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I think Google got too big too fast for their own good. Companies like Apple, Microsoft, Motorola, IDCC have been at this a long time and understand the importance of developing technology for their benefit. Google didnt invest much in phone technology, now that they
sponsored a rival tech that infringes work that other companies spent money to develop, they whine like an immature child. They have
to grow up quickly, or they will be out of the android business. Apple or Microsoft will rule with the IDCC patents going forward, and they will be left behind. Hopefully, they will man up for their group and hit #5 soon.
No stop necessary. The BOD nor the shareholders are going to approve the sale of this company for 3.3B (4B less cash). There
will not be a sale of this company under 5.2B (Nortel 4.5B plus cash).
Nickyc, I think it has to happen. Maybe now it is forming. No single
entity in the android space has the finances to go up against Apple. Apple can spend 10% of their cash and cost Google 20-25% of theirs. And it goes way up for the other android companies. If Sammy and the rest want in, they are going to have to partner up with one another to stay competitive.
Zip,
I pointed that out in my post- there are 3 major bidders, AAPL, MSFT/NOK and GOOG. Now Sammy wants in, but I dont see the finances
behind them to go against the 3 majors. MSFT will decide things in
their own interests. Maybe Sammy decides to throw in with GOOG,along with others. Happened at Nortel, may happen here. If so,
then we have 2 or 3 sides with comparable firepower.
Maybe now the grand coalition for Android is forming. Samsung by itself cant buy IDCC against AAPL, MSFT/Nok or GOOG without going
into a big hole. But the android makers have the most to lose here. It is time for Google, Samsung, HTC, LG and the android app marketplace to get together to take on Apple, who should be the main player on the other side. That is the battle we want- world
cell domination by Apple, or survival for the android group.
I had to adapt that movie scene to fit the crazed nature of the posts I was answering this weekend. Being the staunch defender (like Belushi) of what was right to do in this situation including a slightly crazed streak-you fit the bill. Any other characterization of anyone, living or dead, was completely coincidental.
Let me think about it. Animal House easily came to mind after this weekend's posts.
Good one, Nuke. All crazed movie variations on our struggle welcome.
Thanks Data, at least someone has a sense of humor around here.
A little comic relief, adapted from the original.
Count: War's over man, Google offered $75.
Joel: Over? Did you say "Over"? Nothing is over until we decide it is!! Was it over when Nokia bombed Pearl Harbor? Hell no!!
NJ: Nokia?
Data Rox: Forget it, he's rolling.
Joel: And it ain't over now. 'Cause when the goin' gets tough.....
the tough get goin'! Who's with me? Let's GOOOOOOOOOOOO...........
What the F happened to the IHUB I used to know? Where's the spirit?
Where's the guts, huh? "Ooh, we're afraid to go with you Joel, we might get less money". Well just kiss my a** from now on! Not me! I'm not gonna take this. Jim Lur, he's a dead man!! ShallowMind, dead! DMILLER-
NJ: Dead. Joel's right. Psychotic, but absolutely right. We gotta get value for these patents. Now we could do it with conventional weapons that could take years and make us millions in share value.
No, I think we need to go all out. I think that this situation absolutely requires a really futile and stupid gesture be done on
somebody's part.
Joel: We're just the guys to do it.
Zombywolf: Sell the company for $75 a share?
Joel: Shut up, Zomby. LET'S DO IT.............
adapted from Animal House
mostly written by Douglas Kenney, Chris Miller (no relation), &
Harold Ramis
Do you think management would recommend a price below the Nortel value for this company?
Count,
I cant see many sane shareholders voting for a buyout about half the price Nortel patents went for recently (less cash). At $100, you might see some action, $150 probably, $200 definitely.
$75 a share?
You must be saying that for shock value, as most of your posts are reasonable in nature. That means we sell at $61 plus cash. $61 is about $2.75B, roughly 2B less than a bankrupt fire sale price of
1/3 value SIMILAR patents just sold for. That doesnt include all the new work either. If that is the top offer, management will stand up from the table, thank them for their time and rightly leave. No one has to worry about IDCC accepting a $75 offer or $750,
as neither will happen. This company will only be sold for real value or not at all.
Who in their right mind would sell this company for $75/share? That
would be less than Nortel, and they are bankrupt.
Nicmar, look at the whole pie:
1) 100% lock up of 3G/4G/LTE phone payments for IP
2) 100% lock up of all carriers on "better pipes, bigger pipes"
3) deals with all tablet manufacturers
4) deals with all video media operations on the web and phones
5) deals with all manufacturers of machines that need to
communicate wirelessly with one another.
You might be right that it wont be $23B, probably more.
Micro,
The Great One was a master of all music and the Government too. Lets hope our company has the same B***s he had to take on the
establishment and win.
Mr Mind, I am one of those crazy posters that thinks this company
is actually worth something more. I have been here since 1999, and have witnessed the ups and downs, read pumper and advocate posts. You are correct in your evaluation of this stock prior to this month. Most of that was due to Harry C, the $250 poison pill and
IDCC trying to be a good guy in license discussions. Harry did not have a particularly great regard for shareholders, so nothing was really done to advance our interests. The poison pill was successful in eliminating meaningful discussion on purchase of the company, as there was nothing to use to put a value on the company.
No one could use the QCOM situation, while similar, their large growth was because of chips rather than IP. So that left IDCC with
licensing their tech to get paid. It is quite obvious that they were good at getting the low hanging fruit, but climbing the tree was a problem. They wanted to take the high road with barbarians, and rightly so got their nose bloodied. They tried to fight back a little, and those efforts are waiting for effect at the CAFC.
