefully undervalued based on fundamentals, I think buying back shares with a small part of their huge cash surplus is a great use of the funds. I'm not gay, but I could've kissed Bill N when he passionately presented the case for executing the buyback to Mr. Merritt on the CC.
I am very glad that IDCC has not made any big M&A moves, although I fear that is the reason they are hording the cash. I've seen a lot of big, successful companies go down that road and end up burning cash. The small M&A moves IDCC’s made have been good. Pick up some IP for a small investment, adding to their core business with limited risk. Trying to make the big splash is what has me nervous. I like IDCC's fundamentals and current business model. Yes, they need to get NOK, SNE, MOT and the others signed and LG renewed this year to succeed. That's where I want their energy focused. It makes me nervous to think of them trying to change their business model or buy a new business. I didn't like the SlimChip initiative because it took them into a new arena and away from the business model that I love. Management needs to execute the 3G contracts and renewals this year or next year's plan should be the execution of their employment contracts and renewals.
Frank
Bulldzr, you can pay yourself a dividend
Simply sell 4% of your shares, which will net you about $1.00 for all the shares you owned prior to selling. Your holdings would be worth less by the amount of the dividend recieved, just as IDCC's share price would fall by a buck when it went ex-dividend if they paid a dividend directly.
The difference is that instead of being taxed on the full amount of the dividend if IDCC paid it out, you would be taxed on the net gain on the shares sold. So you can decide how much of a dividend you want and how often you want it. Hopefully the price rises and you can sell less shares to get the same dividend.
Rockitt, you are correct
My statement
The beauty IMO of IDCCs business model is that revenues drop pretty much to the bottom line, except for taxes.
is erroneous. I should have said that additional revenues drop pretty much to the bottom line, except for taxes. That is an important difference. So yes, there is a significant difference between revenues and net income, however CHANGES in revenue should affect the net income by the amount of the change net of taxes.
For example, the Samsung contract. Revenues have increased ~$25 million a quarter. Other than the tax accrual, I don't see any other expenses increasing due to the Samsung license.
Frank
Econ 101, fixed vs. variable costs
First off, the whole discussion about the affect of the receipt of the $100 mil from Samsung is silly. As Olddog quickly pointed out, the payment is known and therefore already factored into the stock price. However I can't resist correcting some faulty reasoning, even if it is not applicable to the supposed point of the argument.
Yes, the $100 million received from Samsung goes to cash, although taxes will need to be paid. The beauty IMO of IDCCs business model is that revenues drop pretty much to the bottom line, except for taxes. IDCCs costs are mainly fixed, meaning that they do not fluctuate based on sales. If all of IDCCs contracts were magically doubled or cut in half, the affect on the operating expenses would be small other than taxes. Let me ask you this, Ed, if Samsung went bankrupt tomorrow and could not pay IDCC the $100 million, would that only cost IDCC 19 million or would it cost IDCC $100 million reduced by the tax savings?
Lastly, it was nice to see dclarke's response to Olddog on the efficient market. dclarke made an erroneous statement, olddog pointed out his mistake, and dclarke acknowledged his error and thanked olddog for pointing it out. This board would be a much better place if there were more mature posters like dclarke who are here to learn about their investment in IDCC, rather than those that are here to prove they are right (even when they aren't).
Frank
Glennymo, I completely agree about Data
thats very kind of you. i am not sure how we could have made it here without your selfless attention all these years.
His contributions are informed, balanced, intelligent, realistic and include predictions that are consistently more accurate than anyone else's that I can remember.
His agenda IMO is to provide accurate information to help investors make informed, rational decisions about investing in IDCC, which is something we all CAN control. He knows trying to support the stock with pie is the sky pumping is a waste of time and potentially harmful to unsophisticated investors who might mistake enthusiasm for insight.
I'm glad that you also recognize his selfless contribution of his time, experience and wisdom to all the followers of this board. He is definitely a top 5 poster in my book.
Frank
Nice to see the comp committee exercise restraint
IDCC, along with most other public companies, have a long tradition of rewarding mediocrity with the "free" shares. I am very pleased to see that there was no recalibrating of the goals or other massaging of the LTCP to pass out RSUs for 2009. I think the company did have a good year with the glaring exception of Nokia, so I think the year end cash bonuses are reasonable and justified. Let's hope there is good reason for granting the RSUs in 2010.
Data, no restrictions on the cash
IDCC receives the prepayment in exchange for use of their IP. Since there is no imaginable way for IDCC not to be able to fulfill that obligation and no additional work required from IDCC, there would be no reason for the licensee to put in some sort of clause in the contract requiring IDCC to set aside any of the prepayment to insure performance. Absent any specific contratctual obligation, there is no restriction on the funds.
