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Surf,
So, is the implication of the table that these people/entities simply made major purchases at the IPO? Or are you implying a major degree of control over the company, or what?
Steve
Interesting guide to natural gas investing for newbies like me:
http://seekingalpha.com/article/274272-the-ultimate-guide-to-natural-gas-investing?source=yahoo
"The Ultimate Guide to Natural Gas Investing"
Of course now they have denied putting themselves up for sale. It will be interesting to see whether the offers come in anyway. For the right offer, I'm gone.
Disclosure: Long ITMN and in at $10.11
Does anyone have any comment on ITMN putting itself up for sale vis Goldman Sachs?
If I may be so bold as to ask, what is everyones' price target on SD and in what timeframe? To kick it off, I'm in at $6.52 and am looking for $20 by 12/31/11, though I may opt to hold it longer even if that target is reached.
Jim,
Is it possible IDCC will try to buy the wireless component of the portfolio ITSELF, while the other partners go for the five (or less than five) other segments of the entire NT portfolio of patents?
Steve
Broke $13 but slipped back a bit before getting above $13. For a while I had a one-bagger there at $13.04.
M3S, Since you sold your Nokia stock and some have suggested Nokia as a possible buyer of the IDCC "mother of all call options":
"S&P Downgrades Nokia Because Its Marketshare Is Going South
Pascal-Emmanuel Gobry | Mar. 31, 2011, 3:25 AM | 475 | comment
S&P just downgraded Nokia's rating to A-, saying its marketshare and operating margins are going down, Bloomberg reports. Nokia had held an A rating since 1998, so this is a pretty big deal.
The market has reacted pretty negatively so far to Nokia's move to Windows Phone 7, with the stock tanking and CDS spreads rising. Another less reported story is the fact that Nokia, usually dominant in the dumbphone/featurephone category, is being eaten alive by Chinese upstarts making cheaper handsets, which is putting huge pressure on margins.
While the question of whether Nokia can build a strong smartphone platform with Windows is crucial for Nokia's long term success, what's crushing their P&L now and short term is this undercutting. Nokia's key competitive advantage, most often touted, is its huge global marketshare and distribution network. The idea is that thanks to this, it can come from behind once it has smartphones that can rival the iPhone and Android. But if that gets squeezed by Chinese upstarts, then Nokia is really doomed."
Source: http://www.businessinsider.com/nokia-downgrade-2011-3?utm_source=Triggermail&utm_medium=email&utm_term=10+Things+In+Tech+You+Need+To+Know&utm_campaign=10ThingsTech_NL_033111
Any reason for the 2.4% increase today?
Another nice day!
Cat, OK, I'm putting in my limit order now (just kidding). Steve
To change the subject, I just noted our friends at Nokia got an upgrade from goldman-Sachs. I guess the Billion Euros in cost savings they expect to get will be by infringing on IDCC IP again (like that's possible). Maybe they'll start selling our IP.
Source: http://www.marketwatch.com/story/alcatel-lucent-lifted-to-buy-from-neutral-goldman-2011-03-28
"Alcatel-Lucent, Nokia climb on upgrade. Shares of Alcatel-Lucent (ALU) and Nokia (NOK) are both posting solid gains this morning after getting upgraded by Goldman Sachs. Alcatel-Lucent was raised to Buy from Neutral, with analysts saying "we now believe that profits from the company's structurally attractive growing businesses are poised to overtake declining legacy profits," creating "46% upside potential." Analysts expect Alcatel to sustain high-single-digit earnings margin (before interest and taxation) from 2012. Goldman said Nokia, also raised to Buy from Neutral, provides long-term opportunity for value investors after falling around 30% since February. Nokia's new strategy "is appropriate and creates the potential for €1B or more in cost reduction." Premarket: ALU +6.7%, NOK +3.35% (7:00 ET).
Cat,
Do you see $60 as a reasonable prospect now? What would be a reasonable P/E for a firm like SD and what do you see the earnings reaching? Would $60 require "irrational exuberence?"
Steve
Guys,
I just hadn't seen it posted yet so I thought I would call it to your attention. I'm still purely long SD. In at $6.52 and looking for at least a two-bagger by EOY.
Steve
This is in the FWIW category:
Source: http://www.networkworld.com/news/2011/032411-ctia-nokia-windows-phone7.html?source=NWWNLE_nlt_daily_pm_2011-03-24
"Nokia looks to make Windows Phone 7 hottest mobile OS on the planet
Nokia fully expects, and plans, to do what Microsoft and its handset partners have so far been unable to do: make Windows Phone 7 a must-have mobile platform.
Hot technology at the annual CTIA wireless show
Nokia is in a unique relationship with Microsoft, contributing a range of its own assets, ranging from global scale, distribution, marketing and retail expertise to online services such as Ovi Maps and slick turn-by-turn navigation. That, combined with Microsoft experience as a platform vendor, and the strengths of the radically redesigned mobile UI, will "move the needle," says Kai Öistamo, Nokia executive vice president and chief development officer.
To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.
Nokia fully expects, and plans, to do what Microsoft and its handset partners have so far been unable to do: make Windows Phone 7 a must-have mobile platform.
Hot technology at the annual CTIA wireless show
Nokia is in a unique relationship with Microsoft, contributing a range of its own assets, ranging from global scale, distribution, marketing and retail expertise to online services such as Ovi Maps and slick turn-by-turn navigation. That, combined with Microsoft experience as a platform vendor, and the strengths of the radically redesigned mobile UI, will "move the needle," says Kai Öistamo, Nokia executive vice president and chief development officer.
ANALYSIS: Both Nokia, Microsoft have much to gain, and lose, in mobile deal
Nokia, which has a small market share in the United States, had a more visible presence at this week's CTIA Wireless conference in Orlando, with a booth on the show floor and an announcement at the show by T-Mobile about a sleek new smartphone, the Nokia Astound. The new phone may be among the last to run a version of Nokia's trademark Symbian mobile OS, and a harbinger of what users can expect in a Nokia-branded Windows Phone.
That's because in February, Nokia and Microsoft announced a wide and deep alliance around Windows Phone 7.
The handset maker, which has been struggling in the past three years in the exploding smartphone market, chose the Microsoft OS as the firmware for all future Nokia smartphones. To do so, Nokia will pay Microsoft a licensing fee.
But Nokia's relationship with Microsoft is different from the other Windows Phone licensees, who launched the first crop of handsets, HTC, LG, and Samsung. Nokia alone has the right to customize the Windows Phone UI. Neither Microsoft nor Nokia has gone into detail about what that means.
But according to Öistamo, it means that Nokia is going to be very careful that any changes will not break Windows Phone applications or disrupt the development environment for programmers.
"Even if we have the right to change it, it would be unwise to change it in ways that cause problems," he says. Instead, Nokia plans to exploit the underlying OS to leverage both on-device features and a range of Nokia services: imaging, cameras, maps and navigation, to name just a few. Many of these changes, as well as the services themselves, are intended to flow back into the Windows Phone platform, to become accessible to developers.
Windows Phone 7 creates an opportunity for Nokia to add value to the mobile platform, whereas that would not be the case with Google Android, Öistamo says. For example, Nokia's navigation and mapping services would be in direct conflict with Google's similar offering. "We asked 'what is the value [to be added]?'" he says. "That's what you get paid for."
"We are contributing mapping and other assets across Microsoft," Öistamo says. "We get rewarded for that."
Another revenue opportunity is exploiting the two companies' combined assets to create new revenue sources. Öistamo cites the example of Nokia's mapping technology married with Microsoft's Bing search engine to create highly local and specific advertising impressions.
