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I had the exact same thought last night
IDCC = Charlie Brown
NOK = Lucy holding football
and then I thought, no, this is the real deal this time.
Whump, flat on my back again.
Glad you saw the secret message.
It sums up my feelings about how this whole thing has played out. I'm sure the tea leaf readers and dot connectors will get a chuckle from my memo to Nokia.
Finally it is time for us to come to terms.
Understand that we expect to be fully and fairly compensated.
Create an offer that takes into account our extra expense in fighting your baseless challenges.
Know that we are not a paper tiger and will not be intimidated.
You have a final opportunity to settle with use on fair terms.
Otherwise we will take the ITC to the end and slap that injunction on you.
Until you sign the contract and your check clears we will continue our legal activity on all fronts.
Never again will we allow you or anyone else to take advantage of us.
Our position has never been stronger and it will continue to gain strength.
Keep on with your scorched earth tactics and you will pay the price.
I leave it up to you whether we do this the easy way or the hard way.
At long last you are negotiating seriously – don’t blow this last chance.
Thanks for evertything Loop,
How are those options doing!!! ;oD
Rambling thoughts on an exciting day
I am very excited and hopeful based on IDCCs 8K saying that they are getting close to a negotiated settlement with Nokia. I am glad that they did not settle with Nokia prior to the ITC staff report. I've always felt IDCC has blinked when things got to the brink, settling very cheaply (10 - 20 cents on the dollar) instead of playing out their very strong hand. With the staff report in hand, both sides now have a much clearer understanding of the likely outcome. This should enable IDCC to get a fair settlement.
What is fair? It damn well better be a better deal for IDCC than LG. I think LG was a good and fair deal and I would've been very happy if all the rest had signed on similar terms BACK THEN. However MENS chose to play hardball and attacked IDCC in every way they could think of, with Nokia as the point man. There has to be a price paid to finally establish the precedent that if you come to the table early and negotiate in good faith you will get a fair deal. If you delay and fight there will be a pound of flesh extracted (along with an extra barrel of money) to compensate us for our huge amounts of time wasted, legal expenses and risk of judicial idiocy (see MOT case).
Should IDCC have disclosed the negotiations in the 8K? I've called Janet Point and left a message asking if it was required. If so, then that's that. If not, while it certainly has me walking on sunshine today, I'm wondering what the upside is. Yes, it is important to keep investors informed, but it seems it puts pressure on IDCC to get a deal done fairly soon. It would not surprise me to see Nokia try to embarrass IDCC management and use it as leverage. I'm pretty sure this management team, headed by Mr. Merritt, has experienced enough BS that they would not fall into such a trap, but having followed IDCC for so long, I can't rule it out.
This can truly be the watershed event we've been waiting for over these long years. If so, for me, the long wait will turn out to be a very good thing. I've believed very strongly in IDCC, thanks in large part to the technical and legal folks on this board who contribute so generously to our understanding. This has allowed me to ride out the price declines without panic, and I've been fortunate in that I've been able to add to my position over the years. But I'll be glad to say goodbye to the wonderful buying opportunities forever. I'm looking forward to some good selling opportunities in the future years.
Okay IDCC, this is your moment. Settle on your terms. You tried to play nice, and Nokia said 'drop dead', and Samsung said 'yeah, what Nokia said'. Get your deal or get the injunction. Prepayment discounts are only given for prepayments, not retroactively. Make it worth all the BS they've put you through. Here's a memo IDCC can send to Nokia.
Finally it is time for us to come to terms.
Understand that we expect to be fully and fairly compensated.
Create an offer that takes into account our extra expense in fighting your baseless challenges.
Know that we are not a paper tiger and will not be intimidated.
You have a final opportunity to settle with use on fair terms.
Otherwise we will take the ITC to the end and slap that injunction on you.
Until you sign the contract and your check clears we will continue our legal activity on all fronts.
Never again will we allow you or anyone else to take advantage of us.
Our position has never been stronger and it will continue to gain strength.
Keep on with your scorched earth tactics and you will pay the price.
I'll leave it up to you whether we do this the easy way or the hard way.
