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Closing the GAP.
Data, I was wondering about this earlier. Didn't IDCC have, as part of the partnership with IFX, and agreement not to also work with another chipmaker to develop WCDMA? I don't recall the details and I certainly wouldn't understand it like you do anyway. TIA
revlis, I made my comment based on excerpts from the contract that were posted yeaterday. I just went back and read the original document (not in it's entirety) to check myself. I will agree I overstated but there still may be some truth in what I posted, I believe. However, I realize I should have read all of the contract before making my statement.
"4.3 Jointly Developed Intellectual Property Rights.
4.3.1
InterDigital shall have the primary responsibility for preparing and filing patent applications for all jointly Developed Intellectual Property Rights, pursuing issuance of such patents, and maintaining such patents after issuance. If Spreadtrum elects not to jointly file any patent application filed by InterDigital on any jointly Developed Intellectual Property Rights, InterDigital will bear all of the cost related to such filing (and all the actions related to such patent application, including but not limited to the patent maintenance) and furthermore InterDigital shall grant Spreadtrum a perpetual, worldwide, irrevocable royalty-free license, without right to sublicense, to such Jointly Developed Intellectual Property Rights.
jai, I couldn't agree with you more. When you consider the following points, I can see many reasons for both China and IDCC to keep this under wraps as long as possible.
*IDCC has entered into a joint venture with a specific Chinese manufacturer, to develop the needed technology to make proprietary baseband chips for the TD-CDMA market work.
*IDCC will apparently be getting some consideration for that work up front
*IDCC will own that technology to license to and collect royalties from to all other users besides SPRD
*The likelihood that many patents originating from the joint venture will be adopted as part of the TD-CDMA standard is very high, (IMO).
I say this because China appears very intent on owning as much of their "home grown" technology as possible, apparently to eliminate the payment of licensing fees. The more parts of the technology that their own nationally based baseband supplier has royalty free, the better they have achieved that goal. With this in mind, what do we think are the chances that SPRD's chips will be favored, at least by other Chinese manufacturers, over all the others, (assuming that they work well)? IF the co-developed technology is adopted as part of the standard, will not all other manufacturers have to go through IDCC for the use of that? We do not know the true extent of the agreement between IDCC and SPRD but if the above scenario is close this potentially could be absolutely HUGE for IDCC some time in the future and I applaud IDCC for the arrangement.
Revlis, I'm sorry but I wasn't clear in my post.
The collecting of royalties I meant to refer to was royalty obligations from other manufacturers, aside from SPRD, selling TD-SCDMA products. IMO, for IDCC, this would especially be true concerning manufacturers such as NOK and Samsung, Sony-Ericson. Additional, how does this position IDCC against Q and it's demands for IPR payment in China? Would they not have to either pay royalties themselves for any of this "homegrown" technology or cross license? What do you think are the chances that this "homegrown" technology will be accepted into the TD-SCDMA standard? Hmmnn? Does this not fit right into what appears to be China's strategy to avoid paying IPR?
The reason that spreadtrum is down so dramatically may be hidden in the article you posted mschere. As one of the underwriters, Lehman Brothers, has been in some trouble lately and may be having to put some of it's assets on a fire sale to raise capital. There's no doubt that the delay in TD-SCDMA has hurt SPRD and it's earnings, and that may possibly be hurting their ability to raise more capital, but the article that gio first posted may have been a year too early. It's possible that SPRD could be a hell of a buy. I also think that the rights to the IP that IDCC gains from the jpointly developed technology could pay huge dividends in the future. This obviously, IMO, was a deal that was blessed by the People's Republic. I have the idea that, in the future, IDCC may have some political backing from there if future IP user don't pony up the royalties that would be due. At the same time, SPRD is protected from having to pay anything, one of the goals of China for their "home grown" industries. This, in some ways puts IDCC perpendicular to Q and in a quite strong position in regards to the Chinese TD-SCDMA market. IMO.
Which Elite Group it is that is licensed with IDCC will be important. One of the two, EliteGroup ESC has just secured a substantial contract with Walmart that is amounting to 40 -50,000 laptops a month.
http://www.theinquirer.net/en/inquirer/news/2004/07/14/elitegroup-wins-giant--notebook-order-from-wal-mart
As olddog pointed out though, it does not seem to match up with a Hong Kong based Giant Electronics, part of an Elite Groups.
http://www.elitecorp.com/html/info.php?target=elitesubsidiaries
12bees, thanks eom
The streaming quotes on Scottrade show that IDCC traded 164,000 shares in the last minutes of trading Friday. I did not notice anyone commenting on that since. More noteworthy was that PANL showed 520,000 shares traded in the last minute Friday with almost no change in share price. Can anyone venture a guess as to why such a phenomenon occurred for these two stocks?
