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One last thought-Since joint vetures seem to be in vogue, why not LG and Samsung forming a wireless partnership and buying out IDCC to be their R&D arm.They would have immediate cross licensing capabilities with other oem's and who knows what IDCC engineers have in the pipeline for the future.Margins are the key to sucess and cross licensing is they key to margins.Probably makes too much sense to become a reality.
Quartz-Totally agree re producing chips. We are an R&D firm that has not reached its' full enterprise value and purchasing a foundry to produce chips is a sure way to the scrap heap of wireless companies.Stick to what you know best and maximize the value-which I still think will be realized with a buyout.Does anyone know of pure R&D firms that still exist and prosper from any of the past life changing inventions?Maybe I am wrong in not seeing that IDCC could become a household name, but I seriously doubt it.
L2V-Wish you would post more often because your line of thinking is creative and provokes more thought.My posting today was to draw out people such as yourself, to come up with new ideas as to where our investment is headed.I don't know about the "soon" portion of a buyout, because I have always felt that Nok and Samsung litigation would have to be resolved before an offer would be made.I also feel that the stock needs to get over $40 before any offer in the $60 range could be made by a prospective buyer.The question becomes one of "value" to both buyer and seller.The buyer is getting something that it needs in order to compete in the future and the seller is getting a premium beyond current pricing that reflects the time value of money and the uncertainties of future markets.My question is what company needs us the most, and what price are they willing to pay? The offer(s) will come after Sam is settled, but before any other large player signs-IMHO.
I'm never right on timing, so I don't attempt to play options, but I'm usually correct in reading the signs and I will predict that sometime before 2007 is finished, that we will wake up to a halt in trading due to an announced offer to buy IDCC.This will be the short trader's ultimate nightmare as supply will be drained and I believe that the first offer will be followed by another.Any way you shake it, whether mschere is correct and we sign all the remaining large oem's,or a suitor makes an offer, 2007 should be a good year for IDCC.Just an opinion.
Mschere-I don't know the answer to your questions, but do you really believe that either will be a player when the weeding out process is finished?When sectors mature,the strong survive and thrive and wireless will follow all the other great inventions of the past.The factor that works against a lot of companies is that there are too many variables that can not be controlled or adjustments that can not be made to stay in business.The powers to be(large oem's,standards boards,governments)make it difficult for more than a handful of companies to survive in a very competitive sector.New technologies are always a threat to make someone's invention obsolete, so the resources required to compete are great.Mschere, I really appreciate your research and input to this board and I respect your opinions greatly.Please give me your ideas of where you think IDCC is headed and particularly the price that can be realistically attained in the next few years.
F6-In response to your e-mail, that provision is to thwart a hostile takeover, and I don't believe that will be the case.At some point in the future, I think it will be clear to everyone that in order to be a viable force in wireless, will require merging with a larger company.I think Harry geared everything up for 3g, to make the company as attractive to a suitor as possible, and I don't think he believes that a 315 employee company can go it alone over the long haul.Increasing the size of the company is a long,expensive proposition that a guy Harry's age isn't about to undertake.So that you understand where I am coming from, I have been invested in this company for over 6 years,never have participated in options,and own a substantial number of shares, so I write this to hopefully provoke some creative thought that might change my mind as to where this is all headed.
F6,Mschere-Thanks for your responses, because I want people to disagree, but with some solid long term reasoning as to where the industry is headed and what part IDCC will play.I would love nothing more than for IDCC to sign up all the remaining oem's and for the stock to climb to$130,but it seems that the endless stalling by the major players is for a reason that involves IDCC being bought out.Remember, we are a very SMALL company that made a huge, early bet on 3g technology and I believe shocked the major oem's with the depth and importance of our patents.The industry can not afford another qcom and the logical solution for nok,mot etal is for a buyout by someone who can offer cross licensing. The shares were bought back for a reason that I believe ratchets up the ultimate price per share we will accept.Institutions will have the final say on an offer which I think will fall in the $60-80 range.I just don't see IDCC 5 years from now haggling over 4g contracts, and I think that Merritt's projections are for a prospective buyer to mull over.Anyone know how old Harry is?As for my credentials,it really doesn't make any difference, but I am a retired MBA from the insurance industry and all this is just my opinion.Hope to spur some creative thinking on this board rather than just reactive thought.Welcome more opinions.
