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What is probably being inferred here is that some of the patents have been reserved by members of a consortium and Barclays/Evercore are trying to find buyers for the remaining patents that haven't been reserved to date. In the Nortel auction, there were many parties that came together to acquire specific patent pools ranging from from wireless inventions to social media and everything else in between.
IDCC's patents are not as broad as Nortel's but may be more strategic in the inventions that they cover. That being said, I do not believe IDCC will attract as many patent bidders as the Nortel auction, but the price should still be commensurate. The only question is, what is the value of the entity apart from the patents? That is what separates IDCC from Nortel. Since we have not been apprised of any value to date, it is obvious that negotiations are still in progress. We will be informed when the process ceases to be fruitful.
As to the relevance of the media leaks, I agree with those that say these leaks are the result of observations from a select group of interested parties and don't reflect the entire picture. Everyone associated with this deal has an agenda and none of them favor IDCC. Until the Company says something, we are likely to continue to hear about the negatives and partial observations. I wouldn't put too much faith in these so called news flashes (leaks) by self-proclaimed insiders or "sources in the know".
Good, the more lawsuits that are filed in this space, the more valuable our patents become. I want to see 20 more lawsuits filed and at least 10 of them coming from IDCC.
This is more like IDCC's conference room while waiting for the CAFC decision. Does anyone know if our lead judge still alive?
Sounds like they initiated a few more opportunities to fleece investors. When are people going to learn that options are dealt from a stacked deck? The only way to win from options is not to play the game.
The two companies in most need of IDCC 's patents are HP and Dell. Both of these companies have to develop a mobile strategy to make up for declining PC sales. They both have manufacturing capacity but lack wireless patents for cross-licensing. Without cross-licensing capability, neither will be able to compete in the wireless space unless they acquire a wireless company. IDCC's patents are the cheapest way to enter this space. IMO
I think the key words in this release are "satisfactory to AT&T". This language does not insinuate that the merger cannot happen but that it may not happen in a manner that is to the liking of AT&T. For example, if AT&T has to spin off considerable assets or spectrum to receive regulatory approval, they may terminate the agreement and be on the hook for the penalty. Usually, the deal will not be nixed entirely, it is just filled with so many conditions that it may not be worth continuing to pursue. That could leave AT&T on the hook for the break-up fees.
This is a precedential order for a case that was heard on appeal by the CAFC, went through the Supreme Court and was remanded back to the CAFC with additional instructions and claims interpretations. I tried to read the order and it seems complicated dealing with studies of immunizations of infants to determine medical treatment for future illnesses. It involved a lot of major drug companies and got a lot of attention in legal circles. I can see why Judge Neuman put a lot of time and effort into this order.
With this order out of the way, we may finally get some action on the IDCC/Nokia case. Hooray.
Per IV board posted by randallmcm:
"CAFC decision delay = Claussen Immuno v Biogen Idec written by Neuman today...
Perhaps this 57 page opinion issued today and authored by Neuman will free up her time for finalization of IDCC vrs nokia...
If we were really lucky it would come tomorrow."
Does anyone know when the oral hearings were conducted for this case?
jaytaylor, one problem with the ITC is that the judge who rendered the initial ITC decision (Luckern) is now retired so another judge will have to be appointed and reaquaint him/herself with the case material and the CAFC claim construction. I would think the decision would come later rather than sooner.
Besides, IDCC never gets anything timely our of our judicial system. I am more anxious to see the ITC agree to hear the new complaint filed by IDCC against Nokia, Huawei, and ZTE. That will have some significance as well especially with some of our new and improved patents.
Nic,
IDCC still needs to license AAPL for 4G/LTE. What is that worth? Based on the royalty rates being spewed by the other patent holders, we should be looking at 1% - 2% for LTE alone. Now throw in the remaining infringers for both 3G and 4G at between 1% and 2% royalty rates and one can easily calculate earnings to support a price of $100 but that can only be attained through litigation over time unless IDCC can get a quick win from Nokia at the CAFC.