At long last you are negotiating seriously – don’t blow this last chance.
If you’re really perceptive you can see a special message contained in this suggested memo.
Frank
Loop, regarding the staff report
Assuming the report is favorable to IDCC, why would IDCC or Nokia want it sealed if they reach a settlement? It would show that the ITC believes that IDCC has the goods. This will make IDCC's bargaining position much stronger. Since Nokia will have already agreed to a contract rate, wouldn't they want IDCC to be able to get as big a rate from their competitors as possible so that their competitors costs are higher?
SSLANER's post
judge ruled nok could arbitrate.
I think we all now know that he was providing information and trying to be helpful. I appreciate that and thank him for wanting to share with the board. However the post was not as helpful as it could've been by taking another minute to post a bit of detail.
Had he posted
"I just heard from teecee (or 'someone at the court' if teecee did not want to be named) that the judge ruled that nok could arbitrate. This is all that I was told and I hope the legal folks here can explain what it means."
then we most would have had a better understanding. It would have been clear that it was not a joke and I believe the response would not have been hostile towards him. I don't think people were killing the messenger because he brought bad news, but they were frustrated because the news was incomplete (he's not a lawyer, so he can't be faulted because he didn't know to ask/tell about the injunction) and that there was no indication of his source. I'm sure the fact that it was bad news contributed to the angry tone of the responses.
There are a lot of people reading this board that have life changing amounts of money invested in IDCC. This is a critical time, so if you post factual information do try to give information on the source.
Don't expect any ITC news on Monday
I spoke to Janet Point this morning and asked her if IDCC was planning on making any announcement regarding the ITC staff report. She told me that the staff report would be given to the lawyers on Monday and that it was confidential. I asked her if it was for the lawyers only, not the client, and she said yes. She said the report is disclosed at the trial. Janet said that they were investigating how disclosure was handled in other ITC cases.
This is my interpretation of what she told me, and I may have misunderstood her meaning, so don't quote her or the company based on this. If you want clarification call Janet Point and 1-800-no wires. While I did not follow up at the time, in looking at my notes it seems odd that the clients would not have access to the reports from the lawyers as it would seem to be an impetus to settlement. Maybe she was saying only the lawyers got the report directly and did not mean to convey that IDCC would not know the results.
Based on our conversation, I am expecting NO NEWS on Monday and probably not in March. If anyone can find other ITC cases that have an early disclosure I'd suggest bringing them to Janet's attention to give her a precedent for getting the info our sooner. From the amazing Olddog's post from earlier today, 3 weeks looks like a possiblity.
Okay, back to taxes.
Frank
Nokia did not hand pick UK patents
The patents challenged in the UK court were those that IDCC had declared essential through ETSI. Regardless of how they were chosen, the fact is that one was found essential to 3G. I'm no patent expert, but with the thousands of patents IDCC has, it would be very easy to pick hundreds that are not essential to 3G. That doesn't mean they are worthless, just they are not legally essential to 3G.
The fact is that IDCC did choose the patents before the ITC, so I am confident that they will stand up to the attacks by Nokia and Samsung and at long last IDCC will have the leverage it needs to get the big licenses finished at fair rates.
OT All is well
Thanks to all those who responded to my request. They pulled 15 gall stones out of her bile duct before removing her gall bladder. She came through fine and is recovering nicely.
Thanks again,
Frank
OT For believers in a higher power
My wife is having her gall bladder removed today, a very common and low risk procedure. However it is stressful and uncomfortable, so those of you who believe in a higher power or in the power of positive thinking please send your thoughts and prayers out for Susan. She is a wonderful lady, as she's put up with me for 25 years, so she's got the patience of Job (or an IDCC shareholder).
Thanks to all those who can help.
Frank
Please do not post anything to the board - I don't want to create unnecessary clutter here.
Whizzer - Thanks again
I appreciate your sharing your time and expertise by explaining what you see in the ruling.
Frank
Jim, please delete the referenced post
It insults an analyst because the poster doesn't like his opinion. If we want to continue to get the wonderful access to those analysts' reports you've obtained, then there should not be any mudslinging towards them allowed. That is far different from disagreeing with them on this board and doing your best to show where their assumptions or analysis may be wrong. That type of response leads to greater understanding. Name calling because you don't like what they say does not.
