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Would margin calls be influencing our trading today?
Oct 7, 2011 Options are now open.
That scenario could be a winner. INTC would take the engineers for R&D and the android makers will buy INTC chips.
my3sons87....Thanks. Missed that.
Does anyone have the new script from Dealreporter?
Do you have a link to Teecee's post? Somewhere along the way I have lost that IDCC board link.
Did RS tweet again? I did not see anything.
"If you knew that the bidding sell price was already higher than your short price, what would you do?"
I would create some bogus report from an anonymous source.
And, we now have another option expiration date this Friday. Hmmm...
That could have been a two month old bid from Google after they lost Nortel.
If it is flyonthewall, I think we all know they have been ZERO accurate in the past concerning IDCC.
Intel acquiring Interdigital make sense? Why not? Intel merged with Infineon a long-time partner of Interdigital in mobile chip design.
Just posting what is out there in the public domain. I support neither his poor usage of words or hypothesis. Clearly he has mangled the original Bloomberg article.
InterDigital next in line as Patent war heats up
Posted on September 12, 2011 by Cameron White
InterDigital is trading more than 2.3 percent higher today after it was announced later last week that the company could be the next in line to be consumed by a patent hungry tech giant. According to reports Intel (NASDAQ:INTC), Samsung Electronics, Ericsson and HTC Corp. are all reviewing InterDigital data as they weigh up an offer for the company’s assets. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) where all said to be interested in the company’s patent portfolio but those interests have cooled after reviewing the company. Google’s interest has cooled following their $12.5 billion acquisition proposal for Motorola Mobility last month.
A bid is expected to proposed in the next couple of weeks and analysts estimate that the deal could fetch up to as much as $5 billion. The company currently has 8,800 patents on inventions used in a number of electronics.
Major tech companies have been at war in 2011 for other companies with troves of patents. That war has been fueled by a strong, growing demand for smartphones which are forecasted to reach sales of 1.1 billion by 2015. Apple currently has the largest market share in the smartphone industry with 18.5 percent followed by Samsung with 17.5 percent and Nokia with 15.2 percent.
InterDigital (NASDAQ:IDCC) is currently trading at $65.76 a share, a 2.3 percent gain on the day so far. The company has gained 55 percent since July 18th.
http://estocksdaily.com/interdigital-next-in-line-as-patent-war-heats-up/
Intel Corp. (INTC) is among companies considering submitting bids for InterDigital Inc.’s patent portfolio this month, while Google Inc. (GOOG) is losing interest in the assets, said people with knowledge of the matter.
Intel, Samsung Electronics Co., Ericsson AB and HTC Corp. (2498), are reviewing confidential InterDigital data as they weigh offers for the company’s assets, said the people, who declined to be identified because talks are private. Microsoft Corp. (MSFT) and Apple Inc. (AAPL) have also looked, one person said. First-round bids are due in two weeks, and bidders have been asked to indicate initial interest in the coming days, the person said.
Some buyers may team up on proposals, the person said. Google is backing away from an offer after agreeing to buy Motorola Mobility Holdings Inc. for $12.5 billion last month to gain patents and a hardware business, the people said. InterDigital, which had a market value of about $3 billion as of yesterday’s close, may fetch more than $5 billion, according to analysts at Algorithm Capital and Dougherty & Co.
InterDigital’s engineers invented some of the technology for high-speed mobile phone networks now used by the world’s biggest handset makers. The King of Prussia, Pennsylvania-based company has about 8,800 patents on inventions used in devices ranging from Apple’s iPhone to Google’s Android-based handsets and Research In Motion Ltd. (RIM)’s BlackBerry.
Officials at InterDigital, Google, Intel, Samsung, Ericsson, HTC, Apple, Microsoft declined to comment.
Shares Gain
Companies won’t be required to submit detailed financing information with their indications of interest, one person said.