For a company with little or no patents, IDCC's portfolio can save them 25% to 35% on royalty costs annually through cross licensing deals from other OEM patent holders. For a Huawei, ZTE or HTC, that is worth more than what IDCC can monetize them for.
paheka,
The new litigation is with Nokia, Huawei and ZTE. HTC is already a licensee.
As far as the Google/MMI combination goes, I believe Google had been in discussions with MMI for several months before the Nortel auction. Google desparately wanted a phone OEM as well as patents to protect Android. I think IDCC came into the picture after the Nortel auction as a buffer to get a lower price for MMI. Upon going public, Carl Icahn gave a warning to the MMI board to not let IDCC interfere with Google's original plan to purchase MMI. In other words, Carl told the MMI board to get the deal done and quickly.
I don't think Google would improve its position much with an acquisition of IDCC but you never know. The Korean or Asian companies would get the best bang for the buck by acquiring IDCC but if HP decides to enter the wireless phone business, then I think HP and Intel could make a formidable team. There are many options and consortiums to be considered. I would be more than happy with a buyout at $125 to $150.
IMO, HTC will have to be included in a consortium to purchase IDCCs patents. HTC is as naked as Google when it comes to the ability to cross-license patents for 3G and 4G and could stand to lose more than Google if they do not have a patent pool to trade. I am looking for HTC's participation with Google, Apple or Samsung when it comes to acquiring IDCCs patents.
Bucket, it depends on what you do with the options. If you exercise the options and purchase the stock for $35.00, then swap them for Google shares, it will be considered a tax deferred (like-kind) exchange. Your basis in IDCC stock that will transfer to the Google stock will be the cost of the options plus $35.00 per share.
If you do not exercise the options, you will in effect be cashing out the options and it will be considered short-term capital gain income for whatever value you receive for the options less your purchase price.
If IDCC decides to sell only a piece of the business, it better do a spin-off first otherwise it will all be taxable income to IDCC and that will take 40% right off the top.
You're probably right there. How many Wall Street computers are still tracking IDCC based on sales revenues and EPS? I would bet that a lot of new shorts occurred from computer models that do not take into consideration the possibility of a buyout at much higher prices.
Only a public bid at a certain dollar amount will let this stock go higher. Wall Street wants confirmation of the level of interest of prospective buyers here.
IQ, do you suppose Google and other suitors are just waiting for a CAFC decision to see if the patents are legally enforceable? A positive CAFC order could add a lot of value to the patent portfolio.
Why are the two of you arguing over Loop, I believe you are both on the same side here.
Jim,
Once the warrants are exercised, I believe the debt is converted to equity at the equivalent of $67.00 per share. I don't think there is any more cash forthcoming. IDCC already has the cash and will eliminate its debt upon the conversion.
It appears as though the stock may be retracing based on the max pain theory for option expiration this Friday. Max pain for July options is set at $40 per share.
Use the following link to view the max pain calculation:
http://www.optionpain.com/MaxPain/Max-Pain.php
If Google owned IDCC's patent portfolio, they would have to license the patents to all OEMs using FRAND. However, I think the definition of FRAND just went a lot higher than parties believed it to be a month ago. LG just dug themselves into a hole by holding out on their new license. If the offer is still on the table, I believe they will be signing shortly.
Apple's royalties are also going to be going up significantly when their license is up for renewal and so will Samsungs. It would behoove these players to sign early and lock in a good deal.
Badger, you forgot the value of IDCC's new bandwidth (video) compression technology. This is where I believe the future growth in this company will come from. That is worth at least a $ billion or so and that easily gets us to a value of at least $6 billion.
Agree AMC. In my excitement, I forgot to add some value for the bandwidth compression technology. That's worth another billion at least and I know Google will know how to both use it and market it to the public. That may even trump the royalty free exchange of the existing patent portfolio with the likes of Nokia, Samsung, LG, SE, Motorola and now Microsoft and Apple.