People, you've got to learn the difference between catalyst and cause. A catalyst is a relatively minor occurrence that begins a substantial change. A cause is the reason for that change. When we signed LG and gapped up, the catalyst and the cause were the same. When we fell 10 points after a negative comment by an analyst, they were not. At that time there were a lot of people looking to sell and once the price started falling they got out in a hurry. Similarly, the recent notice of IDCC on Wall Street is a catalyst. It inspired the jump Friday.
If the price increase becomes a trend it will not be caused by the positive press, it will be caused by the large undervaluation of IDCC. The stock price has been under great pressure and those who follow the story understand it is undervalued, but did not want to fight the tape, waiting for rock bottom. When it jumped up I'm thinking there was some buying from folks who became more worried about being left behind as this stock climbs instead of getting it just a little bit cheaper. There is a definite cause coming within a month, which will also be a catlyst, and that is of course, the ITC. It looks like IDCC has a very strong case so investors are going to be ready to climb on board which would create a nice rising stock price over the near term. We get a good result or a good settlement and we are looking a hockey stick type of chart. But the press reports are just the catalyst. If IDCC were still trading in the 30s, this coverage would spike it for a hour or a few days, but the price would fall back waiting for the news.
Nice day today
My mom watches the price and gets a bit nervous when it keeps falling, so this jump back over 18 should make her feel a bit better, along with those on this board who obsess over the daily price moves.
IDCC's share price was and still is way out of line with it's value. It's nice to get a good pop. I hope to hell IDCC is buying back shares with both fists at these levels, because I do believe the price will rise back to a reasonable valuation soon, so buying at these low levels is a great investment. Once we get a favorable report from the ITC and use that to get some licenses done then these prices will look like a steal.
It'll be nice to see that big green buck and a half gain on my homepage this weekend. I'm hoping this is the start of a wonderful uptrend.
Thank you Ed, that was helpful.
Zdog, see Whizzer's post regarding FRAND
http://investorshub.advfn.com/boards/replies.asp?msg=27266012
I would hope FRAND changes as facts change
What is the motivation for Nok, Sam or others not to go the distance and then accept IDCC proposed rate following a loss but prior to an injunction?
I would think that the value of patents that have been ruled essential and infringed on by a court and the ITC would have greater value than patents that are licensed without legal testing. It seems that good public policy would allow companies that come forward and license without resorting to litigation (thank you LG) to get a better rate than those that are dragged to the table kicking and screaming. If you can get the same rate either way, there is little incentive to cooperate and license if you can come up with any legal strategy that gives you any shot at winning. Legal costs vs. license expense makes the risk/reward so high that even a 1% chance of winning makes it worth litigating if the license terms are the same.
Those knowledgeable in the area please correct me if I'm wrong, but non-discriminatory does not mean everyone ends up paying the same amount, it means that if you get the same contract the other licensees would get based on the facts known at the time of license, including volume discounts, prepayment discounts, value adjustments for multi-funcional units and other variables that affect rate with out being discriminatory in the FRAND sense. Obviously, if Nokia can get all of IDCC patents ruled non-essential Nokia would be able to negotiate a lower rate than LG has. If IDCC had a new, absolutely necessary patent approved tomorrow, IDCC would not be under any obligation to license others at the same rate as LG even if LG's license included patents approved during the life of the license, correct? If the above common sense statements are true, then anything that affects the value of the patent should change the fair and reasonable rate and not be a violation of the non-discrimination requirement. Having patents tested legally adds value to them. Negotiating in good faith should be factored into the terms vs. battling every step of the way. Is that how FRAND works? I appreciate any knowledgeable feedback or real life examples.
Whizzer, thanks for your great summation of the importance of March 24. That post will be referred to often over the next three weeks.