We always seem to get caught up in the minutiae of legal proceedings while missing the point that it is all for leverage in negotiations.Samsung will negotiate the best deal possible from their perspective and so will all the others.Negotiation requires leverage and right now the only game seems to be creating doubt thru legal means.Wireless technology is a world changing event and will be the hottest investing sector for a long time,but a lot of the players today won't be around when the dust settles.My question is where does IDCC fit in the grand scheme and how does this affect my perspective on my investment expectations?Huge companies are now entering the wireless market and we are not talking just about cell phones.I cannot imagine a scenario that has IDCC as a stand alone when technologies converge and the market consolidates.This leads me to asking what company or companies would most benefit from owning rather than renting IDCC's patents and expertise going forward?Right now I'd have to say Samsung or other Asian companies that need cross licensing capability-this would also be a big relief for Nok,Mot and others.Would like to hear other's ideas, because if you think Harry is in for the long haul,you are crazy.With instituitions gaining greater ownership in IDCC,a double from here is a no brainer.Expect an offer within a year and let the bidding game begin.JMHO
The major showdown in 3g is now centered on the concept of fair and reasonable rates for ipr. If you are strategizing for the remaining large oem's and you know that you will have to include IDCC in the mix, does it make more sense to negotiate a contract similar to LG structure before dealing with qcom in the courts, (giving everyone a measuring stick of number and quality of essential patents translating to a fair and reasonable rate) or is it more prudent to deal with qcom first, with the distinct possibility that paying IDCC after qcom's rates are established would cost more in the long run-not to mention infringement risks? Since qcom is trying to hang on to a concept similar to their cdma monopoly rates, I believe that a new way of structuting ipr is what the large oem's are after and that they will deal with IDCC first, to set a precedent and put pressure on qcom to reduce their rates. JMHO
IMO-Today's announcement is huge for IDCC,not only for the amount awarded, but more importantly it removes the last stumbling block for companies to negotiate their own 3g deals without competitor tie ins.The slate is clean and let the negotiations begin.IDCC's willingness to negotiate fair and reasonable contracts that are flexible(ie:LG) will be used as leverage against qcom and I would not be surprised that a 3g announcement is coming soon.With all the big boys still out there, our future is bright, and I have to believe that we are on several radar screens as a company that is ripe to make an offer on.Don't be swayed by legal maneuvering such as the bogus Lanham action or subsequent sam actions, because they all have the same basis behind them, and that is negotiation leverage. No doubt there will be several more attempts to steal shares from long term shareholders(July 7 and 10), but I honestly believe that 2007 is shaping up to be our best year ever.GLTAL
Corp I don't think that nok's 3g had a time provision per se-only a trigger event. If IDCC can't license a trigger at some point, then really we are talking a whole different ballgame regarding our patent strength. My feeling is that all this conjecture will be negotiated as usual and that the agreement by IDCC not to sue for infringement is in some way connected to what nok is trying to accomplish with qcom. Agreements henceforth will be of a different nature and I think that the bottom line for IDCC is to free itself once and for all from triggers and mfl. JMHO
Corp-Please explain point number 5-I don't recall that there is a time stipulation regarding 3g trigger. tia
Thanks olddog, that is the guy. So lets see if we get a rally soon that extends to labor day.
You are correct, unless arbitration decides that the tag along provision that sam asserts that it has, is upheld. This is, I think, one of the hang ups that is being discussed now.
Did anyone see the interview on cnbc the other day with a cycle analyst that called the exact dates of the recent high and low of the market. He further predicted a bottom this week with a move up until labor day, with a downturn until late in the year when a powerful rally up will carry us to over 14000 on the dow in 2007. I believe his name was Nenner and he said he does work for Goldman.Anyone know about this guy? tia
quartz-I agree that sam has a stand alone contract with IDCC, with the same options that nok had, but I will also point out that nok preferred to negotiate a lump sum and opt out of its triggered 3g contract. I believe that sam will do the same and we will be done with triggers and mfl clauses.The bottom line is that these things ALWAYS get negotiated and when they finally do, we will see that an unemcumbered IDCC will have many more options available to monetize its portfolio. JMHO
IMO-The most important result of the Nok settlement was getting rid of triggered contracts and mfl clauses.Samsung is making a last gasp effort to hold on to mfl rights, but in the end all will be negotiated and a new era of structuring agreements will continue. I think that is what the nok/qcom showdown is all about and I would expect the end result will be a more creative approach to licensing ipr.IDCC is no longer in the "if" camp regarding its technology and the need of all 3g players to pay for the use of their ipr.The only questions are when and how much and as the industry continues to consolidate, we will see more creative ways to license the existing technology and utilize an on-going relationship of enhancing and advising.Once Sammy is behind us, I believe we will be in play. The landscape is changing and we got rid of the albatross(NOK)that prevented any flexibilty in structuring agreements.The old days are gone forever, whether qcom acknowledges this or not. I expect that a nimble company with our patent portfolio and no requirements for a chip will offer many great opportunities going forward to structure these new type of arrangements. GLTAL
Wireless wazoo-Good find and thanks for posting.Would like to hear from some of our tech gurus including qcom expert ed ferari. Hope you can post part II.