Through yesterday, InterDigital’s shares had gained 62 percent since the company said on July 19 that it hired Evercore Partners Inc. and Barclays Capital to explore a sale or other transaction.
The company has said its patents are deeper and stronger than those Nortel Networks Corp. sold for $4.5 billion in June to a consortium including Apple and Microsoft. The companies are selling patent portfolios as smartphone sales are forecast to almost double to 1.1 billion in 2015, according to estimates from Gartner Inc.
During the second quarter, Apple and Samsung became the top two makers of smartphones after their shipments trumped those of Nokia Oyj (NOK1V) for the first time, research firm Strategy Analytics said in July. Apple’s iPhones accounted for 18.5 percent of global smartphone shipments, followed by Samsung’s 17.5 percent and Nokia’s 15.2 percent, according to the researcher.
To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net
To contact the editors responsible for this story: Jennifer Sondag at jsondag@bloomberg.net; Tom Giles at tgiles5@bloomberg.net
There are approximately 50,015 Call options written for strike prices between 70 and 120, expiring Sept 17. That represents over 5M shares. Lot of big bets out there and the MM's, etc will need to offset these calls between now and expiration date.
I respectfully disagree with point #3. Our current share price has little to do with our worth. Some analysts I have read use the old metric that IDCC has already run 50% and based on EPS that there would not be much of an upside from here. They fail to grasp that IDCC was previously valued based on garnering only 42% of the potential 3G licensing market. If, IDCC had 100% of the 3G market under license, where would the share price be today? I would suggest it would be significantly north of where we are today. When you have the big boys jumping in one can assume that they will get 100% value of those patents either in licensing or use the new patents to offset cross licensing, either way its a plus on their earnings.
There are many dynamics happening on a daily basis as we all know and have seen over the past few weeks. The once dominant players in the industry five years ago are now bringing up the rear. The industry is expanding in mobile device usage and innovation but over the next few years the number of players will be shrinking through mergers and buyouts. IDCC once a laggard is now being sought out as the crown jewel. What IDCC will do with their new fame through "seeking strategic alternatives" is uncertain. But I feel better with Clontz on board than Harry (RIP).
The 50M devices shipped was used only for easy calculation. Apple will probably ship double that as you suggest so a double would equate to 3B - 10B per year savings. That certainly would raise their margins.
I agree that if NOK and LG were licensed our PE would be lower and the share price probably higher than it is today and we would not be looking to sell the company IMHO.
Let me see if I get this straight...
IDCC is pricey because it is 31 times projected 2011 earnings. OK. But yet Nortel's patents were bought for 4.5B and Nortel had projected earnings of squat, nada, nil, zilch, zero. Yawn.
IDCC patents (company) will be bought out not on an evaluation of current share price or projected EPS but rather on what effect it will have on the margins of the acquiring company over the life of the patents. One article I read calculated that Apple would save between $3 to $10 dollars per device, if it owned these patents, through cross-licensing. If Apple ships 50M devices per year that is a range of 150m to 500m per year. Over a ten year period this is 1.5B to 5B. I have no idea how many devices (iphones, tablets, TVs) Apple will ship over the next ten years but I think the amount of money spent on acquiring IDCC will be offset by their savings.
They may only have 6B in cash but they can issue stock which could be enriching for us, in the long term, based upon their ability to increase licensing fees.
Jim, that is where I got the original figure regarding Samsungs bidding for IDCC, that they will go to 5 billion. Evidently, the bid has eclipsed that number so they will be pursing other avenues.
Shuttlworth did not argue that IDCC shares are too expensive. It was Streetinsider who had that as their initial headline off an interview with Shuttleworth. Shuttleworth was saying that Samsung dropped out of the bidding war because it was getting too expensive. Streetinsider needs to do a better job of filtering and proofing what goes out on their wires. They have on two occasions in the past 10 days put out bogus news. Not good for their credibility. Why would one subscribe to their service if the information they publish is questionable.
artk...may have misread yours. Not a problem as long as accurate information gets out.
artk: here is the updated news from Streetinsider
Analyst on InterDigital (IDCC): Samsung 'Thinks IDCC is Getting Too Expensive'
August 19, 2011 3:36 PM EDT
M Partner's Ron Shuttleworth issued an intraday research note Friday discussing recent momo stock InterDigital (Nasdaq: IDCC).