§
Excerpted from Nokia looks to make Windows Phone 7 hottest mobile OS on the planet
http://www.networkworld.com/news/2011/032411-ctia-nokia-windows-phone7.html?source=NWWNLE_nlt_daily_pm_2011-03-24"
Thought this observation on an options play on SD might be of interest.
Steve
"Thursday Options Brief: SFD, SD, CBS & BMTI
by: Andrew Wilkinson March 24, 2011 | about: BMTI, CBS, SD, SFD
(snip)
SandRidge Energy, Inc. (SD) – A large three-legged options combination play on SandRidge Energy appears to be the work of an investor expecting the price of the underlying to pull back from today’s new highs. The natural gas and oil producer’s shares rose 4.35% this afternoon, peaking at an intraday- and new 52-week high of $11.98. The pessimistic player traded a total of 50,000 options on SD, most of them puts, which position him to make money if shares reverse course ahead of September expiration. It looks like the investor sold 10,000 calls at the September $14 strike for a premium of $0.94 each in order to partially finance the purchase of the 20,000-lot September $9.0/$11 put spread for a net premium of $0.74 each. Premium received on the sale of the call options reduces the cost of the bear put spread to around a net cost of $0.37 per contract. Thus, the investor stands prepared to profit should shares in SandRidge fall 11.3% to breach the effective breakeven price on the spread at $10.63 by September expiration day. Maximum potential profits of $1.63 per contract are available to the three-legged bear if SandRidge’s shares plunge 24.9% from today’s high of $11.98 to trade below $9.00 within the next six months to expiration. The short calls at the September $14 strike expose the investor to potentially devastating losses in the event of a sharp move higher in SD shares unless the three-legged play was initiated to hedge a long position, and those short calls are covered. SandRidge Energy, Inc. reports first-quarter earnings after the closing bell on May 5, 2011. "
Source:
http://seekingalpha.com/article/260027-thursday-options-brief-sfd-sd-cbs-bmti?source=yahoo
Bull, No problem. Steve
Bull,
The discussions of validity were several months ago. Since several posters had more recently been suggesting going after Nokia, Ericsson, Motorola etc. using IDCCs improved patents, even perhaps before a CAFC decision, I thought the arguments regarding Microsoft and i4i might be of potential interest. In no way am I (a long, who has never sold any IDCC shares I've acquired) doubting our patents' validity.
Steve
Given earlier discussions here on the validity of IDCC patents at issue with Nokia, I thought this might be of interest.
"US government sides against Microsoft in Supreme Court patent case
Oral arguments to begin on April 18 with technology companies rallying behind Microsoft in hopes of software patent reform, and government, science and venture capitalists siding with i4i
By Julie Bort, Network World
March 21, 2011 04:28 PM ET
Sponsored by:
The U.S. government itself has come out against Microsoft in a Supreme Court case that may decide the way patents are protected.
The U.S. solicitor general, which represents the federal government in the highest court, on Friday filed an amicus brief in support of i4i, saying that the U.S. Patent and Trademark Office should not be second-guessed by a jury.
Indeed, i4i, which won a $290 million patent judgment against Microsoft, has now accrued 22 amicus briefs in its corner, which represent more than 100 companies, organizations and individuals, including the U.S. government, individuals from the military, and venture capitalists. Compare that to Microsoft's 20 amicus briefs, which represent about 60 companies and individuals, including Google, Apple, Cisco, Intel, Red Hat, the Electronic Frontier Foundation and 37 law and economics professors.
To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.
The U.S. government itself has come out against Microsoft in a Supreme Court case that may decide the way patents are protected.
The U.S. solicitor general, which represents the federal government in the highest court, on Friday filed an amicus brief in support of i4i, saying that the U.S. Patent and Trademark Office should not be second-guessed by a jury.
Indeed, i4i, which won a $290 million patent judgment against Microsoft, has now accrued 22 amicus briefs in its corner, which represent more than 100 companies, organizations and individuals, including the U.S. government, individuals from the military, and venture capitalists. Compare that to Microsoft's 20 amicus briefs, which represent about 60 companies and individuals, including Google, Apple, Cisco, Intel, Red Hat, the Electronic Frontier Foundation and 37 law and economics professors.
STRANGE BEDFELLOWS: Red Hat defends Microsoft in i4i patent dispute
Additionally, IBM and five others have weighed in with opinions on the case via amicus briefs but have not offered support for either party in this case, offering opinions for the Supreme Court to consider before it rules. That ruling is expected in June, with oral arguments slated to begin on April 18.
The Microsoft vs. i4i patent case has become the new rallying point among those that want to see software patent reform, including open source advocates. The technology industry is generally lining up in favor of Microsoft (making for some strange bedfellows defending Microsoft, such as Red Hat). In i4i's corner are representatives from an impressive array of other fields particularly from science, university research, military and the government -- even the U.S. Patent and Trademark Office itself.
Ideally, it should be Congress that tackles the issue of a software patent system run amok, but session after session passes with no real fix. Those wanting software patent reform claim the USPTO frequently issues so-called "bad" patents for software, meaning patents for software "business processes" that don't meet the statutory standard for a patent. Because a software patent can cover a wide variety of how the business process is implemented, discovering all the appropriate existing patents when applying for new ones (known as "prior art") is difficult, expensive and inconclusive.
At issue in Microsoft v. i4i Limited Partnership, according to the Supreme Court blog, is how much proof someone must come up with to prove that a patent is invalid. "Someone charged with violating a patent can avoid liability by showing that the patent is invalid (meaning that the invention does not meet the statutory criteria for obtaining a patent). The question is whether that invalidity must be proven by clear and convincing evidence," the blog states.
Microsoft and its supporters are arguing that the "clear and convincing" standard inordinately raises the burden of proof to invalidate a "bad" patent. They are advocating a standard known as a "preponderance of the evidence" which could ask the jury to consider more heavily evidence of prior art that the USPTO did not consider when granting the original patent.
David Howard, Microsoft's corporate vice president and deputy general counsel for litigation, explains:
"This case can be summed up in one word -- balance. The current approach taken by the Court of Appeals improperly tilts the scales to reward invalid patents. That approach needs to be corrected in favor of a system that ensures the process for obtaining and defending patents is clear, reasonable and doesn't unduly burden the system or innovation. When a patent issues, despite the fact that the Patent Office never had an opportunity to review the relevant prior technology, it enables the holders of those dubious patents to attack innovative companies with costly lawsuits. We believe a better balance will benefit all patent holders and innovators."
i4i's supporters say if that standard is not upheld, it lowers the burden of proof to invalidate a "good" patent. i4i obtained a big feather in its cap when the federal government officially came down in favor of the i4i argument. The amicus brief from the U.S. solicitor general says that the USPTO can be trusted to be the expert, over a jury:
"The clear-and-convincing-evidence standard also furthers the reliance interests created by a patent grant by affording the patent holder enhanced protection against an erroneous jury finding of invalidity. By allowing a lay jury to second-guess the PTO's judgment even in close cases, the preponderance standard would diminish the expected value of patents and would reduce future inventors' incentives to innovate and to disclose their inventions to the public."