The revenue will be recognized as the company has indicated (ratably over the life of the contract, unless the licensee exists the business, in which case the remainder is recognized at that time). Expenses are recognized the same whether it comes from "pre-payment cash" or "regular cash". I think they make a different sound rattling around when you shake the bank, but are not treated any different for accounting purposes.
Same rules for public or private companies.
Ed, why are you here?
I've chided others for ignoring any negatives and constantly trying to pump any situation. You are the opposite end of the spectrum. You look for anything you can say to denegrate, whether the comment is relevant or not.
Yes, your statement is technically correct, although you acknowledge that tangible book value doesn't matter. Obviously when one says "all indicators", they are going to be wrong, because there are many indicators that are inappropriate for a particular company and some that are so narrow that they are only should be used in conjunction with many other indicators.
So what is the point of your post? The point the poster was making is that IDCC is undervalued, based on funamentals and reasonable expectations for future revenues. If you disagree, go ahead and make your case. But to jump on an innocuous overstatement and use it as an opportunity to throw a meaningless method of valuation that is a ridiculous $2 a share shows that you have little interest in helping folks here understand IDCC. You seem to just like to run by, throw a stink bomb, and then run away and watch everyone fanning away your smell. Please find the maturity to just walk away. You won't add anything of value, even though you have the ability, so just leave us in peace. Please.
Put me near the top of that list
lol.....just don't dig up posts from those that thought the price would be over 50 by now!
I was positive that IDCC would achieve over $2.00 a share of earnings in a few years back in 2001, with a solid 10-20% growth rate based on the 2G/3G market share. With a good PE based on solid, secure earnings, a strong cash position and excellent visability, I was very sure that IDCC would be well over 50 by now.
Back when there was a big debate over stock options, there was some talk about options being out of the money, at as much as $60 a share, but had a 10 year life. Folks were claiming those options had no value. One poster said he'd sell me all I wanted at $1 a share for a 10 year option to buy IDCC at 60. When I wanted to take him up on it, he decided to pass. I would've been very happy to have made that deal at the time, but it now appears that I was overly optimistic. The Jan '11 puts are at .05/.25 now. I am still optimistic however I have learned to be cautiously optimistic and very patient. I just hope I get to see a selling opportunity before my kids inherit my shares.
Yes, Data, you are absolutely correct in that there are plenty here to counter any unfounded negative posts (and also most of the realistic but negative posts), so some of us are viewed as "N's" because we don't pile on against the negative nellies. I appreciate your balanced contributions to the board from your industry expertise as well as your sense of humor. You are definitely one the top 5 posters here IMO.
That concept has always bothered me
deserved any compensation he has been given
I’m not going to get into the specifics of Mr. Roath, but this mindset that if someone has done something important then no one should ever analyze or quibble about the amount of remuneration received is just incredible to me. I respect dclarke and many others that have posted similar thoughts in the past, but it seems like an overblown sense of gratitude rather than anything related to fairness.
When looking at fair value, there are two perspectives. One is how much is the benefit worth to the recipient and the other is what cost was to the provider of that benefit. Value should be somewhere in the middle. For example, the pilot Sully that landed the plane in the river in New York. One could say that he was doing his job and therefore his paycheck is all he deserves. However he had years of training that he brought to this job that gave him skills that were beyond the job requirements and allowed him to successfully handle a difficult situation that would’ve been catastrophic in human and financial terms to the company. Therefore almost anyone would agree that he deserves a hefty bonus for his outstanding work.
Then there is the other end of the spectrum, where one could say that Sully saved the company tens of millions in lawsuits and bad press, so they should pay him a large percentage of that amount. Plus a crash may have done irreparable harm to the company going forward, so he should get a boatload of stock options every year because without him, the airline might have gone under. Finally there are the hundreds of lives he saved. Shouldn’t all the survivors pay Sully 10% of their earnings for life - if they had the choice of dying or paying 10%, which would they have chosen? Most people will look at the last sentence and say that it is stupid. That’s because they can imagine themselves being a surviving passenger and it would be a huge burden to lose 10% of their income. However when it is a big, faceless corporation and the money is not coming directly out of one’s pocket, people seem reticent to ever say “enough”.
If one wants to make a calculation and come up with a number, even if it is one I consider extravagant, I can respect it because there is some rationality to it. The attitude of “whatever they got/get is okay with me” is one that will always bother me.
Obviously you can and will
If I can inject something?