Amending returns for foreign tax credit
When one pays tax on foreign income to a foreign country, you can claim a credit against your US tax (a dollar for dollar benefit) or you can deduct the payments as an expense (reducing your taxable income, the benefit is your expense times the marginal tax rate). The choice is typically a no-brainer, as the credit gives a bigger benefit. However if you don't have taxable U.S. income then there is no immediate benefit and the tax credit or Net Operating Loss (NOL) carries over to future years. NOLs carry over for 20 years until used up, credits can be carried forward for only 5 years. Therefore you it may be beneficial to take the expense to create a bigger NOL that gives you a much longer period in which to become profitable and get a benefit from the expense, rather than to claim the credit that may expire unused. IDCC chose the expense. The IRS, in a rare display of reasonableness, allows companies 10 years from the filing date of the original return to amend the return and change the election, instead of the normal 3 year statute of limitations.
Now that IDCC has become a profitable tax paying member of society, it is seeking to change it's election to claim the credit on the old returns, to save approximately $20 million in federal taxes paid. However due to the complexity of multinational filings and additional information required to support the tax credit, IDCC is going to have to work through the process to see if they are able to amend.
Bottom line is that there is a potential $20 million tax federal tax refund that IDCC may be entitled to receive, and they would get it in 2009.
Great analysis by Tom Carpenter
not because it's positive, but because it is thorough, well thought out and the analysis is logical and realistic. It is a great service to us to get that type of analysis. Thank you Tom for sharing it with us and thank you Jim for bringing this type of quaility insight to the board. Whether the conclusion is optimistic or pessimistic is not the criteria for judging an analyst. The question is whether he knows the facts, understands the company and the industry and is logical and realistic in his opinion. Tom Carpenter has always met those criteria. It's okay if you disagree with him, but anyone who critcizes him for his opinion is just plain ignorant.
I'm very glad that it is very positive and it reinforces many of my opinions. I am very excited about IDCC's future. I am very grateful to have access to infomation like Tom's report because it gives me a reality check to make sure that I am still being realistic in my expectations and that there are no significant issues that I am missing.
So once again, a big thank you to Tom Carpenter for sharing his expertise here and to Jim Lurgio for creating and maintaining this board and bringing information here that is not available anywhere else.
Frank
Interdigital Joins Wi-Fi Alliance
http://biz.yahoo.com/bw/080226/20080226006328.html?.v=1
Pay a dividend to beat the shorts
Brilliant. The shorts have to pay the dividend and they will run and cover. Or maybe not.
Ever heard of something called ex dividend date? On the date that the stock no longer carries the right to the dividend, the stock price drops by the amount of the dividend payment, all other things being equal. Buy and sell orders are adjusted to reflect the dividend amount. The short is in the same position as he was before. He has to pay the dividend, but his short position has just appreciated by the same amount. Ooo, but he has to come up with cash so he has to cover. If these shorts are big enough to move markets, then they may have a few dollars hidden in their mattresses to finance the execution of their strategy.
There is one way to beat the shorts, and that is to make the business successful. For IDCC that means signing 3G licenses with the big players. I believe they are working at it, and the ITC is the method they are using to bring it to a resolution.
I am glad management is not trying to fight the shorts other than doing their best to execute their business plan. Don't waste resources battling the ebb and flow of the ocean's tide, build a good boat that will sail through anything.
Jeffree, my apologies
I said "I also know that it's not what is what you want, and therefore, you will reject it."
It appears I was wrong. Thank you for your kind response.
Frank
Shareholder loyalty
Just as management should manage their investments for their personal best interests, shareholders should invest or sell based on their financial situation. I thought that was obvious, but I'll expand a bit to be clear, since it appears my hypothetical response somehow was interpreted to include a call for shareholder loyalty.
Loyalty to a stock is completely illogical to me. Anyone who thinks shareholders should be loyal to a stock are nuts. Stock is in investment to make money. You should buy it/hold it when your expectations for it fit in to your investment strategy. The minute it no longer fits, you should sell.
To summerize, management's responsibility is to manage the company to the best of their ability for long term success. Investors, whether insiders, institutions, individuals or anyone else, should invest to maximize their own financial situation within the letter and spirit of applicable laws and regulations.