Jeffree, that is interesting how the price has stayed in a very tight range all the while, the other indicators continue to decline. I would not want to be buying that stock right now because it sure looks like when the sellers run out, that stock is going to retreat. Perhaps there is a new group of shorts that is going to take advantage of the losers.
There's been some pretty serious selling into buyers who keep taking all they'll sell over the last 45 minutes or so. I hope they can keep it up!
delete, duplicate
Somebody just dumped about 50,000 shares. So far price still seems to be holding up pretty good
Lets hope that this afternoons rally keeps it up. If the DOW closes somewhere near the open or higher, we will have a nice reversal pattern forming. The perfect setup for good news (or even if not) next week.
So much for holding at 11634. Still hoping for a rebound today though. Next is 11577 monthly 50MA.
11634 was the low the DOW hit in January. Obviously, we have already dropped below the 200 MA. I would expect, again perhaps temporarily, some support there. We'll see. No doubt there is significant market weakness.
dmiller, technically, the indicators would favor your belief. That's the reason I used the words "hope" and "temporary" in my post. If the market does not find support in this area, IMO, it will probably fall significantly farther.
I'm hoping for a rebound in the DOW today. It hit to within 2 points of its weekly 200 MA just after the open. That should give some temporary support to the overall market at least.
lastchoice, want to elaborate?
Wow olddog! That's pretty good. NOK first declared in the UK court that it DID NOT have a license for ANY IDCC technology and now is claiming that they ARE licensed. Which is it? It seems to me that that creates a problem for their claim that they don't owe IDCC anything because of the connection to the TDD development work and that they have a right to arbitration. Do I have that wrong?
Thank you dmiller. I did mean overbought.
Neoinvestor, I agree. IDCC is very oversold and at SOME POINT, it will make a correction, that is of course barring news, that keeps it going up. However, in the long term, right now, IDCC is developing at lot of fundamental reasons for holding up. When it does correct, I tend to think that it will pull back just enough to shake out some of the traders and then find support to start forming a strong base while waiting for more good news
Looking at IDCC's chart, it is on a tear. And with good reason. However, whenever there is a very strong uptrend, at some point, barring strong supporting news and fundamentals, the price will make a correction. If the DOW does continue to fall, technically, IDCC could be ready to correct somewhat. Clay, the guy that has posted some great technical charts, has shown what a awesome uptrend IDCC has been in. Below is a 1 year chart that, depending on how you connect the points in the uptrend, it either shows IDCC is in a nice uptrending channel or is reaching to top of an ascending triangle. Ascending triangle generally favor a reversal if the price falls below the bottom line of the formation. If it does not, the uptrend channel would be favored to continue. If it does fall below and reverses, I would look for te stock to find support in the 25.50 range where a support line is roughly coinciding with the 20 EMA or, if not there because of a downdraft from the rest of the market, the 23.22 range that is again somewhat coinciding with the 50 MA.
one year chart:
http://stockcharts.com/h-sc/ui?s=IDCC&p=D&yr=1&mn=0&dy=0&id=p12577610469&a=100937499&listNum=1
In this 10 year monthly chart, you can see that the green lines represent an uptrend channel within a larger, longer term trend. If the DOW rallys from here, I could see it reaching the longer trend line. A couple of things that favor a reversal and rally from here is the fact that on the 10 year monthly chart, the DOW is oversold and near reaching another longer term support line. Again, this support line is roughly coinciding with the weekly 200 MA which also should provide support.
10 yr monthly DOW chart:
http://stockcharts.com/h-sc/ui?s=$INDU&p=M&yr=10&mn=6&dy=0&id=p75187622906&a=123075954&listNum=1
frobinso, the over all market, especially the DOW is at a tipping point right now technically, and there are a lot of traders/investors that are watching very closely, with many making there bets now. If you look at a little longer term chart, you will see the DOW,( the NAZ chart follows fairly closely )is falling again below a long term support line.