Thanks shill/steffie: Just when I was getting a little down on my investment here, you come to the rescue with a bunch of rambling nonsense. I always look to you and Ams as contrary indicators and right on cue you come up with a beauty.Thanks for your usual lack of creative thought, you've made my day and I'm even more certain that IDCC will break out to new highs very soon.Have a great day and thanks again!
I hope that WM's comment that our business model allows a large portion of future deals to fall to the bottom line is fully comprehended. The potential for revenues to jump sharply out of nowhere,without expenses increasing,should make any analyst think twice about down grading with targets below current prices.The old way of analyzing revenue flows and percent increases will not cut it in predicting the future value of this company.We are in the sweet spot with 3g sales continuing to expand and an almost mania regarding cell phones worldwide.Because our portfolio of patents is so diverse and ahead of the curve, we are going to attract a lot of attention in the consolidation game.Look out shorty, just once I'd like to see a huge gap opening and watch the scrambling begin.Pay back can be a bitch!
Looking on the bright side, I think the cc did a good job of diffusing a couple of potential negatives, namely the back dating of options,and the bs notion that our revenue stream would dry up at end of 2006.If the company is willing to buy back 150 mil shares at an average of 28.85 a share, then I don't think you can get any clearer signal from management about what they think is on the horizon.We still have $50 mil left to buy back shares, so the end result should be somewhere near 50 mil shares outstanding when the buy back is finished. This little company with plenty of cash and a low amount of outstanding shares will definitely gain some attention from the buyout funds and others. All that it would take to put some fear into the shorts, would be a formal offer. We don't have to take it, but the manipulation game would be dealt a severe blow. IMO
Since the revenue numbers we will get will be the actual from the first three months of this year, I find it hard to believe that mgmt guidance would have been on the high side and will be very surprised if we don't beat the guidance numbers.Hopefully guidance for third qtr will be an even higher number and if not then someone is privy to this ahead of the cc.
Spencer-I don't think a suitor could justify the price IDCC would require for its' ipr at these levels. I also think that any suitor is waiting for Sam to be concluded.Loto-the magic words are major 3g license(s) and I think that the big boys will stall because they know that someone will buy out IDCC.This is all just speculation on my part and your conclusions are just as valid as mine, but I just feel that after Sam, the jockeying will begin re: qcom,nok,mot etal with the field of players remaining diminished by consolidation. In a typical consolidation phase only companies with a monopolistic position can go it alone and our little company does not have that. Maybe this latest market action was a shot across our bow to remind us that we can be dropped faster than a Joe Frazier left hook.The wireless marketplace will ultimately dictate our value, not the analysts in my opinion.
Hook-I used to dream the same dream you are,but I just don't see the split/double fantasy coming true.The reality is, we are a small company whose value will be derived from the on going consolidation.There are just too many roadblocks that the powers of the industry can put in front of us to thwart our progress.This company was re designed to take advantage of 3g technology and I believe everyone in the industry knows that our portfolio of patents is not only real, but very valuable.The industry also does not want another qcom to deal with, so the question becomes what is best for the powers that run this industry and the conclusion is, that somebody needs to buy out IDCC.I don't believe that a hostile attempt will be made, and I do believe that management sees the same handwriting.This scenario is just too logical and if put to a vote, us little guys won't have a thing to say-what institution or mutual fund wouldn't love a double in the next 6 months and be done with it.Hook-you won't have to keep the new company's shares.
IMO-Mergers and acquisitions is the name of the game as 3g takes hold in wireless worldwide.Do you really see IDCC slugging it out piecemeal over the next 4-5 years or is the handwriting on the wall for the company to be acquired.Once the Sam arb decision is rendered and the amount owed established, essentially IDCC is unemcumbered and offers a clean balance sheet with a powerful patent portfolio to be available to the highest bidder.A consortium of licensees may deem that it is less expensive to buy out the R&D firm than to pay licensing fees and that the cross licensing options the portfolio brings is more than worth it.What is the time value of money to the shareholders, not to mention the uncertainties of the markets, the world and new technologies.The way our stock price can be whip-sawed on no meaningful news is another reason that we should look at another approach to monetizing our assets by presenting our value as an enterprise value to the M&A market. I don't know what a fair price would be, but it is time to find out. Would appreciate comments.