This counters arguments made on behalf of Microsoft such as this one from the amicus brief filed by the Computer and Communications Industry Association:
"By making questionable patents hard to invalidate, the clear-and-convincing standard creates an artificial incentive to apply for patents. It induces more applications and more patents, especially weak, marginal, and invalid patents." [PDF]
MORE MICROSOFT NEWS, BLOGS: Microsoft Subnet
It has been almost two years since i4i won its $290 million judgment against Microsoft. i4i claimed that Word's custom XML feature violated i4i's patent on the technology. But more important than the money, the ruling took the almost unheard-of step of issuing a permanent injunction that stopped Microsoft from selling copies of Word that used the disputed XML technology. This affected Word 2007, Word 2003 and Word for Mac 2008. That injunction took effect on Jan. 11, 2010, and all legal attempts to get it overturned failed. Microsoft has since removed the disputed XML technology from affected editions of Word that are still available for sale (Word 2007). In November, the Supreme Court agreed to hear the case.
i4i is not a so-called patent troll, meaning that the company didn't buy the patent in order to shake down others for infringing on it. The company's current CEO, Michel Vulpe, and Stephen Owens filed for the patent in 1994 and it was awarded in 1998 (patent No. 5,787,449). It covers a process that makes it possible for computer users to use regular word processors as XML/SGML editors. On the other hand, just because i4i came by this patent in earnest, doesn't mean it isn't the kind of "bad" software patent that has turned software patents into a mockery.
Microsoft has tried various methods of getting i4i's patent invalidated, to no avail. Microsoft has twice sought an administrative reexamination by the USPTO of the patent, and the USPTO upheld its validity both times.
Hope that the Supreme Court would end the software patent problem had previously been put on the Bilski case, which could have all but eliminated the problem if the Supreme Court had issued a ruling that made "business process" patents difficult or impossible to obtain. Most software patents fall into the "business process" category. The Supreme Court's ruling on Bilski, however, managed to sidestep that issue and create more confusion, not less.
Julie Bort writes the Microsoft Update and Source Seeker blogs for Network World's Microsoft Subnet and Open Source Subnet community sites. Follow Bort on Twitter @Julie188."
http://www.networkworld.com/cgi-bin/mailto/x.cgi?pagetosend=/news/2011/032111-microsoft-i4i-patent.html&pagename=/news/2011/032111-microsoft-i4i-patent.html&pageurl=http://www.networkworld.com/news/2011/032111-microsoft-i4i-patent.html&site=software&nsdr=n
In regard to the Japanese licensees, their sales of phones and the revenue ultimately going to IDCC: Like many Japanese-name electronic components, aren't many of the "Japanese" cell phones produced in such other countries as China as part of their efforts to lower costs to compete with other makers? If so, would not much of the production be unaffected, other than components produced in earthquake or Tsunami-affected areas of Japan?
Steve
Discovery Labs Announces Quarterly Business Update Conference Call
Press Release Source: Discovery Laboratories, Inc. On Thursday March 10, 2011, 8:00 am EST
WARRINGTON, Pa., March 10, 2011 (GLOBE NEWSWIRE) -- Discovery Laboratories, Inc. (Nasdaq:DSCO - News) will be hosting a conference call on Tuesday, March 22, 2011, at 10:00 AM EDT. Management will provide a business update primarily addressing:
* Status of the program to gain FDA approval for Surfaxin(R) for the prevention of respiratory distress syndrome (RDS) in premature infants
* Financial overview including results for the fourth quarter and the year ended 2010
Participants are encouraged to access this audio webcast through a live broadcast on the Company's website at www.discoverylabs.com. It is recommended that participants log onto the audio webcast at least 15 minutes prior to the call. The Internet broadcast will be available for up to 90 days after the call at the Company's website.
The call in number is 866-332-5218. The international call in number is 706-679-3237. A replay of the conference call will be available two hours after the call's completion and remain available through March 29, 2011. The replay number to hear the conference call is 800-642-1687 or 706-645-9291. The passcode is 51155817.
Source:
http://biz.yahoo.com/pz/110310/215887.html?.v=1
Dave,
Thank you for that post.
Steve
This stock must have driven many investors crazy.
I picked up my shares at $10.11 after the negative FDA decision. Figured it had potential based on European approval. Up 340 percent as of close 3/8/11. Now if I could just get more of my stocks to do this....
http://biz.yahoo.com/e/110309/itmn10-k.html
"Form 10-K for INTERMUNE INC
9-Mar-2011
Annual Report
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
For a concise overview of information relating to our business, including Actimmune and our product development programs, please see the discussion in "Item 1. Business - Overview."
Pirfenidone (Esbriet ?)
Pirfenidone is an orally active, small molecule compound under development for the treatment of idiopathic pulmonary fibrosis. In March 2011, pirfenidone was granted marketing authorization for commercial use in the European Union for the treatment of mild to moderate IPF following the adoption of a positive opinion by the CHMP of the EMA. We are currently evaluating our clinical development options to gain approval of pirfenidone for commercial use within the United States and have plans to begin a new Phase 3 clinical study in the first half of 2011. Pirfenidone may also prove effective in multiple fibrotic indications including Hermansky-Pudlak Syndrome, a fatal, fibrotic lung disease believed to be caused by genetic factors. In vitro experiments show that pirfenidone inhibits collagen synthesis, down-regulates profibrotic and proinflammatory cytokines and decreases fibroblast proliferation and stimulation in response to cytokines.
To support our anticipated commercialization efforts of Esbriet in Europe, we are currently investing in the establishment of a commercial infrastructure within the European Union, including an increase to our employee headcount in that region. On December 17, 2010, we announced several additions to our senior leadership team in support of our commercialization efforts as well as announcing the establishment of our European headquarters in Reinach, Switzerland. In December 2010, we transferred all of our non-U.S. rights to research, develop and commercialize pirfenidone for IPF to our wholly-owned Swiss subsidiary, InterMune International AG. Based on our current intellectual property portfolio, we expect to have exclusive rights to sell pirfenidone within the European Union through 2030.
Sale of Danoprevir Rights to Roche
In October 2006, we entered into a collaboration agreement with Roche, subsequently amended, to develop and commercialize products from our HCV protease inhibitor program, including danoprevir. Pursuant to our collaboration with Roche, we had successfully progressed the danoprevir compound from pre-clinical testing into Phase 2b clinical development with generally positive clinical results. In October 2010, we sold our worldwide development and commercialization rights in danoprevir to Roche for $175.0 million in cash. In connection with this transaction, the collaboration agreement that we and Roche entered into in October 2006 was terminated. Roche has agreed to reimburse us for royalty and milestone obligations that we continue to have to Novartis Corporation and Array related to danoprevir.
Significant License/Acquisition Agreements
We are highly dependent on technology that we have licensed or acquired from third parties. Actimmune, which is currently our only marketed product, is subject to a license agreement with Genentech, Inc. The majority of our clinical development pipeline is also based on technology that we have licensed from third parties. Details of these agreements can be found elsewhere in this Report under "Item 1. Business - License, Collaboration and Other Agreements," Notes 6 and 7 of the Notes to Consolidated Financial Statements, and under the heading "Results of Operations" below.
We paid $13.5 million in March 2009 in connection with our decision to proceed with regulatory approval for pirfenidone and an additional $1.7 million in connection with our clinical progress of danoprevir. We may be required to make future contingent milestone payments to the owners of our licensed products or the suppliers of our drug compounds in accordance with our license, commercialization and collaboration agreements in the aggregate amount of $62.1 million if all of the remaining milestones per the agreements are achieved. These milestones include development, regulatory approval, commercialization and sales milestones. Of the remaining $62.1 million in aggregate milestone payments, $20.0 million in contingent payments would be made by us only if positive Phase 3 data and product approval in the United States is achieved for pirfenidone. An additional $20.0 million is due March 2011 upon our receipt of the approval of pirfenidone by the European Union. Potential future milestone payments of $9.6 million are related to the further development of Actimmune, for which we have no current plans, and therefore we do not expect to pay these amounts. Included in the $62.1 million in future aggregate milestone payments are aggregate milestone payments of $11.3 million payable to Array and Novartis, of which Roche has agreed to reimburse us in connection with our sale of danoprevir to Roche.
