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The upside, Nokia is forced to pay up, on back royalties, upwards of $500mil, that gives you $1bil in cash, earnings will soar, the PE will contract to 3-4X, momentarily, then market will see future revenue stream--- going forward the stock is worth $100min pps, the price has to be at 2X or 3X, the LTE/4G patents alone will give you earnings acceleration, the question is when? when? when? a deal like this takes a while, it might be 12-13mo, the market gets ahead of itself, the market gets behind itself----
BOD are all capable people, so relax enjoy the wait and ride--
I think the lower tier of the Asian bidders are gone, they seemed to have leaked to DR and others, Jobs dieing and the pause on company for this put us a few weeks behind, I'm guessing we are a few days or weeks away, the Nortel auction got the BOD attention, so they had some idea on price, future revenues are huge for the LTE/4G patents alone---
these deals take time, Its hard to wait, but this is where the test comes in, all longs are in the same boat.
I agree , I think this is a must for Intel, the future smartphone, mobile tablet world will eclipse the PC biz, and they don't have a foot hold in it---
finding gems in the rough always require fortitude, and not giving up, the market is driven by people, people flee most of the time too soon, they stay round too long, the market is driven by fear/greed---all in all, risk is always present
IDCC has 700mil in cash
earnings
pays a dividend
has put itself up for possible sale
---the price is not reflecting the reality of the future, more licenses and bigger market for IPR
the stock price is what it is, the buy out price is what it will be or not but, I don't think the stock price is indiciative of the value of the company like the Pharmassist wss this week, it was undervalued by 65%, so if you take that as a consideration on a daily basis you get no indication as to value, I believe one of the M/A this week was a consortia group
Dell should have bought EMC or Network Appliance---bad advisors and horrible strategic planning on Dell's part---, Rimm(although they would have ended up in the same place with Rimm), Dell could have bought EMC at one time and then been in a bigger market-----Dell with Rimm might have changed things---
not to mention that IDCC has like 6 engineers on the Standard setting boards, plus the foundational patents for over the air communications are all proven in 3G by 50% of the 3G devices sold, and the other 50% should be paying---this article makes no differentiation as you stated----
This guy does have a clue about the nature of wireless protocols or standard boards, Wireless communication devices makers adhere to international standard boards that set standards....Android is an open source operating system built GIVEN away to device makers by Google---
Apple report by Jefferies,
"Apple's cost savings: purchasing this portfolio and signing cross-licensiing deals would allow AAPL to save $3-$10 per handset, based on our quick analysis. We estimate Apple will ship ~500M phones in the next four years. Assuming a 5% unit CAGR thereafter and a 10%
discount rate, the InterDigital portfolio could be worth between $3B and $10B to Apple."
$3-10b,series dollars for Apple, I think what held us up:
Death of Jobs
we should be back on track pretty soon, this qtr, Apple will sell 40mil iphones
I think he's low the next 4 yrs will be 500m+
Acacia Research Corp is interesting , does anyone know much about them--they are getting a 64X PE , and have less cash, seems to be a pure patent troll---http://tinyurl.com/cnb4oxm
it appears they are pooling patents to provide offense for related companies--
totally agree, we are not high enough on the totum poll to be privy to this kind of information, Common stockholders are pretty low, as a class---sorry, real world---
Nortel was a court ordered bidding process to recoup $$ to pay secured creditors, this is not the same, this like over hauling a V8 at 80mph , the car is still running, the company has to continue business as usual and there's no forced sale----there's a lot of agreements/licensing and "what if's",
this will be fun to watch play out, the IP biz is becoming more valuable daily, since more lawsuits both offensive and defensive , our position is strengthening daily---plus the 200 engineers, 45 phd's are working on new breakthrough IP...
Value is in IPR today:
reading the Steve Jobs bio today, Xerox had a huge lead on all others, no one protected the innovations, if they had the royalty stream for Xerox would have been HUGE---Jobs, Gates walked away with GUI technology for FREE---Issaccson says Xerox was more interested in 15yrs than in the next year---
thanks
isn't a Frand where everyone gets the same rate and its all open to all the others?
"A sale represents a sharp tactical shift. Kodak picked up just $27 million in patent-licensing fees in the first half of 2011 after amassing nearly $2 billion in the previous three years."