Currently we are the darling of the shorts/hedge funds and my concern is what can be done to prevent the whip-saw action we experienced this past month. Buy backs and the prospect of new deals and a favorable arb decision has not deterred these forces from playing us like a fiddle. Selling shares by management will always be with us as long as options remain as a compensation tool.Options are a fact of life in today's business world, so to believe that this is the root of all evil is simply naive.The one event that would upset the short game is the evaluation of our company's enterprise value.What is our portfolio of patents worth to a have-not in the wireless game? Instead of a piece meal approach of licensing, why not find out what the whole is worth on the market place? Waking up to an offer considerably higher than the closing price would send a clear message to the manipulators that new licensing deals is not the only way to evaluate our company. Once the sam arb results are known, there would never be a better time to find out just what our assets are worth.This is of course JMHO.
Will you please give this insider crap a break? Under your thought process mgt could never sell because they know more about the company's situation than the rest of us-and for the record they did not sell at the high,the price increased by $4 after their sale.
Hey Ams-Since you said that any FOOL could see the huge number of shares given to management and the actual costs to the company along with the dilution of share capital,YOU should be able to provide us with these numbers and please explain the exact effect on share price at any given time. TIA.
And how do you know that they don't? Sometimes, you can't see the forest for the trees, and right now I believe that the big picture is rounding into form. We will see who is correct, your short term negative outlook or my positive long term vision as you call it. It is much easier to acquiesce to short term pressure and magnify what is immediately in front of you, than to see trends forming and future catalysts coming into play.Why don't you give us all your idea of where this company is going and where we will end up in the scheme of things?
There is definitely a changing of the guard going on in tech, with the old stalwarts, Intel, Microsoft, Dell etc. having to redefine themselves due to converging technologies. This capitulation,IMO,is a very good sign for IDCC. When a shift like this occurs, large companies with lots of cash must make adjustments, and the result is usually a consolidation of future players. With tech getting hammered, an oversold Nas,and our earnings continuing to rise, the time has never been better for an explosive move up. Don't let naysayers steal your shares, because,imo,that is what they just tried to do with the downgrade. There will be a premiun added to our value on speculation of a buyout because this company is a gem for any future player in the multi-media computer business. I wouldn't be surprised if another attempt is made to confuse the long term prospects of this company, with some short term FUD.Hang on, the future has never been brighter, and the most important fact is that the macro shift has begun for our industry.
In trying to understand what has gone on with this stock in the past few months, I looked at the historical prices and volumes going back to the last real event that impacted the fundamentals-the nok settlement. After profit taking, the stock settled at 25+, until may 4th first qtr earnings bumped the stock to 28+ and this high coincided with the nasdaq high of 2345. Volume once again dried up and drifted back to the 25-26 range until May 31st when 2nd qtr projections were announced and volume skyrocketed for 17 straight sessions with the average being 3 to 4 times normal and the price ran from 26 to 34 in a down market.Maybe a new awareness fueled this speculative runup(Motley Fool etc.), but really no new news, to long term followers of IDCC,was released.Nine straight sessions followed under 1 mil in volume, but we drifted a bit higher until volume again spiked July 7th and we all know what has happened since. If you look at where we were on may 9th(NAS HIGH)28.10 and apply % decrease(14%) we are actually in line now with the market and of course thruout this roller coaster ride no news has been issued to impact fundamentals. As painful as this has been, I feel a little better that today's price maybe is not so out of line and with good news we will rise again to new highs.The mechanics of July7th and 10th are still suspect, but the FUNDAMENTALS are still intact and the prospects as bright as ever.Good Luck to Longs.
The swift $10 haircut we received on no fundamental news, is a reminder to all that we are a small company with a very fragile valuation. Is this coincidence, or a warning shot fired by a would be suitor? My guts tell me that this company is being looked at by someone as a buyout target and in reality why wouldn't we be? The timing is perfect, not only from a company standpoint, but also from an industry one as well. Everyone has their price and I don't know what that would be in IDCC's case, but I do expect that sometime soon, a premium will be built into our valuation for that speculation. Huge buyout funds are being accumulated, and the action is about to begin. In my opinion,we would be flashing on everyone's screen, as a prime target for buyout, with a strong cash position, no debt, low float, and an ipr portfolio in a strong sector that is about to consolidate and converge.The frustration level is at a high among longs, so in my opinion, don't be surprised if we start hearing rumors.