Table of Contents
Issuance of Convertible Debt
In February 2004, we issued 0.25% convertible senior notes due March 1, 2011 (the "2011 Notes") in an aggregate principal amount of $170.0 million. As of March 1, 2011, the holders of all of our then-outstanding 2011 Notes, approximately $45.0 million in aggregate principal, elected to convert the outstanding 2011 Notes into an aggregate of 2,078,561 shares of our common stock. As a result, there are no 2011 Notes that remain outstanding and we have no further obligations under the indenture governing the 2011 Notes.
On June 24, 2008, we issued $85.0 million in aggregate principal amount of 5.00% Convertible Senior Notes due 2015 (the "2015 Notes") to certain Holders of our then outstanding 2011 Notes in exchange for $85.0 million in aggregate principal amount of their 2011 Notes. The 2015 Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of our existing and future senior debt and rank senior in right of payment to all of our existing and future subordinated debt. The 2015 Notes were exchanged by us with the Holders exclusively and solely for the 2011 Notes in a transaction exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended.
The 2015 Notes mature on March 1, 2015 and bear interest at a rate of 5.00% per annum. The holders of the 2015 Notes may convert their 2015 Notes into shares of our common stock at a conversion rate of 52.9661 shares per $1,000 principal amount of notes (representing a conversion price of approximately $18.88 per share), subject to adjustment. The conversion rate for the 2015 Notes will be increased in certain circumstances that constitute a fundamental change of the Company and in connection with a withholding tax redemption. We can only settle conversion of the 2015 Notes by delivery of shares of common stock.
In April 2009, we entered into exchange agreements with certain holders of our convertible notes to issue, in the aggregate, approximately 2.1 million shares of common stock, valued at approximately $36.1 million, in exchange for, in the aggregate, $32.3 million principal amount of the convertible notes, representing approximately 38% of the aggregate principal outstanding of our 2011 Notes at the date of the exchanges.
In September 2009, we entered into an exchange agreement with certain holders of our convertible notes to issue approximately 0.2 million shares of common stock, valued at approximately $4.0 million, in exchange for approximately $3.8 million principal amount of the convertible notes, representing approximately 7% of the aggregate principal outstanding of our 2011 Notes at the date of the exchange.
Additionally, in September 2009, we entered into exchange agreements with certain holders of our convertible notes to issue approximately 0.3 million shares of common stock, valued at approximately $4.3 million, in exchange for approximately $4.0 million principal amount of the convertible notes, representing approximately 8% of the aggregate principal outstanding of our 2011 Notes at the date of the agreements. All of the convertible notes we acquired pursuant to the exchange agreements in September 2009 were retired upon the closing of the exchanges in October 2009 upon completion of ten trading days of our common stock necessary to determine the final number of shares to be issued.
All of the convertible notes we acquired pursuant to the exchange agreements in April and September 2009 were retired upon the closing of the debt exchanges.
Need for Additional Capital
We commenced operations in 1998 and have incurred significant losses to date. Our revenue has been limited primarily to sales of Actimmune, which has been declining in recent years. We expect to continue to incur net losses in the near term as we continue our preparations for the commercial launch of pirfenidone in the European Union, including expanding our commercial infrastructure and related employee headcount, continue the development of pirfenidone for approval in the United States, including the launch of a new Phase 3 clinical study in the first half of 2011, continue our research in the area of hepatology, and continue to grow our operational capabilities. Although we believe that our existing cash, cash equivalents and available-for-sale securities, together with anticipated cash flows from sales of Actimmune will be sufficient to fund our operating expenses, debt obligations and capital requirements under our current business plan through at least the next 12 months, we may continue to require substantial additional funding in the future to realize the full commercial potential of our approved products and to complete our currently contemplated research and development activities. As a result, we may attempt to raise additional funds through equity and/or debt financings, collaborative arrangements with corporate partners or from other sources. If additional capital is not available to us or is not available to us on terms
Table of Contents
that are favorable, we may be forced to curtail our research and development activities, our commercialization activities, or we may be required to cease our operations entirely.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable. These estimates are the basis for our judgments about the carrying values of assets and liabilities, which in turn may impact our reported revenue and expenses. We have discussed the development, selection and disclosure of these estimates with the Audit Committee of our board of directors. Actual results may differ from these estimates under different assumptions or conditions.
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur periodically, could materially change the financial statements. We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Convertible Debt
On January 1, 2009, we adopted Financial Accounting Standards Board, Accounting Standards Codification ("ASC") Topic 470 ("ASC 470"). ASC 470 requires the issuer of convertible debt that may be settled in shares or cash upon conversion at their option, such as our $45.0 million 0.25% convertible senior notes due March 2011 that were outstanding as of December 31, 2010, to account for their liability and equity components separately by bifurcating the conversion option from the debt instrument, classifying the conversion option in equity and then accreting the resulting discount on the debt as additional interest expense over the expected life of the debt. The value assigned to the debt component is the estimated fair value, as of the issuance date, of similar debt without the conversion feature. This required management to make estimates and assumptions regarding interest rates as of the date of original issuance, in addition to estimates and assumptions regarding interest rates as of our June 2008 debt extinguishment and the 2009 debt exchanges.
Stock-based Compensation
Beginning January 1, 2006, we account for stock-based compensation in accordance with ASC Topic 718-10. Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the vesting period. In order to estimate the value of share-based awards, we use the Black-Scholes model, which requires the use of certain subjective assumptions. The most significant assumptions are our estimates of the expected volatility and the expected term of the award. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from any of these estimates, stock-based compensation expense and our results of operations could be materially impacted.
If all of the remaining and outstanding restricted stock awards that were granted in the past four years beginning in 2007 became vested, we would recognize approximately $10.8 million in compensation expense over a weighted average remaining period of 1.0 year. If all of the remaining nonvested and outstanding stock option awards that have been granted became vested, we would recognize approximately $20.2 million in compensation expense over a weighted average remaining period of 1.8 years. However, no compensation expense will be recognized for any stock awards that do not vest.
Revenue Recognition and Revenue Reserves
Revenue on product sales is recognized when persuasive evidence of an arrangement exists, the price is fixed, and final delivery has occurred and there is a reasonable assurance of collectibility of the amounts receivable from the customer. Therefore, revenue is generally recognized upon delivery when title passes to a credit-worthy customer. Reserves are recorded at the time revenue is recognized for estimated returns, rebates, chargebacks and cash discounts, if applicable. We sell to a limited number of customers, mainly specialty pharmacies and distributors. We obtain written purchase authorizations from our customers for a specified amount of product at a specified price. We are obligated to accept returns from customers if the pharmaceuticals they purchased have reached their expiration date. We have demonstrated the ability to make reasonable and reliable estimates of product returns based on
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historical experience. Due to the nature of our business model and based on historical experience, these estimates are not highly subjective. We review all sales transactions for potential rebates, chargebacks and discounts each month and monitor product ordering cycles and actual returns, product expiration dates and wholesale inventory levels to estimate potential product return rates. We believe that our reserves are adequate. For each of the periods presented below, we have not made any shipments as a result of incentives and/or in excess of our customers' ordinary course of business inventory levels. Specialty wholesalers maintain low inventory levels and manage their inventory levels to optimize patient-based need (demand) and generally do not overstock Actimmune.