Following a more than 50 percent surge in InterDigital shares since mid July on buyout rumors, Shuttleworth notes indications from "Korean media that Samsung has announced that it is not interested in bidding for the InterDigital patents." Samsung believes these patent plays have "become too costly after the Apple (Nasdaq: AAPL) consortium won the Nortel auction."
Shuttleworth's sources suggest Samsung will be watching InterDigital closely "as the outcome could have an even bigger impact than Google's offer to acquire Motorola." The analyst argues the Samsung reports indicate several items: 1. Samsung believes the IDCC patents are "pretty important" and 2. the company "could get expensive."
Shuttleworth believes "multiple bidders remain..." including Apple, Qualcomm (Nasdaq: QCOM), Intel (Nasdaq: INTC), Google (Nasdaq: GOOG), Nokia (NYSE: NOK), Microsoft (Nasdaq: MSFT), RIM (Nasdaq: RIMM), Ericsson (Nasdaq: ERIC) and several others. With a $118 price target, the analyst is obviously still very bullish on the stock.
The firm currently values InterDigital at around $65.50 fundamentally.
M Partners reiterates a Buy rating on shares of InterDigital.
ARTK....Please read my msg #332536. That headline is not what was said by Shuttleworth. Shuttlworth said the bidding for IDCC got too expensive for Samsung not that the share price was too expensive.
update
Jimlur had contacted Shuttleworth about the bogus headline. Evidently Shuttleworth got right on it.
Thanks to your continued efforts. I am sure all posters appreciate your tenacity.
Here you go Jim.
Analyst Says InterDigital (IDCC) Shares 'Getting Too Expensive'
http://www.streetinsider.com/Analyst+Comments/Analyst+Says+InterDigital+(IDCC)+Shares+Getting+Too+Expensive/6731842.html
CAREFUL BOGUS HEADLINE
Shuttleworth did not say that IDCC's shares are getting too expensive. What he said was that the bidding war is getting too expensive for Samsung. Geez!!!!!
Of course this comes from Streetsider.com.
Analyst Says InterDigital (IDCC) Shares 'Getting Too Expensive'
Following a more than 50 percent surge in InterDigital shares since mid July on buyout rumors, Shuttleworth now argues "IDCC is getting too expensive." The analyst noted "reports from the Korean media that Samsung has announced that it is not interested in bidding for the InterDigital patents." Samsung apparently believes these patent plays have "become too costly after the Apple (Nasdaq: AAPL) consortium won the Nortel auction."
Still, Shuttleworth believes "multiple bidders remain..." including Apple, Qualcomm (Nasdaq: QCOM), Intel (Nasdaq: INTC), Google (Nasdaq: GOOG), Nokia (NYSE: NOK), Microsoft (Nasdaq: MSFT), RIM (Nasdaq: RIMM), Ericsson (Nasdaq: ERIC) and several others.
The firm currently values InterDigital at around $65.50 fundamentally, and at $118 over the next year.
M Partners maintains a Buy rating on shares of InterDigital.
My bad. 5 billion is correct.
The trading is evidence that some people just figured it out. Now the MM's will work to pin us at 65 but there may be too much pressure on the upside.
I thought I had read in one article that Samsung would go as high as 5 million, if memory serves. If Samsung is bowing out of the bidding then the bidding has eclipsed that level.
Been keeping the faith for over 10 years. Thanks for your reply.
DR...your statement..."I have a feeling we may all end up being surprised". Surprised on the high or low side in your opinion?