Dear Jeffree (from next weeks cc)
I'm Sure you have noticed that IDCC shareprice has been "under attack" since July, 2007...(when IDCC became "Inc.")...The bear raid by shortsellers has inflicted considerable damage to the Shareholders as well as the share price...Short interest is near 6 Million shares, even as the float has decreased...
and new licensees have been signed, and older ones upgraded to 3G...
My question is...Does InterDigital management pay much attention to shareprice, the shareholders, and manipulation in the stock market...???...Does IDCC have a plan or strategy (that will actually work) to stave off the relentless "pounding" the stock endures by shorts/manipulators...???
Remember that Shorts can now (since July, 2007, coincidentally) sell shares in any amount, at any time, by anyone...thanks to the SEC repeal of the Uptick Rule)
Some shareholders would like to see a "vote of confidence" by management in the form of some insiders Buying on the open market..additional share buyback (in the open market)...or a cash dividend (to provide incentive for All owners of stock to remain so)...Past "strategies", or lack thereof, seemed Not to have worked...
Is this stock undervalued or what...!??..and if you think it is, what are you doing about it...???...Can we afford to lose even More of our shareholder base...???
(the above is a portion of a "hypothetical letter" to the Company...since I no longer, out of frustration) communicate with this "communication" business, it will not be sent...but the questions Need to be answered I believe)...
(The following is a hypothetical reply from the company.)
Yes, we have noticed the decline in the share price. We do have people monitor trading in the stock looking for illegal manipulation. If any suspicious activity is noted we report it to the SEC for investigation. We do not have a plan to fight "shorts/manipulators" other than making IDCC as successful as possible in the long term. Countermeasures designed to foil the evil doers without business purpose would likely fall into the category of manipulation of the stock price and could lead to our being investigated by the SEC.
We do feel the stock is undervalued, so we are continuing buyback at these levels because we believe this is the best use of our excess cash. In the long term this will add value to IDCC by reducing the float, thereby increasing earnings per share. Cash dividends will be considered when there is recurring cash flow that will not be better used by expanding our business, repurchasing shares or making acquisitions. Our decision will have nothing to do with boosting the share price in the short term as that is not our mission. Our purpose is to make IDCC as successful as possible in the long term.
As far as your suggestion regarding insider purchases, may I politely point out it is none of your business how our management and employees handle their personal finances. However I will give you reasons why it may not be advisable for management to buy company stock in the hope that you will understand their needs and that their decision is a logical one.
Insiders are already under strict trading rules and when the hold company stock they are limited in their ability to sell it. Also they receive stock based compensation which often leaves their portfolio overweighted in their company stock. Their earning power is affected by company performance and in some cases their retirement accounts are also affected by the company's performance. Any competent investment advisor will tell you that a key to getting maximum return for limited risk is to diversify. Based on the above, one would have to be so certain of the company's success to disregard the risks of investment concentration that they likely would be trading on inside information. Also if insiders do buy stock, when are they allowed to sell it? The same investors that clamor for insider buying howl and complain when those insiders decide to sell any. So as much as we all love you, Jeffree, having management manage our personal financial affairs to help your investment without regard to our own needs seems a bit selfish on your part.
What's that? Yes, I can hear your retort - If the company is undervalued then management will be getting a good return so it will be good for them too. Well, Jeffree, while that is true, and while we do believe IDCC is undervalued, there is risk involved. If IDCC goes to 100 we will all be doing very well financially, and while everyone would love to have made more, great success by the company should translate into financial independence for management. Were we to double our gains, it would not have a great affect on our future. Our descendants yes, us no. However if IDCC does not achieve the success we expect, then not only will our jobs, our stock based compensation and our salaries be under pressure, but our personal portfolio will suffer as well. Let me assure you that if all that were to happen the lack of diversification in our portfolio would greatly affect our lives. So while the risk/reward in absolute dollars may be quite favorable, the marginal utility (increased/decreased happiness) of the investment is not so favorable for people in management’s position. For example, if you could flip a coin and if you win you get 10 million dollars, if you lose you get nothing. If you were offered 4 million to not flip, would you take it? Obviously the expected value of each flip is 5 million, so game theory says you should flip as your expected benefit would be a million. But you might quite rationally decide that risking the flip is not worth it to you.