If a buyout fund has us in their crosshairs, monday's action sure was a fortuitous event. What better way to send a message on how fragile a small company's valuation can be, than to see a drop of over 20% on no fundamental change.
With the proliferation of buyout funds being created, and some of them being massive(Blackstone Group-$30 BILLION), can anyone tell me how they usually operate? Do they take initial positions via the market and then attempt to takeover or do they simply make a bid behind the scene and the offer is then made public via vote? Is the company then taken private, if the offer is accepted? Seems to me our little IDCC would be on these groups'radar screens as a screeming buy at at least double today's price and probably a lot more.The company is a cash cow, with low float, and a future valuation that could go thru the roof in a growing sector. I would think that the bottom line would increase if the company was then taken private. Could anyone shed some light on how these buyout funds usually operate, because I think this is going to be the next big explosion on Wall Street. TIA
A person would have to be a complete idiot to buy the justification for fri/mon actions as simply a "short attack".Without any negative news, and the possibility of another LG coming out of nowhere, why would you choose to short a stock like IDCC, unless you had the blueprints ahead of time. For the kind of volume we saw on monday to occur, there had to be a catalyst and the trial balloon for that catalyst was conveniently floated on a friday.They were able to test the waters and guage the ability of the market to absorb the selling of the priveledged clients. Sure seems like the sellers were lined up Monday morning, waiting for the downgrade to hit the wires, and the onslaught began. So a couple of questions arise:(1)When did pj analysts decide to come up with the downgrade(2)How did they arrive at a $25 price target when the market was giving it a $35 valuation(3)What entities profited most from this action(4)What kind of communications, if any, were made to those that profited, before the downgrade was issued.(5)How can 10+mil shares be justified by a downgrade?
The fact that we won't generate 10+ mil shares when actual positive news is reported, in contrast to an opinion of maybees and coulds, should tell you something about today's action. To generate this kind of volume, out of nowhere, without actual news,requires a concerted effort and should send flashing signals on the SEC's screens.This is not a normal reaction to a poorly written downgrade by an analyst.
What a perfect scenario for " big money clients" to buy into the next darling of Wall Street. Just before a Samsung deal and several other licenses, the stock takes a huge plunge on huge volume. Just coincidence-time will tell. If you think the big money boys take the same risks as you and I-think again. I would love to know who the owners are of the 10mil shares traded today. My bet is, this report after insider trading is the excuse for the hedge funds to drive the stock down so that big money clients can get in at a huge discount for the next 4 bagger on Wall Street. If they had waited any longer, the train would have pulled out of the station for good. I would not doubt that we will see some major houses with new coverage of IDCC-THIS IS HOW THE GAME IS PLAYED. If I'm right,the scare tactics have allowed brokerage houses to reward their big players with little or no risk and we are about to take off for sights not seen in a long time. We may look back at July 10 2006 as the day we were brought up to the major leagues.jmo
Let's all hope that WM has several deals to announce soon so that we can get rid of analysts like those at PJ. Discrediting an analyst like this quickly after his report was issued will go a long way to stabilize our value and show that issuing reports on opinions without facts will no longer have credence in the market place. Until this is done, we will continue to be at the mercy of hedge funds, playing us like a fiddle, and laughing all the way to the bank. jmo
What does this type of price action say about how the stock market really works. A report by an analyst,with the key words used in the report being "may" and "could" and the report is basically an opinion without any facts, causes a $10 drop in share price. His conjecture may be totally wrong regarding how the oem's view waiting to see how nok and qcom play out. The opposite imo is more likely, in that licensing at fair and reasonable rates with IDCC will set a precedence to be used as leverage to knock down qcom rates. There is no way to prove what this guy's agenda is or if he is a front for someone else's agenda, but simply the fact that a vague report such as that issued, has an impact this large, is a real indictment on how phony the stock market has become. The only thing that matters to the market is that there is constant volatility-trading, not investing, is the new mantra. Please tell me how this is any different than any other form of gambling.
The last time we got blind sided by some innocuous report(Ford Research), shortly thereafter positive news was issued (Nok settlement), and we shot back up. Hopefully, the same will happen again, but what bothers me is how drastic the down movement is and on huge volume. Without news to substantiate this kind of movement, it seems like a concerted effort to drive the price down before good news hits. The question is by whom-hedge funds that thrive on volatility or maybe a suitor about to make an offer? As usual, we are the last to know what is going on, but if anyone here can offer up any explanation as to the timing of this drop, without blaming it on insider trading and/or PJ downgrade, please let us know.