If only it were some intelligence (sigh)
This will be my only reply to avoid clogging the board. I will answer each of your theories, and you will no doubt reply by repeating positve facts, hopes and dreams about IDCC that ignore any of the specific counterpoints made. It's easy to go to your stump speech and ignore things that don't fit in with your world view.
If you was Kyocera and you was trying to get the best deal possible would you really wait for a ruling that might make you have to pay a lot higher rate?
Absolutely, if I felt that I could get a lower rate with a favorable ruling and I thought there was a reasonable chance it occuring.
If however you was in negotiations and had agreed on basically a rate, but it might take many months to get both sides to read all the what if's and but's and soforth's that are in these contracts and then each side make what they think is corrections, and then after months of getting the language straight then sign the agreement.
They already had a contract worked out that has lapsed. IMO the new contract could be reviewed and approved in a matter of days. I would be surprised and very disappointed with the management of both companies if they did not have the contract ready to go with only the financial details to be worked out. It is just common sense.
Do you think the fact that the judge ruled valid and enforceable would not mean a heck of alot to Kyocera? Does the fact that IDCC has so many more patents and that Kyocera has many more products not make the process take a lot longer. I just seen on t.v. Sony showing off their lap top and netbook. The netbook he said sold for $499.00 and the laptop for $1300 and IDCC has proclaimed they should be getting paid for these items also if I am not mistaken. So the ability to finalize the new agreement with thousands more patents I doubt is something that happens in a matter of even a few months.
I believe that the manufacturers know that IDCC has valid patents and that they need to license. They sign convenience licenses that give them the rights to use all of IDCC's portolio. They understand that IDCC is continuing to produce more patents, as are other inventors. IMO, more important in coming to a rate than any recent patents are recent contract negotiations. If additional patents were cause for delaying negotiations, they would never sign anyone.
Mickey, here's why it makes sense
First Kyocera renewal was up before repeat before the ITC decision, so that kills any argument that they failed to renew because of the ITC ruling.
If Kyocera felt that Nokia was a benchmark for its license, then they would wait until the conclusion of the ITC to renew, using the results as a guide. If Kyocera was wating for Nokia to license, then when IDCC lost at the ITC, they would continue to resist licensing.
Its also funny to the best of my knowledge no one seemed to mention Kyocera till after the ITC ruling. Makes one wonder why then?
It doesn't seem odd to me, as it is completely logical. Before the ruling most believed that IDCC would settle or win at the ITC. If one believed that Kyocera was waiting for the ITC to conclude, there was no reason for concern because when ITC ruled or there was a settlement, there would be a renewel. Similarly, after the assumed successful completion of the ITC, IDCC would sign Sony-Ericcson and other unlicensed manufacturers. Since Kyocera was relatively small potatoes, they were not discussed. Now that the ruling has come, Kyocera is the only company currently up for renewal, so rational minds look to their license status as an indication of the affect of the ITC decision on IDCC's post ITC licensing ability.
EDIT
Jimlur
Does the words to the best of my knowledge mean anything?
Mickey
In your case, not a whole lot. It means you have a selective memory, disregarding any negative facts or opinions. It means that you would much rather post every positive thought you can imagine without ever taking a few minutes to check the facts. It means you think you can post whatever inaccurate information you want by saying "IMO" or "to the best of my knowledge" and never aplogize for being wrong nor alter your posting to check facts before posting because it's not about being accurate, it's about being positive.
IMO, the fact that IDCC is woefully undervalued right now means that it is a good stock to own. However it does not mean that everything is positive. Fundamentals are absolutely positive, but IDCC did lose at the ITC. Relicensing is a concern. Technically the stock may be ready for a breather. Acknowledging all factors honestly helps one invest wisely. Buying a stock, holding it to the grave and relentlessly pumping is not a wise investment strategy IMO.
Mickey, here's why it makes sense
First Kyocera renewal was up before repeat before the ITC decision, so that kills any argument that they failed to renew because of the ITC ruling.
If Kyocera felt that Nokia was a benchmark for its license, then they would wait until the conclusion of the ITC to renew, using the results as a guide. If Kyocera was wating for Nokia to license, then when IDCC lost at the ITC, they would continue to resist licensing.
Its also funny to the best of my knowledge no one seemed to mention Kyocera till after the ITC ruling. Makes one wonder why then?