I wish this could put this issue to bed, but I’m sure it won’t. I know this is understandable, however I also know that it's not what is what you want, and therefore, you will reject it. However it will give me something to point you to when you again ask management to do things to manage the share price instead of managing the company.
Getting licensing done
FTC CRACKING DOWN
http://biz.yahoo.com/ap/080219/apfn_research_in_motion_ahead_of_the_bell.html?.v=1
The Federal Trade Comission is cracking down on companies who particpate in the standard setting, agree to fair and reasonable licensing, then try ... seeking huge royalties .
Hmm, sounds like our own IDCC.
Doesn't sound like a good business practice, according to the FTC, and all the shareholders who bailed following the latest Nokia delays and set backs. I think Harry oughta check with the remaining investors, and see if they want to roll the dice all (in 7 years) or nothing (now and forever), or finally get this da#$@^% thing settled, now.
Doesn't sound like IDCC at all. They do offer FRAND rates - see IDCC's contract with LG. I am sure that if anyone else was willing to license on similar terms the deals would be done. MENS is pursuing all out war on royalty rates, only wanting to license on RAPIST terms (Refuse Any Payments, Incessantly Steal Technology). That doesn't sound like a good business practices to me, and I’m expecting that the ITC to agree. This is one investor who definitely wants to roll the dice with the ITC (should be done this year) to see if we can finally get some leverage to force companies to negotiate and come to agreement on FRAND terms. Until then, companies have a choice to pay IDCC now or delay and possibly pay later. IDCC has to create a compelling need to license because MENS is not going to do it without a gun to their heads. My hope and expectation is that the ITC is going to be Smith & Wesson for IDCC.
Your position is EXACTLY what MENS wants – settle for peanuts to get it done. Well F that. I believe IDCC has the goods. If they do, they should get fair compensation. If not, then they shouldn’t. But I will be pissed off if management settles like they did with ERICY for pennies on the dollar for 2G just as a decision was due.
Ed, it would be a great exercise
It may be a good exercise to see which of IDCC's TDD patents are geared toward TDD in a WCDMA sense versus TDD in a generic sense (and thus could be applicable to WiMAX/LTE)...
You are one of the few who are technically savvy enough to do this. It would be a great service to this board and all IDCC investors. Any chance you'd do that? Or will you merely sit back and snipe at anyone who suggests a TDD patent is applicable to LTE when you disagree (or are uncertain)?
I do appreciate your calling "bullshit" when inaccurate info is posted, but if you really want to help, then share what you know, positive and negative. Merely sitting back, raising an eyebrow, wagging your finger and posting pithy "in your dreams" contradictions to positive posts you disagree with is of limited help. So if you are willing to show JimLur the respect he deserves, make a contribution to this board with complete, balanced posts sharing your knowledge and opinions. If not, carry on with your adolescent naysaying.
Thanks Data
I look forward to the pics and your comments on the show.
Olddog wrong? I should've known better.
I should have googled it instead of relying on my memory. Never question MVP (Most Valuable Poster) Olddog unless you've done some pretty thorough research.
My thanks to you for again bringing accurate information to the board, even if it means I'm wrong.
Frank
Olddog made a mistake??
William Safire's the "nattering nabobs of negativity"
I think that was good old Spiro Agnew, Nixon's VP, that came up with that gem. In any event, your comment was right on target. I actually used that phrase to refer to myself recently.
http://investorshub.advfn.com/boards/read_msg.asp?message_id=26285261
IDCC seeks partial summary judgment dismissing count 12
I've forgotten the scope of this (IMO frivolous bordering on idiotic) action. If we win this PSJ, is this over? If there are no damages, then it seems that it doesn't matter if IDCC loses any of them, does it? However the word partial seems to indicate that this is just a small piece of the case.
Rant warning...
It's crap like this that makes people start looking at reforming the legal system. Lawyers have no interest in doing it because look at all the billable hours being generated by this asinine and ridiculous action, so on it goes.
No reflection on individual lawyers, especially those here. They didn't invent the system, they just work within it. However I think it's sad that billions of dollars are wasted on thousands of meritless actions that result in delaying justice instead of providing it.