The tables below present the amounts reported as revenue reductions for the periods indicated (in thousands, except percentages):
Year ended December 31,
Reductions to Revenue 2010 2009 2008
Cash discounts $ 491 $ 507 $ 666
Product returns 91 167 -
Chargebacks 1,977 1,569 1,460
Medicaid rebates 2,564 1,901 1,279
Total $ 5,123 $ 4,144 $ 3,405
Year ended December 31,
2010 2009 2008
Gross product revenue $ 25,163 $ 29,572 $ 33,285
Revenue reductions as a % of gross product revenue
Cash discounts 2.0 % 1.7 % 2.0 %
Product returns 0.3 % 0.6 % -
Chargebacks 7.9 % 5.3 % 4.4 %
Medicaid rebates 10.2 % 6.4 % 3.8 %
Total 20.4 % 14.0 % 10.2 %
In 2010, chargebacks were approximately 7.9% of gross revenue, but historically have fallen within a range of 1.0% to 5.0% in any given year depending on the customer base. The increase in the past two years above this range is primarily attributed to the TRICARE Pharmacy Program ("TRICARE") which became effective January 2008 and is administered by the Department of Defense. Excluding TRICARE, chargebacks would have been approximately 5.1% in 2010, which would have increased reported revenue by approximately $0.7 million. In 2010, Medicaid rebates were approximately 10.2% of gross revenue, and historically have fallen within a range of 2.0% to 6.0% in any given year. If Medicaid rebates had decreased to 4.0% during 2010, this would have increased our reported revenue by approximately $1.6 million. The ranges noted above are based on a review of historical trends, though we believe the trend for the ranges in future periods will be modestly higher given the recent price increases described below. Chargebacks as a percentage of gross revenue have increased year over year for the past two years due to disappointing clinical trial results and our subsequent decision to discontinue further development of Actimmune in addition to the new TRICARE program. The increase in Medicaid rebate revenue reductions from 3.8% in 2008 and 6.4% in 2009 to 10.2% in 2010 is due to price increases for Actimmune implemented midway through 2008 and 2009 and the lack of a corresponding increase in the Medicaid reimbursement rate.
The source of information that we monitor in assisting us with computing chargebacks is from the Federal Supply Schedule, Veterans Administration and Public Health System pricing documents. These documents establish the maximum price allowable for the sale of our product to a government customer. The chargeback amount per unit is computed as the difference between our sales price to the wholesaler and the selling price from the wholesaler to a government customer. Chargebacks are processed directly by the wholesalers and are deducted from payments to us.
The source of information that we monitor in assisting us with computing Medicaid rebates is from each of the 50 states. Medicaid rebates are billed directly to us from each state. Billings from the states, which are based on end user reports submitted by pharmacies to the state agencies, are typically received within 45 days after the end of each calendar quarter. We use historical billing and payment trends to assist us in determining an estimated Medicaid rebate amount each period.
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Clinical Trial Accruals
We accrue costs for clinical trial activities performed by contract research organizations based upon the estimated amount of work completed on each study. These estimates may or may not match the actual services performed by the organizations as determined by patient enrollment levels and related activities. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, correspondence with contract research organizations and review of contractual terms. However, if we have incomplete or inaccurate information, we may overestimate or underestimate activity levels associated with various studies at a given point in time. In the event we underestimate, we could be required to record significant additional research and development expenses in future periods when the actual activity level becomes known. All such costs are charged to research and development expenses as incurred. To date, we have not experienced changes in estimates that have led to material research and development expense adjustments being recorded in subsequent periods.
Inventory Reserves
Our inventories are stated at the lower of cost or market and our inventory costs are determined using the specific identification method which approximates first-in first-out. We enter into purchase obligations to purchase our inventory based upon sales forecasts to enable us to mitigate some of the risk associated with the long lead times required to manufacture our products.
We write off the cost of inventory and reserve for future minimum purchase commitments, if any, that we consider to be in excess of forecasted future demand. We define excess inventory as inventory that will expire before it can be sold, based on future sales forecasts. In making these assessments, we are required to make judgments as to the future demand for current or committed inventory purchase levels. We are also required to monitor the expiration dates of our products, since our products can no longer be used after their respective expiration dates. Actimmune has an expiration date of 36 months from the date of manufacture. As part of our on-going excess inventory assessment for Actimmune, we also estimate the expiration date of any Actimmune to be manufactured in the future.
Projected revenue trends resulted in us recording charges during 2010, 2009 and 2008 of $0.5 million, $0.3 million, and $0.7 million, respectively, to cost of goods sold for excess inventories. If Actimmune revenue levels experienced in future periods are substantially below our current expectations, we could be required to record additional charges for excess inventories. Please refer to the statements under "Item 1A. Risk Factors" in this Report to gain a better understanding of the possible reasons why actual results may differ from our estimates.
Results of Operations
Comparison of years ended December 31, 2010, 2009 and 2008
Revenue
For the year ended December 31, 2010, we recorded total net revenue of $259.3 million, compared to $48.7 million and $48.2 million for the same periods in 2009 and 2008, respectively. The substantial increase in revenue in 2010 as compared to 2009 is primarily due to the sale of our worldwide rights in danoprevir to Roche in October 2010 which resulted in the recognition of $175.0 million in revenue from the sale proceeds along with the acceleration of $57.3 million of previously deferred revenue related to the termination of our 2006 collaboration agreement with Roche, partially offset by the continued decline in our Actimmune product revenue and the receipt of danoprevir-related milestone payments in prior years. We reported an increase in revenue in 2009 as compared to 2008 due to our receipt of the $20.0 million milestone payment from Roche in 2009 compared with the receipt of a $15.0 million milestone payment in 2008. This increase offset the year over year decrease we reported in Actimmune product sales. The $64.3 million in collaboration revenue in 2010 includes $57.3 million recognized in connection with the termination of our 2006 collaboration agreement with Roche, as well as approximately $4.5 million of revenue related to the new collaboration agreement we entered into with Roche in December 2010, representing reimbursement for research services performed for Roche. The $23.3 million and $18.3 million of collaboration revenue for 2009 and 2008, includes $20.0 million and $15.0 million of milestone payments received in September 2009 and September 2008, respectively, each of which had been assessed as substantive and at-risk at the initiation of the agreement and were therefore recognized as revenue when the milestones were achieved, as defined in the former collaboration agreement. In 2010, 2009 and 2008, respectively, collaboration revenue included approximately $2.5 million, $3.3 million and $3.3 million of amortization of the aggregate $70.0 million in upfront payments received from Roche in 2006 and 2007. For each of the years ended December 31, 2010, 2009 and 2008, Actimmune accounted for all of our product revenue and was approximately $20.0 million, $25.4 million and $29.9 million, respectively. A significant portion of these sales were derived from physicians' prescriptions for the off-label use of Actimmune in the treatment of IPF.
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There are a number of variables that impact Actimmune revenue including, but not limited to, the discontinuation of the Phase 3 INSPIRE clinical trial in March 2007, the level of enrollment in IPF clinical trials of other companies, new patients started on therapy, average duration of therapy, new data on Actimmune or other products presented at medical conferences, publications in medical journals, reimbursements, and patient referrals from physicians.
Cost of Goods Sold
Cost of goods sold include product manufacturing costs, royalties and distribution costs associated with our product revenue and inventory writedowns. Cost of goods sold for the year ended December 31, 2010 was $6.3 million, or approximately 31% of total product revenue, compared to $7.0 million and $9.0 million, or approximately 28% and 30% of total product revenue, in 2009 and 2008, respectively. The decrease in cost of goods sold for each year over year period primarily reflects the decline in Actimmune revenue. Included in 2010, 2009 and 2008 cost of goods sold are charges of $0.5 million, $0.3 million and $0.7 million, respectively recorded for excess inventories. Excluding the charges for excess inventory and purchase commitments in 2010, 2009 and 2008, cost of goods sold was approximately 29%, 26% and 28% of product revenue for each of the years ended December 31, 2010, 2009 and 2008, respectively.
Exchange rate fluctuations on inventory purchases may affect cost of goods sold on Actimmune inventory purchased from BI. In the past, we have utilized forward exchange contracts to partially offset the effect of exchange rate fluctuations, but we did not enter into any such contracts in 2010, 2009 or 2008.