Idcc is monetizing its patents a much better rate than EK, EK has put 1000 patents up for sale for $5-billion or so---amazing bankrupt companies can fetch these valuations but going concerns seem to be valued at 2bil---?
http://tinyurl.com/3fr3tg2
If IDCC has 50% of all 3G phones under a royalty agreement, its a matter of time before NOKIA and others fold, or buy the company, MSFT has huge reasons to buy IDCC to me, they could use this a huge leverage on NOK and others--if you had a lagging position in wireless, this is it , IDCC patents and engineers---I can't see why they are not at the table,
Look at what a near bankrupt company is depending on:
http://tinyurl.com/3fr3tg2
on the balance sheet these patents are not valued--our GAAP has no way to recognize IPR, if they did IDCC would realize a 3-4billion asset tomorrow---all our rules were written for smoke stack industrial age period-----
we are making more money than MMI, plus we don't have a 800 employees to get rid of:
"This news follows last week's earnings report, in which the mobile company reported a $32 million net loss -- not the greatest financial report, sure, but a marked improvement over the prior quarter's $56 million loss."
http://www.engadget.com/2011/10/31/motorola-mobility-to-drop-800-jobs/
so Google paid 12bil for a money losing company, and IDCC is in much better shape with patents that are stronger---
Does anyone really think that google will mfg a handset? money losing proposition, up against the Samsungs and the HTC and others--
3G as far as revenues , we are in the 3-4 inning, the 1st inning is 4G, LTE, IDCC is on target for 50% ramp over the next 5 yrs, plus the new M2M and the other video compression, TV will be huge in 4G lte, thus needing more bandwidth
Good point, the back room negociations going on with IDCC BOD must be very tense with the constortia or single buyer, so much future deals are at stake, when you take Jobs desire to destroy Android he must have been very Irked with Microsoft so tied to them---
the future defensive and offensive strategy with IDCC , LTE patents are huge--
I feel IDCC is about to "come of age" the 3G was/is training for the big game of smartphone wars
Mpartners has been pretty good at valuing IDCC, they had a target of 65 and it hit it--
"sign effective and consistent license agreements for it's IP."
this one, you/I don't know---and since we are in a lock down mode, what has and hasn't been signed is not being released,
Past deals have been good, the company has $690mil in cash of which 500 came from free cash flow, this came from IP deals---
a Nokia deal should be signed, if not for this legal web , it would have been signed, all major competitors have signs---why not Nokia---
? so you litigate and it take 4-5 yrs---such is doing business at the court house--
Isn't SamSung 34% of IDCC revenues, I contend RIMM is the biggest Loswer, they should have BOUGHT IDCC, Dell should have bought RIMM in at around 2000--then they could have had an OS for the new world order---
you/I don't know that, the company has chosen to be in a quite period, since they effect the value going forward, and present value, they may be shopping them privately to the bidders,
Again: this process of selling the company is being carried out , NOT in the open market to "increase shareholder value",
Plus 200 engineers of which 45 are phd's= ?
500 new patents this year = ?
a solid track record of earnings
the Nortel auction was for a dead company, all this crap about the patents in 3G being encumbered, they fail to take into account,
the growth in Smartphones are just beginning
Handsets= 1.5billion
Smartphones=150mil, Android and iOs
so as Apple's cook says we will eat away at the 1.5billion-
Apple could solve IDCC process pretty fast, they need it, if Job's legacy of , I will destroy Andriod, this is just about the best way to make that a reality---take it apart by pricing it out of the market---
Rimm should have bought IDCC when it was a high flyer, then make it difficult for the others to operate within the "ecosystem"
I agree, plus upside of LTE deals, NPE, IPR companies are difficult for analyst to judge I suppose, the legal proceedings are always un accounted for---just sunk cost, until decided, I read the 2010 proxy the Nokia legal battles are since 2007---
your right, it was its base station business I believe
Qualcomm 1996 was a $6 stock, when Ericison settled the suit the stock took off and became the bubbles darling, I was there, IDCC is in the same place with Nokia, we would hope that Nokia settles, signs and agrees to pay the back royalties IDCC is due, the story changes in a flash, for the present time, doubts of the suits, the settlements, ongoing process is making FUD reign, I understand IDCC Is a NPE, Qcom sold off most if not all its products except chips---
my guess, MSFT should become very interested with Nokia signing---
**update Ericson sold its 50% interest to Sony just today, Qcom sold Ericson its handset division in late 90s, then signed a multi year license
Sony appears to lining up to build smart , internet connected devices
I agree, this was not new and based on pure valuation the report stated facts per company known information, we know this is a hot market, more favorable days ahead
yes, it sure would,