Rant done.
Thanks to you Ghors, and Whizzer, Loop, Chartex, JK and the others with legal training and experience that share there expertise and time with us so freely. I truly appreciate it.
Frank
Shorts, bears and hedge funds
are going to do what they do. Apparently they have this incredible power and ability to move markets. Yet you have the magic bullet to stop these heavily financed and very sophisticated folks. You just have management buy some shares and they will run like a vampire when you hold up a cross. It's cryptonite to those supermen.
I don't pay much attention to those evil doers behind the curtain manipulating the market. You however spend your time whining on message boards about it. Here's a news flash, neither your posts nor management making purchases could ever affect such powerful forces. I believe that over time value and share price converge, so if they drive the price too far out of whack, I trade accordingly. Instead of wasting your time posting to get management to act (like they are going to listen to you or me) in an futile effort (if these evil doers have the power you say), I suggest you focus your efforts on what you do control, your investments. When they push the price low (like now), buy. When the pump it up so they can sell short, sell. But please quit playing Don Quixote on this board.
Kent,
I appreciate your well reasoned posts. I hope you will consider posting your opinions over here as well. I'm very glad that others bring some of your AB opinion posts to this board, but if they miss one then folks like me who don't have time for both boards miss out.
I know I'm persona non grata on AB, so I don't know if you feel I'm one of the nattering nabobs of negativity that made IHub unwelcoming to you. I hope not because I respect your opinion even when I might not agree. Thank you for sharing your thoughts with us faceless folks in cyberspace. It is appreciated.
Frank
Catchnrel, nicely said. I agree
First of all the notion that a "happy investor board" will somehow prop up the price a security for any period of time is absolute and utter nonsense. Do you really believe that institutional investors and serious private investors are going to BUY AND HOLD based on some happy message board climate? This is completely delusional.
The real goal of the board should be to seek and anticipate the relevant truth. If you believe in the company, you should have no fear of the truth. Now, that doesn't mean that the truth is going to be in every post, and there are indeed matters of opinion. When someone posts information or an opinion with which you disagree, you should attempt to explain why you believe differently or expose its inaccuracies. It's not always pretty, but in the end, this marketplace of ideas serves the greatest good for all.
Thanks Ronny
for another well thought out and well written post. I can certainly understand how someone nearing retirement would adjust their risk tolerance and time horizons. I do believe that the ITC action has a strong potential to bring the licensing issue to a conclusion within 18 months, which is why I think IDCC is a compelling investment right now.
Best of luck to you in all your investments and thanks again for your history of great contributions to JimLur's various IDCC boards.
Frank
Ronnie, thanks for your estimate
I really appreciate your input on this board. I miss your 10 compelling reasons to buy IDCC. Why don't you pull them out and see how many are still true. I think (and hope) that this is the last best buying opportunity for IDCC. It's not a slam dunk, but the risk reward is massively tilted to the positive at these levels IMO.
You have a great understanding of the financial situation and how new licenses will affect earnings. Play around with some conservative assumptions. For example, assume IDCC licenses 75% of the market at $0.60 a unit. Per IDCC's presentation, that would result in $420 MM revenue in 2012. Assume expenses are $240 MM, that leaves $180 MM profit, less 33% taxes leaves $120 MM. Estimate 50 MM shares and you have $2.40 per share income. Using a multiple of 20, that's 48 per share. These are 2012 numbers, so this represents a 5 year time frame, but that would still be a ~25% return compounded annually. This is not worst case, but IMO it is at the lower side of the bell curve.
Plug in your own numbers based on your expectations of the range and the related probabilities. I think you will find that the risk reward ratio at these levels is a compelling reason to own IDCC right now. Best of luck to you no matter what you choose to do and my thanks for your very valuable contributions to the discussions over these many years.
Frank
Rosiest glasses ever LOL
I mean, I can see misreading it initially, but sticking to that interpretation after having the very obvious meaning pointed out is too funny.
Ya know, now that I look at it, you may be on to something. At the end of the statement Mr. Merritt was telling us all that IDCC's price is about to breakout - he went into the secret Lewis Room (note how the name was added to the text) where companies who have great news pending go to discuss the strategy for best exploiting the price explosion!