Research and Development Expenses
Research and development ("R&D") expenses were $67.5 million, $89.1 million and $104.2 million for the years ended December 31, 2010, 2009 and 2008, respectively, representing decreases of 24% from 2009 to 2010 and 14% from 2008 to 2009, respectively. The decrease in 2010 as compared to 2009 is primarily due to the timing of the preparation of regulatory filings related to pirfenidone and the divestiture of danoprevir in October 2010. The decrease in 2009 compared . . . "
Thought this might be of interest...
Source: http://arstechnica.com/microsoft/news/2011/02/nokia-and-microsoft-good-for-finland-risky-for-redmond.ars?utm_source=Ars+Technica+Newsletter&utm_campaign=ab12277685-February_18_2011_Newsletter&utm_medium=email
"Nokia and Microsoft: good for Finland, risky for Redmond
By Peter Bright | Last updated February 13, 2011 11:00 PM
Earlier, Ryan Paul was rather down about the announcement that Nokia and Microsoft were partnering, and that Windows Phone 7 would be Nokia's primary smartphone platform. It might work out well for Microsoft—it gives the software company a strong hardware partner with substantial international reach. But, for Nokia, he felt it meant the loss of control over its own destiny: Nokia is going from a vertically integrated supplier, building hardware, software, and online services, to just another handset builder, like HTC, Samsung, LG, or even Dell. A huge step backwards.
I'm not so sure. In fact, I think he has it backwards. I think that the advantages to Nokia are clear. Given the scant details revealed so far—perhaps no surprise given that nothing has been formalized just yet—Microsoft is the company in the more difficult position, and it has a lot of questions to answer.
Nokia needs a modern operating system
Nokia, in spite of consistent poor performance in the North American market, is a cellphone powerhouse. The biggest seller of cellphones in the world, it's a consistent technology innovator (for example, Nokia has had phones supporting NFC for several years: technology that other handset companies are only just beginning to integrate). It's also something of a smartphone pioneer; the Nokia Communicators were legendary, and even today the company's smartphone business is substantial.
Substantial, but waning. The Symbian operating system that the company has used for many years doesn't live up to the expectations of today's iPhone-aware smartphone users. We want fluent, touch-friendly, easy-to-use systems with a wealth of applications. Symbian, even in the latest Symbian^3 incarnation that's found on phones like the Nokia N8, doesn't offer that.
In spite of considerable development effort by Nokia, it never appeared that it would be suitable for modern smartphones. In October 2010, the Finns announced that a separate Symbian^4 release was cancelled in favor of incremental updates to the Symbian^3 release.
Nokia's next hope for smartphone salvation was MeeGo, a Linux-based embedded platform co-developed with Intel, Novell, and the Linux Foundation. It's an ambitious project, designed not just for smartphones, but tablets, in-vehicle systems, TVs, and more. At one time it was even intended for netbooks, too. What it lacked, however, was timeliness: it's not clear when MeeGo will actually be good enough to use on the kinds of device that Nokia wants—and needs—to compete with iOS, Android, and Windows Phone 7.
So, as Nokia CEO Stephen Elop wrote in a memo leaked earlier in the week, the company was stuck on a "burning platform." Jumping off that platform might be risky, but it also provides the possibility of salvation. Sticking on the platform will lead to inevitable failure.
Windows Phone 7 is that operating system
With in-house development ruled out, the company had essentially two options: Android and Windows Phone 7. Android might seem the obvious choice, especially with Nokia's existing Linux experience from MeeGo, but Android has its problems. Android manufacturers are already engaged in a vigorous race to the bottom, with cheap and cheerful handsets like the Huawei Ideos (T-Mobile Comet), Motorola Cliq 2, and LG Optimus.
There's a huge number of Android phones on the market, and they're becoming increasingly interchangeable. The only real means of differentation (aside from weird gimmicks) is custom software. Nokia plainly doesn't feel that being "just another Android vendor," in a market tarnished by low-budget, low-margin handsets with non-standard, typically ugly software is the best way to reinvigorate its smartphone niche.
There's also pressure from network operators: they don't want a market dominated by Android at the low and mid-end, with the iPhone taking the high-end. They want competition across every segment, and Windows Phone 7 is believed to be a possible way of achieving that.
With Android out of contention, Microsoft's operating system is the only real alternative. It's risky: it's very much an underdog in the battle for smartphone supremacy, and its success remains far from assured. But it provides what Nokia has consistently failed to develop for itself: a high quality, user-friendly, touch operating system. Nokia's problem is a software problem, and Windows Phone 7 solves that software problem.
Microsoft needs partners
Microsoft's position is more difficult. There are certainly upsides. The two companies made clear that this was a special partnership, and that Nokia isn't just buying Windows Phone 7 licenses from Microsoft in the way that HTC or Samsung do. Rather, the pair will be collaborating to integrate their services.
Some of these collaborations are easy and obvious and already announced, at least in vague terms. Nokia Maps, powered by the company's own mapping data company Navteq, will be integrated with Bing Maps. This integration will, I hope, result in broader availability of street mapping, and the introduction of turn-by-turn navigation support.
Nokia turns out some pretty good hardware, too, and if the leaked pictures are anything to go by, the aesthetic appeal of Windows Phone 7 handsets is set to make a big leap forward. In any case, Nokia's hardware expertise will inform Microsoft's future hardware specifications and platform requirements.
Nokia will also be in a different position compared to other handset vendors when it comes to promotion of the platform. Samsung, HTC, LG, Dell, and Asus all sell smartphones powered by a range of operating systems. None of them want to promote one platform at the expense of another, leaving Microsoft's operating system underpromoted. Nokia, in contrast, is going to transition to using Windows Phone 7 pretty much across the board. This means that Microsoft should receive full-blown support and promotion from the company.
However, Microsoft also needs a strong platform
But it's not all good. Elop and Microsoft CEO Steve Ballmer weren't clear about some of the details, and there were a few areas of concern. They plan to "bring Windows Phone to a larger range of price points," presumably with a wider range of hardware specifications and form factors than are currently permitted on the platform. That's bad news for developers: diverse hardware specs make it harder to ensure performance is adequate and user interfaces scale properly.
This is a problem iOS substantially avoids (through Apple's policy of aiming at the higher end of the market such that new models are simply better versions of old models), but which causes problems on Android. Windows Phone 7 currently avoids the issue entirely, but if the two companies push the platform down-market, with smaller screens and slower processors, the platform could become a whole lot less appealing.
Such a move downmarket means that Nokia will be driving the same kind of margin slashing that has already affected Android phones. Precisely the kind of commoditization that Elop said he was trying to avoid!
There is also a risk to the platform's broad support. OEMs might not have gone overboard in their promotion of Windows Phone 7, but they've given it a stab nonetheless. If Microsoft gets too chummy with Nokia—and it's already looking as if it will—it's easy to see the other OEMs doubling down on Android and abandoning the platform. After all, if Nokia gets all kinds of special privileges and special treatment, how are they going to compete with that? There's not much point in participating in a field stacked against you.
That might be tolerable if Nokia was already selling 100 million Windows Phone 7 handsets a year but, at this early stage in the platform's life, it would be a disaster. Stephen Elop made the point himself: the other OEMs are an essential part of the ecosystem at the moment, because they make the platform that much more prevalent, and hence provide a larger development target.
Can Nokia fragment Microsoft's platform?
Given these issues, some of the vaguer comments made by the companies are a concern. Elop said that Nokia's deal with Microsoft gave the phone company "the ability to do customizations and extensions to the software environment that are unique and therefore differentiate."