With no defensive patent strategy, Google will be shut out of the mobile market, at least profit wise. IDCC should quickly rise to the top of their list and Apple and Microsoft will surely run up the price to make sure Google pays top dollar. Let the fun begin. I'll take $150 right now.
Okay, let's go for a trifecta. We need a positive CAFC announcement this morning and either a Nokia settlement or a Google buyout offer this afternoon. We can always dream, can't we? We're worth at least $5 billion, $4.5 billion for patents and $.5 billion of cash.
Why doesn't one of these big IT security companies just buy Wave so that all hardware and software bases are then covered. They can push both products and let the customers choose the application they like best or build an enhanced product combining both hardware and software applications. It is almost a no brainer. I guess they don't believe Wave is for real yet but by the time they get it, it might be too late.
I would like to see Wave succeed on their own but am getting really tired of the slog. It appears Wave has very little budget for advertising and their marketing is geared towards trade shows. I hope they can generate some interest from Europe that will make American companies sit up and take notice.
They said the shelf is needed to cover outstanding warrants. The existing shelf was due to expire next year so I don't see any negatives resulting from the shelf. Good thing is I believe the stock has to go up to make the warrant holders exercise. Second quarter coming to a close and no new deals announced. We'll have to wait and see what the revenues look like.
It could be just clearing short positions from the last two weeks in order to keep the price below $36 for options expiration. The holders of puts made a lot of money last Friday. If it is someone in the know, that volume will certainly attract attention from the SEC if an event unfolds in the near future.
IDCC needs to cut and paste that quote by Paul Melin (Nokia VP for Intellectual Property) verbatum in its Delaware case should the need arise. Amazing, Nokia stating how important it is to protect your inventions and patents. I especially liked his following two remarks:
"But we don’t just put in all this time and money to be nice. Like every other part of the business, R&D has to make a contribution."
and
"Research is Nokia’s life-blood. But it is also an investment, contributing significant sources of income, one way or another. And it’s absolutely our right to be able to benefit from that investment."
nickyc, are the bonds publicly traded and do you know what the interest rate is?
If hardware becomes a solution to eliminate hacking risk, then Wave should become an insurance provider. Sell the same product but package it in a different way. "Sure we will insure you against losses due to hacking but you have to use our anti-hacking solutions."
You would think that that would set the bar for FRAND but Pnokio will come up with some sleezeball argument as to why it shouldn't apply to them.
IDCC signed AAPL to a license three years ahead of Nokia. Granted, it doesn't look like such a good deal in hindsight because we now know how successful AAPL is selling their I-phones and I-pads. We don't know what kind of a deal Nokia got but I bet it isn't as good as analyst's are estimating. We could have signed Nokia to a license as well if it were on the same terms as the AAPL agreement but management is holding out for the right price (whatever that is).
I support management's decision to fight Nokia for what is right but I sure don't like the wait. If IDCC wins it's case against Nokia and settles for a good rate, everyone will be congratulating IDCC's management team and they will be back in good favor with Wall Street. Sometimes execution of the business plan takes longer than we like but I don't want to cave against Nokia. We should initiate another case against them in Europe where our patents seem to be better protected than in our courts in the U.S.
This is very interesting. Assuming IDCC gets about $0.80 per phone from ITC, that would represent an increase in royalties of about $20M for the year 2011. I don't know if that has been factored into IDCC's revenue guidance. If so, we are losing big on another per unit licensee like RIMM.
Things to make you go Hmmmmmmmm!
So here is Wave's new business plan. We have them implement TPM's with ERAS and then sell them cyberinsurance protection. We can discount ERAS and make it up through the insurance model.