I think at this point, we have to go to a breakout room, which is -- the [Lewis] Room. Thank you very much.
Position report of ITC staff counsel
Our next major feat is to convince the ITC staff counsel to join us against Samsung and Nok. It appears that we are doing well so far, but the status and position report of the staff counsel to be filed March 24, 2008, will be our barometer going into the evidentiary hearing stage.
Loop or others with knowledge - Why would the ITC staff report prior to the evidentiary hearing? It seems odd to this layman that there would form an opinion prior to the presentation of the evidence. Any insight to this process from those with knowledge is appreciated.
Frank
A great summation of IDCC today
B&S has IDCC one of the top ideas for 2008.
InterDigital Inc. (IDCC, Market Outperform, $30 Target)
InterDigital Inc. designs, develops, and licenses digital wireless technologies which are
incorporated into mobile handsets, semiconductors, and other wireless equipment. The
company is leveraged to the mobile handset market, more specifically the 3G subset of that
market. The global 3G market is expected to grow at a 17% CAGR through 2012 and by
owning key patents related to this technology InterDigital stands to see its royalty revenues
grow substantially in the coming periods. The company closed 2007 by licensing deals with
Apple, Inc. and Research in Motion and also received favorable court rulings against Samsung
in the District Court of NY and against Nokia in the English High Court. The company
appears to have carried this momentum into 2008 by expanding its relationship with SK
Telecom and announcing another 3G licensing deal with Giant Electronics, Ltd. While major
licensing deals with companies like Nokia, Sony Ericsson, Samsung, and Motorola remain
elusive we believe the pendulum could now be starting to swing in favor InterDigital. All data
points over the past few months have been positive for InterDigital and we believe that augurs
well for the company in its upcoming ITC case against Nokia and Samsung. In our opinion
the company’s technology has been legitimized and it is only a matter of time before the more
lucrative 3G deals are inked. The company is currently executing on a $100m share buyback
and we believe shares of InterDigital are undervalued and do not fully reflect the upside
present in the business model. We would point out that a deal with one of the remaining
unlicensed top handset OEMs (i.e. Nokia, Sony Ericsson, Samsung, or Motorola) would
increase the company’s valuation beyond our $30 target by a substantial margin.
Accurate, succinct summation of the last six months and realistic look at the next year. Puts my growing confidence and excitement about IDCC into well chosen words.
Data, re: IDCC getting Nokia license for ASIC
do you think Nokia will delay any final negotiations until they know how many Nokia patents IDCC needs to license for the ASIC?
I think Nokia will delay for as long as they can, using any excuse available. However I can't see it as a legitimate reason to delay licensing. Nokia sales are huge and IDCC's will be relatively minor. It's like a company is trying to buy a fleet of cars and they want to trade in a couple of old trucks. The value of the trucks is not going to hold up the negotiations on the fleet unless someone doesn't want the deal to get done.
Correct me if I'm wrong, but I can't see any way IDCC would enter into a cross license agreement where the rate on Nokia's license for IDCC IP would be reduced to offset the use of Nokia's IP by IDCC. They are seperate issues. However if Nokia wants IDCC to agree to pay the same rate that Nokia pays I say fine. IDCC will be happy to pay Nokia 5% or more on their ASIC sales. But if they want to cross license so that it's a wash or netting IDCC's rate against Nokia's, no f'ing way.
Eric, thanks for the lesson.
You obviously have a great deal of knowledge and insight in the industry. I'd love to get your feelings on reasonable expectations for IDCC licensing. I'm sure many others on the board would be interested as well, however if you'd rather not subject yourself to ridicule from some of the more enthusiastic posters, send me a PM or e-mail. If you're not able or willing to reply, no worries. I appreciate your contributions here and can't complain if you ignore my rather presumptive request for more free advice.
Some good reading on a wonderful day
See the referenced post from lastchoice and Whizzeresq's posts today. I'm as optimistic as I've ever been. This should make the holiday get togethers much better for those that have recommended IDCC to relatives!