It doesn't seem odd to me, as it is completely logical. Before the ruling most believed that IDCC would settle or win at the ITC. If one believed that Kyocera was waiting for the ITC to conclude, there was no reason for concern because when ITC ruled or there was a settlement, there would be a renewel. Similarly, after the assumed successful completion of the ITC, IDCC would sign Sony-Ericcson and other unlicensed manufacturers. Since Kyocera was relatively small potatoes, they were not discussed. Now that the ruling has come, Kyocera is the only company currently up for renewal, so rational minds look to their license status as an indication of the affect of the ITC decision on IDCC's post ITC licensing ability.
EDIT
Jimlur
Does the words to the best of my knowledge mean anything?
Mickey
In your case, not a whole lot. It means you have a selective memory, disregarding any negative facts or opinions. It means that you would much rather post every positive thought you can imagine without ever taking a few minutes to check the facts. It means you think you can post whatever inaccurate information you want by saying "IMO" or "to the best of my knowledge" and never aplogize for being wrong nor alter your posting to check facts before posting because it's not about being accurate, it's about being positive.
IMO, the fact that IDCC is woefully undervalued right now means that it is a good stock to own. However it does not mean that everything is positive. Fundamentals are absolutely positive, but IDCC did lose at the ITC. Relicensing is a concern. Technically the stock may be ready for a breather. Acknowledging all factors honestly helps one invest wisely. Buying a stock, holding it to the grave and relentlessly pumping is not a wise investment strategy IMO.
Year end bonuses and EPS
IDCC estimates the bonuses that are going to be paid and accrues them proportionally each quarter. This should result in steady charges each quarter. Estimates usually will need to be changed as time goes by and reality replaces projections. When expectations are adjusted, there is a cumulative adjustment to the accrual at that time and the future accruals reflect the updated expectation.
Barring any significant license being signed, I doubt that IDCC would pay out bonuses beyond the current expectations. It would be stupid for management to lower the accrual in Q3 if they are considering paying out larger than projected bonuses in Q4, because an additional charge in Q4 would definitely raise howls of protest.
See Olddogs typically on point post regarding the bonus accrual.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43687672
Good post Jai
Pay people that produce, not figureheads.
Leave management of the company up to the management team with the exception of issues where they have a conflict between personal and fiduciary goals, which occurs with their salary and buyouts.
Frank
Jim,
The open market purchases were under the 4:1 plan that Olddog referenced. There was great excitement when the insiders bought the stock, but a bit later it was revealed that they got 4 options for each share that they bought, in effect leveraging their upside 5:1. It was an additional option grant to management disguised as open market purchases to align their interests with shareholders. So yes, there were open market purchases but they came with 10 year options at the then current price.
Mickey, if you don't like it, LEAVE
Start you own board, run it the way you like. As an expert on constitutional law, you can make sure it does not violate anyone's constitutional right to free speech.
Here's the deal, this message board has rules. You know that. If you don't want to follow the rules, then find a board that is appropriate for you. May I recommend Atomic Bobs - they love positive opinions on IDCC, and bashing "negative" posters, IHUB and Jim. You'll fit in beautifully.
Jim has done an excellent job with this and every board he's run. The only mistake he's made that I can see was his stepping in to get you reinstated. You show no respect for anyone. You have a huge sense of entitlement, and I for one, am sick of your whining. When you attack Jim then I feel the need to exercise my right to post my opinion.
Mickey, you are sincere and honest, but that does not give you a pass on showing consideration to others. You are disrespectful and unable to see any point of view other than your own and think that you have an absolute right to say whatever you want whenever you want here. Wrong again, Mickey.
"Stock loss carryover" is not a tax term
The problem you had, and that I advised Mickey he needs to look into, is that when you are in the business of buying and selling real estate, then it becomes inventory, not a capital asset. Therefore the income or losses from the transactions is ordinary income, not capital gains or losses. I absolutely stand by my prior post.
I suggest you (and anyone else) clarify your understanding of your tax situation with your accountant. Tax treatement is very often based on facts and circumstances of the specific case and similar situations can have very different treatment.
Robjer, don't offer tax advice
Each of your short comments regarding capital loss carryovers demonstrated that you have just enough knowledge of taxes to be dangerous. I sent a PM to Mickey as he may have an issue, but it is not what you stated.
Capital loss carryovers can offset future capital gains, regardless of the source. If you own a rental property and you sell it for a gain, that gain is a capital gain (except for the portion that is a recapture of depreciation). That capital gain is offset by capital loss carryovers, regardless of whether they were from stock, real estate or anything else. You are correct that you can't use capital loss carryovers to reduce the tax on your inheritance, but that's because the recipient of an inheritance is not taxed on what he receives, so there is no income to reduce.
I suggest you talk to your tax guy about your tax situation and keep your mouth shut when you think you should "help" others with their taxes. You are woefully ignorant. I let it go the first time, but the lack of comment apparently emboldened you, and I don't want to make that mistake again.