Loop,
It seems to me the real value of the ITC/CAFC proceeding is to find IDCC's patents both valid and infringed. At that point, IDCC will have a legal finding attached to its patent portfolio and then they just need to settle on a dollar value for the patents. That dollar value has undoubtedly been a major point of disagreement between Nokia and IDCC. How do you think this new agreement with Apple will affect the rate negotiations if IDCC prevails at the CAFC. I can't believe Nokia will get $6 per phone in royalties but it will bode very well for us if they do and we get a positive CAFC ruling. Nokia will have defined FRAND for us at that point. Afterwards, I look forward to the termination of the existing Apple license. Talk about a boost in revenues... I always thought Apple would buy IDCC for patent protection but the value of IDCC's portfolio cannot be determined until they prove their patents valid and enforceable in a court of law.
Based on the detail of the previous order written by our esteemed CAFC judge, I believe she is taking the time to get our order right as well. I was originally worried about the time it is taking to get our decision published until her last precedential decision was published last week for a case that was heard last November. Now, the timing doesn't seem to bother me so much. I have some dry powder available if things start looking up.
enyaw, the options don't expire until next Friday.
Question, page 8 of the Intel paper mentions remote attestation software for use with Intel's Xeon processor. The software is referenced Enomaly ECP HAE. Can someone explain this software reference? Does this technology compete with Wave's ERAS? I thought Wave had a technology agreement with Intel.
There are two problems with your response here. First is that someone must perceive there to be a problem that therefore results in a question to or an interest in the opinion of their industry circle of friends. If there is no perceived problem, they won't be interested in what successes other companies have. Second, IT departments apparantly don't perceive cybersecurity threats to be a problem right now and that existing security methods are just fine. The Boards think the IT departments have these threats covered because they are probably being told that.
The industry has to change their thinking about the perceived problems in order to get the IT heads to think there are risks that are not being addressed. That can only be done through education of the perceived problems. Wave has spent years trying to address the problem but are doing it through small audiences and probably more to the IT heads who don't want any change. The audience has to be the Boards who have a fiduciary responsibility to their shareholders and customers and to the public that will ultimately demand change to protect their identities.
If Wave can't afford to advertise, then they should try to get a spot on 60 Minutes or something that people will watch. I'm sure 60 Minutes can come up with a catchy phrase for a program on Cybersecurity threats and available solutions. It would sure grab the attention of the public at large and would become the hot topic of all IT departments and board rooms in fairly short order.
Hock, I agree. When shorts can set up trading between themselves on multiple exchanges with no uptick rule in place, they can take the stock wherever they want to. But they can't cover their shorts unless someone else sells. It seems like the only way they can get IDCC investors to sell is to trigger stop losses and by creating margin calls. Hopefully those options have now been expended.
Speaking of options, based on today's closing price of $36.35, there are 28,236 put contracts in the money (ITM) at a value of approx $13.8M representing an average of $4.89 per share. There are 5,643 call contracts in the money at a value of approx $2.8M representing an average of $4.96 per share.
In total option payouts will amount to approx $16.6M based on today's price. If the price retreats below $36.00, total option payouts will amount to approx $18.9M. At a share price of $41.00, total option payouts will amount to approx $12.2M. Which way do you think the stock will be headed based on past experience?
paheka,
I think you are wrong in your assumptions about the impact of this board on peoples decisions to buy or sell stock in IDCC. As an investor, you can go to 10-Ks and 10-Qs but they will mostly only tell you about the past. You can read analyst reports until you are blue in the face but how much of it can you truly believe (some like MPartners are better than others). This board provides a daily pulse for the stock and investors concerns about the future. Granted, there are a lot of trash comments on this board but there is a lot of good information to be gleaned as well.
We have all kinds of professionals that comment in this forum with specialties in law, accounting, financial analysis and technology consulting. The only problem is we do not have the informaiton at hand that management does so we are left to guess and speculate about the future and I don't think we've been that far off on our guessing and speculation to date. I'll even bet we've surprised management on an occassion or two. The only thing we can't seem to nail down is timing of events, but then neither can IDCC management.