Now, Elop never gave any explicit clarification about that statement, but he did make several mentions of Nokia's camera and image technology, suggesting they are unique offerings. If this is the kind of customization that Nokia can perform—using its excellent camera technology to shame the often mediocre cameras found in other phones—then that's fair game. Any OEM could develop high-end cameras; it's just that Nokia has actually done so, making the hardware unique to the Finns.
If, on the other hand, he's talking about something substantially more—offering customizations that other OEMs simply aren't permitted to make, regardless of technical ability—then it's extremely bad news for the platform. If Nokia can, for example, make modifications to the Windows Phone 7 user interface, or offer unique form factors, it alienates the other OEMs, regardless of anything Elop might say. That undermines Windows Phone 7's value as a coherent, consistent platform.
Such a move would be rather peculiar, as it's plain to see that Nokia's expertise does not lie in software. I don't doubt that the company has had many skilled people working on Symbian and MeeGo, but the company's management and internal organization has consistently failed to translate this work into high quality, desirable software products. Microsoft's track record in this area is considerably stronger.
If Nokia can perform extensive, unique, software customization, then it will be diminishing the value Microsoft brings to the partnership, and it will mean that Nokia still has to do considerable software work: an area of known weakness. This is not playing to the strengths of both companies.
It could have just been sloppy speaking; it may mean nothing more than Nokia is planning to use its existing unique expertise—industrial design, cameras, turn-by-turn navigation—to deliver special, Nokia-specific value within the existing OEM framework. That's to be welcomed, and indeed, it's the entire point of the OEM customization provisions. If, on the other hand, it means that Nokia will be free to fragment the platform, it will be a devastating mistake.
Nokia wins either way
Devastating for Microsoft, at least. For Nokia, such fragmentation may not be such a big deal. If it can get a decent amount of sales, then "Nokia-variant Windows Phone 7" will simply serve the role of a cheaper-to-develop Symbian or MeeGo: one where Microsoft pays for most of the development work, and Nokia just pays to customize, taking most of the profit with it. It's Microsoft that's trying to promote a much broader platform and ecosystem that isn't tied to any one vendor, so it's Microsoft that suffers here. Its platform ambitions will be scuppered, holed below the waterline.
And, of course, even if the platform sinks, making Windows Phone 7 untenable even for Nokia, the phone company can eat some crow and fall back on Android, or maybe even MeeGo. Microsoft, however, has no such fall-back position.
Windows Phone 7 developers and early adopters already face uncertainty, with a lack of a roadmap both for updates and new form factors (including tablets), and an unspecified relationship with Windows 8 for ARM processors. To that uncertainty, we now have to add the prospect of Nokia almost forking the platform. That's not a happy situation to be in.
As with so much of Microsoft's recent actions, addressing these issues would do a lot to reassure the community. As has been the company's consistent trend, however, I doubt the questions and concerns will be dealt with in a timely manner.
If the two companies play this well, the results could be phenomenal. The deal between the two could mean that we get the best of both—strong software from Microsoft, strong hardware from Nokia, Nokia's global reach, and Nokia's phone expertise helping Redmond keep abreast of developments and trends in the phone markets. Provided the partnership is structured to ensure that we don't get the fragmentation that I fear they want to introduce, then it will boost both companies. Microsoft will gain flagship handsets and massive market expansion; Nokia will be able to reverse its slide in the premium (and hence, lucrative) smartphone market with competitive, modern devices.
That combination could eventually drive enough sales of Nokia hardware to make the other OEMs irrelevant. In such a situation, an eventual Microsoft purchase of the company would seem an inevitability, as it would further reinforce those strengths. Nokia has a lot of business that would be non-core to such an acquisition, but the prospect of a fully vertically integrated smartphone (and tablet) business would make it worthwhile.
But if it's done badly? Nokia will still get its smartphone operating system, but Microsoft will lose its platform."
It might be that CS reports on specific stocks are available thru TDAmeritrade. Just not the one we would like to see covered by them.
FWIW, Fidelity does not list any report or recommendation - yet - by Credit Suisse.
Jorm,
Whether gas is a small part or not-so-small, let's hope we all do well with our SD shares.
Steve
CD,
Cool. Thanks!
Steve
CD,
Have they been divesting the natural gas assets? I seem to recall they were selling those to raise funds for the shift into oil. I prefer not to sell any asset when at the cheap point of a cycle.
Steve
Catdaddy,
I certainly agree that price appreciation from the $6.52 I paid for my shares is the biggest issue. I could see a drop in share price yesterday coincident with a drop in oil price and wondered if the drop in SD was out of proportion to the drop in oil or if some other event happened which I didn't see.
Good luck to all longs!
Steve
Does anyone know what was the proximate cause of the drop today?
TIA
I would guess many tech stocks were down today and IDCC was overdue for some consolidation. This morning, I was simply intent on sharing the information I gleaned at the mall. I did not attempt to use it myself for trading purposes.
Followup on poor Verizon iPhone sales...
http://seekingalpha.com/article/252137-apple-s-mini-flash-crash-today
Apple's Mini 'Flash Crash' Today
4 comments | by: Andy Zaky February 10, 2011
"At around 1:45 pm EST today (Thursday) Apple (AAPL) experienced a mini-flash crash where the stock briefly went into complete free-fall before immediately recovering half of its losses. From high to low, the stock lost $10 in 20 minutes and saw big gap downs from $352.50 to $348.00 ($4.50) over a 1-2 minute period of time.
I watched the May flash crash live and can attest that this sell-off was extraordinarily similar in nature to the May sell-off. My initial reaction to this disorderly sell-off was that Steve Jobs must have gotten hit by a bus without a stock halt. Later it was discovered that the selling pressure was attributed to reports of thin crowds in Verizon (VZ) stores during the iPhone launch.
Yet, whatever the reason for sell-off I can attest that the sell-pressure was entirely disorderly. It seems that we still have issues with specialists being unable to keep things afloat ahead of huge orders in the market. The volume spike was enormous as millions upon millions of shares were sold in the scope of 15 minutes."
Joel,
I know Verizon had sold out on the pre-orders. However, I was mall-walking from 8:15 to 9:15 this morning and passed those three stores (which had opened up early) multiple times. Each had ropes set up outside to help control expected crowds. Each had what appeared to be all hands on deck for the debut. Staff I spoke with confirmed that they had had few customers.
It may simply have been an artifact of the stores being inside a mall, rather than in a more public street location, but at least my limited observation sample showed few buyers. Maybe more people show edup at the normal 10 am opening time for the stores.
Steve
FWIW, verizon iPhones were not selling at the mall.
Montgomery Mall had Verizon, Apple and Best Buy staff out in force with virtually no customers this morning. Just passing on my observation. Don't know how it compares to other venues.
Steve
Governance and other statistics from Fidelity.
(with apologies for the formatting/lack of graphics)
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Key Statistics:IDCC
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Audit Integrity - 02/01/11
Forensic analysis of financial reporting and governance practices to identify, measure, and monitor potential associated risks.
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Historical data on financials with interactive charts, technical indicators, and five-year peer comparison trend charts.