Twice this year the DOW has pulled back above this point but now the support line is coinciding with a long term uptrend line that goes back about 4 years. In the chart I have linked below, you will also see there was a little bit longer 5 yr trend line that, when it was broken, it was just after it had completed a head and shoulders formation. Normally, a H&S formation calls for a drop of an amount that is about the same as the distance between the neck line and the top of the head. That is exactly what it did and then the market came back up and rode the bottom of the 5 year trend line until it reversed again when it met resistance from the downtrend line beginning to form from the top of the H&S to the top of the right shoulder. It is now where it has just fallen below that support line and has met with the 4 yr up trend line. IF IT FAILS TO HOLD, IT WILL COMPLETE ANOTHER, LARGER H&S FORMATION! If it does, the drop could be dramatically more than the last one! If one looks at the other indicators such as RSI and Money Flow, they are confirming the price chart. Volume is heavy on the selling periods and lighter on the buying. MACD has just crossed to the negative side. If the DOW price direction changes and holds up to rally from this point, like it has done previously, it will be good. I will post another 10 year chart in my nesxt post to show where the market could go if it survives this crucial point. It needs to hold though. The ten year chart gives a more positive view somewhat since it can be seen that we are also at another support line that roughly coincides with the weekly 200 MA.
Five year chart:
http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=5&mn=6&dy=0&id=p54004454666&a=114447419&listNum=1
Do you have any insider information? How do you know that IDCC's buying hasn't been a factor in the recent run up and isn't buying today? I think the way the share price held after the opening selling, especially considering the rest of the market, is quite impressive. JMO
The Dow has fallen out of it's uptrend channel. It could be ugly today.
See chart:
http://stockcharts.com/h-sc/ui?s=$indu&p=D&yr=0&mn=6&dy=0&id=p45818562146&a=52254350&listNum=1
If there was ever a day when it would be very good for IDCC to release a major announcement, today would be the day. Besides the normal jump in share price, with options expiration happening, those having to cover naked calls sold would jump to buy as well. The shorts would have the decision to either try to compete for shares or wait with hope against hope that somehow the other shorts would also be waiting and somehow the share price would come back down to a lower level after the pop up. This would be with the knowledge that there could soon be another major announcement that would act as a rocket booster.
It would be nice to win the lottery today as well. LOL
Thanks olddog. It doesn't surprise me you came up with "the rest of the story"! I mentioned $240 million because that was the figure given in the article posted earlier. Apparently it was misleading.
My question is: since the crooked lawyers,(I apologize for the redundancy - LOL) got away with $240 million in ill gotten fees, why did they only get fined $75 million?! Boy, I'd like to see what it would cost them after it went before a jury in a class action suit. Unfortunately, there's probably not a lawyer that would take the case because of the backlash they would suffer from their fellows. It's the reason white collar crime will always continue. It's profitable even when you get caught!! Judges, probably because of the political connections of the defendants, levy relative slaps on the wrist where the convicted individual gets out of the federal penitentiary on early release for good behavior, (if he gets jail time at all) and goes on from there to live well off the money that he squirreled away. (Not counting the additional payoffs he gets from the other offending parties for not fingering them as well) We will forever continue to have Enrons, HealthSouths, Crooked politicians etc. as long as judges give these scumbags special treatment. It makes you want to puke!
PS: to the board legal specialists: I apologize for the slight to the profession. I know the good guys have no responsibility for the one's that continue to keep the reputation of the practice where it is.
http://en.wikipedia.org/wiki/Dark_pools_of_liquidity
http://www.advancedtrading.com/directories/darkpool/
http://money.cnn.com/news/newsfeeds/articles/djf500/200806131233DOWJONESDJONLINE000741_FORTUNE5.htm
http://www.advancedtrading.com/crossingnetworks/showArticle.jhtml?articleID=196800833
http://www.tradersmagazine.com/news/100351-1.html
http://www.iht.com/articles/2006/12/04/bloomberg/bxexchange.php
It's been said here before that when board members start getting testy with each other, good things happen very soon after. My observation has been that it does seem true. I'm getting exited as I read these postings! Yeeeehaa!
Rich, good story and one I was not aware of. Regardless of the reason, it very much added to the mistique and enhanced the reputation of Coors beer. During that time, virtually everyone would tell you that Coors was the best beer on the market. After sales of Coors east of the Mississippi started, consumers eventually began to view Coors as really no different than any other beer.
With emphasis: "and expect that we will announce a design win in the first half of 2008.”
Catchnrel, I'll take a stab at that.
There are two possible motivations for Apple, IMO. One might be a part of an agreement with AT&T for their support given to the launch of the Iphone-1; a partnership, so to speak.
The other is a marketing ploy. Back in the 70's, Coors beer was not sold east of the Mississippi river. Coors said it was because of their practice of always keeping the beer refrigerated from the time it was brewed, to maintain it's freshness. Whatever the reason, if you lived in the east, Coors beer was THE beer and it demanded a real premium in price. I personally was involved in traveling west, like other entrepreneurs, to buy the beer and take it back to sell for a profit. The situation was the basis for the movie "Smokey and the Bandit". (and NO, I'm not Burt Reynolds! ...LOL) IMO, Steve Jobs has done the same thing. By limiting the availability of the Iphone, it's very scarcity has been the thing that has helped create the huge pent up demand.