I think what we have here is all the option writers and shorts now have a drop dead date (Labor day) to hedge their positions. We will be volatile which is good for your trading shares.
Its an options week so our volatility will be high. 65, 67.5 and 70 will be in play the rest of the week.
Winners and losers in the Google-Motorola deal
reuters
On Monday August 15, 2011, 7:02 pm EDT
NEW YORK (Reuters) - Research in Motion and Microsoft Corp are emerging as potential winners after Google Inc said it would buy Motorola Mobility for $12.5 billion.
Potential losers include Motorola's handset rivals that partner with Google such as HTC Corp, Samsung Electronics and Sony Ericsson. These licensees of Google's Android software now face the risk promoting a direct rival.
If this tie-up irks manufacturers, companies with their own software such as Microsoft and RIM could gain as handset makers start to shy away from the Android system.
Meanwhile, the deal announced on Monday is unlikely to affect Apple Inc's quest for the hearts and minds of smartphone customers.
SAMSUNG, HTC, LG ELECTRONICS, SONY ERICSSON
Phone makers that partner with Google for its Android software officially said they welcomed the deal. But some analysts questioned their sincerity because their efforts to promote Android would now benefit a director competitor.
"Google is essentially granting most favored nation status on Motorola," said J. Gold Associates analyst and consultant Jack Gold.
MICROSOFT
Android handset makers may be more willing to take a gamble on the unpopular Windows phone as an alternative.
But the deal brings Microsoft directly into legal conflict with Google over Android patents, which may hamper its attempts to collect royalty payments from Android handset makers.
Microsoft and Motorola are already involved in a number of claims on each others' technology. Google's move to throw its weight behind Motorola will make for a tougher court battle for Microsoft.
NOKIA
Nokia's U.S.-listed shares rose more than 17 percent on Monday as Google's offer for Motorola rekindled speculation of a bid for the Finnish mobile phone company. Nokia did not comment on the buyout rumors.
Nokia decided earlier this year to go with Microsoft's Windows operating system instead of its MeeGo software, which is being phased out.
RESEARCH IN MOTION
Shares of BlackBerry maker Research In Motion rose more than 10 percent on the news.
Next year, RIM plans to move its BlackBerry smartphones onto the same QNX-based platform that runs the PlayBook.
An ever-tighter integration between Android and Motorola's hardware "may put additional pressure on the success of RIM's pending QNX Super phones strategy," RBC Capital Markets analyst Mike Abramsky wrote.
APPLE
Analysts said the deal does little to change the mobile landscape for Apple, given that Google failed to excite consumers when it entered the handset business by launching Nexus, a phone co-manufactured by the Taiwan-based HTC Corp.
The most obvious impact will be on the multiple patent infringement lawsuits that Apple has against Android handset makers. Also, Apple was already suing Motorola Mobility for patent infringement.
CABLE INDUSTRY
Google has long been seen as a threat to the traditional pay TV industry, first with YouTube and then with Google TV box. Neither have quite had the negative impact on the cable business that some had predicted.
With this deal, Google is set to become one of the pay-TV industry's largest suppliers. Even if physical set-top boxes go the way of the Walkman, Motorola's encryption and conditional access software will continue to be important.
Bernstein Research analyst Craig Moffett said "the cable industry would be delighted to see Google inside the tent, so to speak, of the traditional Pay TV model."
INTERDIGITAL
Shares of InterDigital Inc fell 18 percent after Google's bid for Motorola sparked worries that the search giant may no longer be interested in the company's wireless patent.
In July, InterDigital said it was looking at a possible sale of the company and the Wall Street Journal later reported that Google might be in the race for its patents. Analysts, however, said Google could still be interested in the patents.
(Reporting by Bill Rigby in Seattle, Alastair Sharp in Toronto, Poornima Gupta in San Francisco, Nicola Leske in Frankurt and Yinka Adegoke and Liana Baker in New York; Editing by Robert MacMillan, Matthew Lewis and Richard Chang)