IDCC Industry Average Industry Percentile
Market Cap $2.43B $6.70B 86th
P/E (Most Recent Quarter) 17.35 20.23 69th
P/E (Trailing Twelve Months) 15.49 30.95 63rd
P/E (5-Year Average) 32.87 28.91 72nd
PEG Ratio 0.88 2.37 43rd
Enterprise Value $2.37B $63.47B 86th
Price/Cash Flow (Most Recent Quarter) 14.71 18.04 70th
Price/Cash Flow (TTM) 13.37 12.58 69th
Price/Sales (Most Recent Quarter P/E) 6.59 3.53 92nd
Price/Sales (TTM) 6.40 3.95 91st
Price/Book 9.94 3.85 95th
IDCC Industry Average Industry Percentile
EPS Growth (Last Qrtr vs. Same Qrtr Prior Year) +14.49% +241.40% 46th
EPS Growth (TTM vs. Prior TTM) +202.56% +101.05% 85th
EPS Growth (Last 5 Years) -- +8.59% --
Projected EPS Growth (Next Year vs. This Year) -10.37% +21.95% 7th
Projected EPS Growth (Next 5 Years) +17.50% +14.13% 61st
Revenue % Change (Last Qrtr vs. Same Qrtr Prior Year) +21.77% +24.46% 53rd
Revenue % Change (TTM) +34.34% +16.81% 77th
Revenue Growth (Last 5 Years) +23.46% +16.84% 83rd
Capital Spending Growth (Last 5 Years) +1.44% +9.44% 54th
Book Value per Share Growth (Last 5 Years) +13.32% +12.53% 80th
Cash Flow Growth Rate (Last 5 Years) +62.03% +10.35% 96th
Cash and Cash Equivalents Increase/Decrease (TTM vs. Prior TTM) $0.14 $0.04 82nd
Cash and Cash Equivalents Increase/Decrease (Last Qtr vs Prior Qtr.) $0.24 $0.04 77th
IDCC Industry Average Industry Percentile
Gross Margin (Most Recent Quarter, Annualized) 100.00% 58.10% 100th
Gross Margin (TTM) 100.00% 59.11% 100th
EBITD Margin (TTM) 65.55% 23.19% 100th
Profit Margin (Most Recent Quarter, Annualized) 38.64% 16.83% 98th
Operating Margin (Most Recent Quarter, Annualized) 59.26% 19.28% 100th
Operating Margin (TTM) 59.81% 17.79% 100th
Pretax Margin (Most Recent Quarter, Annualized) 59.86% 20.86% 98th
Pretax Margin (TTM) 59.08% 18.66% 98th
IDCC Industry Average Industry Percentile
Return on Sales (Most Recent Quarter, Annualized) 38.64% 16.83% 98th
Return on Sales (TTM) 42.10% 14.60% 97th
Return on Equity (Most Recent Quarter, Annualized) 46.52% 18.34% 90th
Return on Equity (TTM) 65.39% 14.99% 95th
Return on Assets (Most Recent Quarter, Annualized) 15.55% 10.60% 91st
Return on Assets (TTM) 17.15% 9.65% 93rd
Return on Investment (Most Recent Quarter, Annualized) 46.44% 15.07% 92nd
Return on Investment (TTM) 65.20% 12.72% 97th
IDCC Industry Average Industry Percentile
Long Term Debt/Equity (Most Recent Quarter, Annualized) 0.08% 23.57% 4th
Long Term Debt/Equity (TTM) 0.15% 24.40% 11st
Total Debt/Assets (Most Recent Quarter, Annualized) 0.06% 10.80% 43rd
Total Debt/Assets (TTM) 0.08% 10.74% 37th
Total Debt/Capital (Most Recent Quarter, Annualized) 0.18% -- 9th
Total Debt/Capital (TTM) 0.18% 17.52% 11st
Total Debt/Equity (Most Recent Quarter, Annualized) 0.18% 28.48% 12nd
Total Debt/Equity (TTM) 0.30% 28.85% 17th
Current Ratio (TTM) 2.79 2.66 49th
Payout Ratio (TTM) -- 45.43% --
IDCC Industry Average Industry Percentile
Income/Employee (TTM) $529,033.44 $122,621.19 55th
Revenue/Employee (TTM) $1,256,490.00 $615,380.00 97th
Assets Turnover (Most Recent Quarter, Annualized) 0.40x 0.80x 12nd
Assets Turnover (TTM) 0.41x 0.73x 13rd
Inventory Turnover (Most Recent Quarter, Annualized) -- -- --
Inventory Turnover (TTM) -- 8.77x --
Receivables Turnover (Most Recent Quarter, Annualized) 12.34x 9.39x 90th
Receivables Turnover (TTM) 2.73x 8.40x 6th
Some esitmates of potential for M2M market (toward bottom). Bridgewater Systems is another stock recommended by M Partners Ron Shuttleworth.
Source: http://finance.yahoo.com/news/Bridgewater-Surpasses-10-cnw-1768653674.html?x=0&.v=1
Bridgewater Surpasses 10 Million Machine-to-Machine Connections
Press Release Source: Bridgewater Systems On Wednesday February 9, 2011, 8:00 am EST
Comprehensive broadband control portfolio enabling growth of M2M services
OTTAWA, Feb. 9 /CNW/ - Bridgewater Systems (Toronto:BWC.TO), the leader in intelligent broadband controls, today announced that during 2010 it surpassed management of more than 10 million devices supporting a range of machine-to-machine (M2M) applications. Bridgewater enables mobile operators to offer a variety of M2M services by securely managing M2M connections on 3G and 4G networks using intelligent broadband controls such as device service control, dynamic policy control, and device identity management.
News
* More than 10 million devices, on a range of worldwide service provider networks, are supported today by Bridgewater solutions that:
o Manage secure device access to 3G and 4G networks;
o Model complex device network entitlements such as security requirements, time-of-day, day-of-week restrictions; and
o Meter device usage in real time.
* These deployments support numerous M2M applications such as smart meters for utility companies, automotive infotainment services, in-vehicle tracking devices, and mobile payment services.
* The Bridgewater® Policy Controller/PCRF supports dynamic metering and Quality of Service (QoS) control for devices. An M2M service provider recently selected Policy Controller to meter network resource usage on a per-device basis, as part of their comprehensive M2M service offering to global operators.
* The Bridgewater® Service Controller provides device service control (AAA), enabling secure device access to mobile data networks.
* Policy Controller and Service Controller are anchored by Bridgewater's Subscriber Data Broker™, a common subscriber and device identity management platform that allows operators to model devices and their corresponding network entitlements in logical groups, with the ability to target individual devices with unique security or resource requirements.
Quotes
David Sharpley, Senior Vice President, Bridgewater Systems
"With demand for M2M services expected to grow exponentially, security, scale, and performance are all key concerns for service providers. Bridgewater is uniquely positioned to support this new market opportunity. Our intelligent broadband control portfolio gives service providers the proven solutions they need to manage device access to networks securely, model device entitlements, and meter device consumption of network resources in real time."
Shira Levine, Directing Analyst, Next Gen OSS and Policy, Infonetics Research
"M2M transactions are expected to well outpace human transactions over the next several years, which will drive investment in solutions that can support the high volume micro transactions that are associated with M2M traffic. Intelligent, real-time policy control solutions that are capable of supporting that transaction volume will become increasingly important, as will subscriber and device identity management capabilities that allow the operator to identify and track the data sent between devices. Those vendors with a proven track record in supporting these requirements today are well positioned to support service providers in capitalizing on the M2M market opportunity."
Tags / Keywords
Bridgewater Systems, M2M, Machine-to-Machine, WiMAX, Home Subscriber Server, HSS, Service Controller, AAA, Policy Controller, PCRF, 3G, 4G, service control, device identity management, intelligent broadband controls
Links
http://www.bridgewatersystems.com/Service-Controller.aspx
http://www.bridgewatersystems.com/Policy-Controller.aspx
http://www.bridgewatersystems.com/Subscriber-Data-Broker.aspx
http://seekingalpha.com/article/251030-cramer-s-mad-money-16-earnings-to-watch-this-week-2-4-11?source=yahoo
"Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday February 4.
...
SandRidge Energy (SD) is leaving the Mad Money penalty box, since it reported a good quarter. Cramer says it is now okay to buy SD."
$47.62 for my new shares from dividend reinvestment. No commission charged by Fidelity.