"Though I'm impressed overall with a lot of what Apple is doing with iPhone 3g, one thing that baffles me about their strategy is the continued exclusive for AT&T in the domestic market."
dmiller, a discussion about what motivates the shorts, under the circumstances, would be worthwhile, IMO.
We are in a strong resistance point range and we are over bought with the market weakening. We currently are 45% over our price of less than 2 months ago and so some profit taking would be expected. Additionally, it is normal for IDCC's share price to drop after the ASM. All this would be strong motivation to bet on the price of IDCC stock to decline.
Yet, the price and technicals remain pretty strong (so far). Reposting a reply to this subject I left on AB's:
"Short interest back up over 7.1 million shares
That is very interesting considering the recent consistent rise in IDCC share price.
By my calculations and similar to the recent articles on short sqeeze candidates posted, that is over 16% of the 44 million float that is short. There are many here that have theorized that the price rise was, in part, fueled by short covering, yet the short interest remains VERY high. Unless the bulk of the current short sales were made nearly a year ago, the shorts are either under water or very near it. Any additional rise in price puts more pressure on the shorts to cover and minimize their losses. Even without NOK and Samsung, its evident that with the growth of smart phone sales by IDCC licensees and the adoption of IFX chips by phone mfrs, IDCC's bottom line and earnings are set to grow. If that is not yet known by the investing public, it soon will be. There should be a corresponding additional rise in buying pressure
It is said that prices in stock rise and fall due to and imbalance in supply and demand. When prices rise, it is due to a shortage of shares available for sale. One would think that a fair percentage of the shares sold during the rise in price were short sales. Normally, one would think that when that many borrowed shares are sold into the buying, the buying pressure would abate and the direction of the price would reverse. This has not yet occurred. The question is; at what point do the shorts quit selling and start buying and what will that do to the balance of sellers and buyers?
It seems IDCC shareholders are sitting on a veritable powder keg. If we get any significant good news at these or higher price levels, it could be a hell of a lot of fun!"
Since I made that post, I have considered that there are at least some of the shorts that have hedged their bets by buying call options and some of those may even be in positive money, despite the high premiums IDCC calls are fetching. Certainly most are not hedged though since I don't believe there have been near enough calls sold to cover 7.1 million short shares. Additionally, unless enough profit taking occurs, the shorts may have to add to their short position to push the price back down. With IDCC's stock repurchase plan still working, that is getting tougher by the day. Any hedges against a short position continues to be more expensive, relative to the price less than two months ago.
I'd like to hear others comments about this situation but IMO, the situation is getting somewhat tenuous for the shorts. If the shorts are "not afraid" right now, with any kind of real news, (a very distinct possibility) I think that situation could change rather quickly.
DR, thank you. Good article.
Data_Rox, for clarity, I was wondering how important HSUPA was when using a cellphone. I can see where HSDPA was important in order to download a lot of material but would there be many cases where you would be sending large blocks of data from a phone? Even if you were, it doesn't seem like it would be as annoying as it would be to wait for data to download before you could use it. When sending, you wouldn't be as constrained, it seems to me. I do of course see where it would be much more important in the case of a laptop. TIA
Your right Bull. Additionally, if we do get into one of the well known computer mfr's devices, the recognition could help have others adopt IDCC as well.
Badgerkid, I, like you, would not be surprised to see IDCC announce Apple as the co that they have their design win with though, if it is, I think it will be in an Apple computer of some sort rather than the iphone. For IDCC to announce a design win "in the first half of 2008", there is very little time left for that to happen; less than 30 days.
Surely the shorts can see, not just by the strength of the share price but also because of the converging clouds preceding a potential "perfect storm" to drive up the price of IDCC's shares.
* Potential for IDCC to announce additional licencing revenues due to 3G iphone.
* Potential for announcement of specific computer mfr to announce SlimChip design win.
* Potential for favorable ruling from Samsung arbitration
* Potential for Samsung negotiated settlement soon.
* Potential for increasing revenues due to royalties/licensing fees from chip manufactures, especially IFX
* Potential increase in revenues from licensing from growth of smart phone manufacturers. etc..
Realistically, what do the shorts have to look forward to in terms of additional profit from shorting IDCC? (unless its to drive down the price in preparation for a buyout bid.) There has got to be better candidates that don't have IDCC's risk factor