Frank CPA
Paying off the mortgage
Yes, paying off the mortgage with an 8% interest rate when there is a surplus of cash earning < 1% is a smart idea. It was something I thought they should do for a long time, however I recall someone from the company (probably Scott) stating that the mortgage had severe prepayment penalties.
From looking at the 12/31/08 financials, the mortgage balance was $977,000. It was reduced by ~$225,000 in 2008, so it appears that it has about four years remaining. The balance of the debt is capital lease obligations.
Holy Sh*t, Batman! Great input from Bill Nasgovitz
I finally got a chance to listen to the conference call, and I loved the contribution from s-kicking Heartland analyst, Bill Nasgovitz. I completely agree with him and hope that IDCC seriously considers what he said. At $20 a share IDCC is woefully undervalued unless there is doubt about IDCC's ability to license going forward. Per management, licensing will not be materially impacted by the ITC decision. If earnings are solid and expected to increase, given the large amount of deferred revenue and IDCCs statements about licensing, there is no way the share price will stay this low when the street believes it. As Bill N said so eloquently, "or are we just bs'ing here". So IDCC should be buying with both hands NOW. Many of us shareholders don't have the cash to buy more shares, but would love to use some of the cash we hold indirectly through our investment in IDCC to buy IDCC stock. Decrease float = higher EPS, which will lead to a higher share price in the long term.
His example of using $200MM to buy 25% of the shares was startling. I also agreed with his comment about moving away from the core business model. Execute on licensing and keep building the patent portfolio. Personally I don't give a rat's ass about officers buying stock individually. That won't make me any money when the price goes up.
He also suggested a dividend to make the stock attractive to a whole new segment of investors. Given the huge cash balance and expected positive cash flow, they could easily manage an ongoing $1 per share dividend in addition to completing the buyback. One time dividends are pointless, as it will not bring investors to this company. But a regular dividend is a very important criterion for many investors.
I also loved the passion Bill N exhibited on the call. I like the way he pointed out how IDCC is so drastically undervalued at these levels. I hope he inspires some enthusiasm in IDCCs management and they can see the common sense in the substance of his comments. If they don’t do some significant buying at these levels recognizing the great opportunity to reduce float at a very cheap price, there’s only one thing I can say, quoting my new favorite analyst, “Holy shit! You’re talking about a pretty optimistic future here. Am I wrong, or are we just bs’ing here.”
Accounting for the Pantech agreement
I do not know exactly how the transaction was structured. Based on information posted, my understanding is that IDCC received (in millions) Pantech stock worth $22, $15 cash and are owed $75. The revenue will be recognized evenly over 28 quarters (seven years). I also assumed for simplicity that IDCC earned a full quarter of revenue this quarter. Based on the above, the transaction would be booked as follows (Debit, Credit):
Cash .................. 15
Deferred Revenue ........ 15
To record cash payment at signing of contract
Other LT Assets (Investment in Pantech)... 22
Deferred Revenue (Liab on bal sheet)......... 22
To record stock received at signing of contract
Accounts Receivable ... 75
Deferred Revenue .............75
To record balance of contact due from Pantech
Deferred Revenue ....... 4
Revenue (on P&L).......... 4
To record Revenue earned for the quarter (assumes a full qtr)
The end result is that IDCC has booked assets of 15 cash, 75 A/R, 22 LT Investment in Pantech, a balance sheet liability of 118 of deferred revenue and income statement revenue of 4. The liability for deferred revenue is the best kind of liability. IDCC's "liability" is to allow Pantech to use IDCC's IP for the next seven years.
The investment is Pantech will be carried at cost unless there is a writedown required - olddog explained it well in his reply to you. We are not recognizing the a portion of the stock each quarter. The only entries related to this in the future are the recognizing of $4 Revenue out of Deferred Revenue each quarter for the life of the contract (a recurring entry just like the last entry above) and debiting cash and crediting A/R as payments are received. Other possible entries would be if Pantech loses value there would be a debit to loss on investment and credit to the LT Inv-Pantech. When Pantech stock is sold, debit cash, credit LT Inv-Pantech and credit/debit gain/loss on investment. If Pantech were to default on the payments, then there would be a credit to AR and a debit to deferred revenue, and future entries to revenue would be reduced accordingly.
Ronny, feel free to correct or clarify. Nice timing of your buy. Now I finally understand why someone would watch a stock and participate in a forum even if he doesn't own it. He might be waiting for a great buying opportunity. Or he could just be a class act helping folks out in cyberspace. Or both.