This month things changed. As of the beginning of the month, Harry
is gone, the poison pill is gone, a potential yardstick for valuation has come, and IDCC has grown big set of cajones. Ihave to say that Terry has been a bright shining light to shareholders interest. He has done a lot more to furthur our interests than Harry in this regard. Dont get me wrong-Harry was a god to this company and saved it in the dark days, but pro-shareholder action was not his way. Poison pill is gone, so the company can sell for your feared $75, or "gasp" $700. Nortel was the important catayst
to finally figure out some type of value for the company. It put
a dollar figure on what is surmised to be a lesser portfolio in
2-3-4-whatever G IP. That number is 4.5B. As you correctly stated,
we are going to find out what our value is, relative to that number. Since that is the number for now, add our cash (which is real) and you get 5.2B. That is $100/share and the resonable floor on valuation. If it is correct that the patents/company are of higher value, then quite naturally the company should receive more, than less. That evaluation is going on now, and it is a
conservative bet that it is more. Some of us like to think, if it
has twice the value at least, you should get twice the payment or dont sell. That said, we are now at 9.7B or around $190/share. Some "Wall Sreet" types are valuing us as high as $167/share, so
this number is not out of line. The real problem is what is the rest worth? No current valuation yardstick is available like Nortel, so who knows? But the fact remains that there is value there. So whatever it is-you have to account for it in a sale. It
is then obvious that we should go for double digit billions in a sale. Because of that, I believe we will not be sold. I asked
a question in a previous post about being too expensive to buy. It
took consortiums to come up with Nortel buy out cash, how are they
going to afford us? Are all the $100/share advocates saying we should sell our company for less because that is all the money available? If this company sells correctly, you are looking at $12-13B- no one has paid that kind of money to date. So, we keep
our company. Company did their duty-put the company up for sale, but no one can pay for its value. That is ok, because now they have grown a big set of cajones, and are finally getting up off the canvas, and throwing punches-note the recent ITC actions. We
are going to get our value one way or the other, someone can pay for it now, or we will develop it ourselves. You can speculate on
future cap value in you investment decision. Note that QCOM is at
94B market cap, dont you think we can get to at least 25% of that
with everything you have read on this board from GREAT advocate posters? That is $23B or close to $700 a share. Mr Mind, Count, et al, you need to get a grip on yourselves. It's going to be OK.
How about this Deal, IDCC?
We sell our phone oriented patents in 2-3-4g for what they
are at least worth- 2x Nortel= 9B. Keep everything else, the cash,
the compression work, the M2M, engineers, 2nd shift janitors, ect.
and go on with the future work. Distribute the 9B as a special dividend ($200/share) and we get to stay here and b***h about
Verizon, Frigidaire, Zenith, Magic Chef et al not paying for tech
for the next 10 years instead of Nokia.
You would be concerned about 20% dilution of a $609 stock one for
one?
$175-too low.
I dont see management selling the 2-3-4g patents for less than
twice the Nortel value. It has been asserted that these patents
are AT LEAST twice the value of Nortel patents sold at auction.
That means a sale price of 9B, wich would equal about $200/share.
Add 700 mil in cash- $215/share. That leaves everything else, the
engineers, the labs, the compression work, the M2M work-dont you think they are worth more than nothing? It is possible that IDCC
may sell the phone patents only and keep the current work. Probably
depends how crazy this gets.
If the author is correct, then we are about to see a monster battle for IDCC. It appears that Apple has the ability to shut down Android
as a competitor if that pleases them. By not licensing its patents for any price-Android market is screwed. Unless they can find some
patents that Apple needs, and threatens to shut them down. Google
has to combine with all the affected Android businesses to get IDCC.Apple gets us- game over. It has to be worth double digit billions for Apple to get rid of Android and rule the smartphone world for years to come. It is worth more than that to the Android world-survival. Game on!!
If he heads down to South Philly after the next ASM and makes
a sandwich on Sarcone's bread-he'll change his tune!!
Felix,
A start in the right direction today-filing a complaint with the
ITC and an action in DE. The only problem I have is they left some
off the list. The day after the positive CAFC decision comes out, they should give every infringer a 90 day price to settle. After
that we should then start the same with each one of them. Do you
think GOOG or AAPL would put up with them? Then the real value will start to emerge.
NJ
You and I are of the same mind concerning the real value of our company. I have been trying to make a point in recent posts of
our value being in excess of $300/share, and if no one comes up
with it-keep the company rather than sell for a ridiculously low
price ($100/share). All it takes is some calculations based on
info already out there- ie 1.2B for .1% to agree with your
projections of $700/share value. QCOM's cap is 94B, we should
be able to get to a third of that or more with our tech going
forward. Who is going to pay 30B now for it? I can wait a couple of years for that value range-can IDCC?
The only blame that management could be accused of is selling too
cheaply to Google and not bidding up the value. If our patents are
at least twice as valuable as the Nortel patents-get twice for them or dont sell. If we have world class tech in M2M, compression-get fair value for them. If we have 500-700MM in the bank, add that to the price. Since all that adds up to at least 13B-the management is
not responsible for anyone not willing to spend for fair value of this company. We will go forth and prosper with our own technology.
What ever happened to "the next QCOM". I can live with fair value or
future value, not a "fire sale" for no reason.
Count,
Accepting 13B would be in line with their duty. Accepting half
that (the numbers circulating around the boards) would not. But
that wasnt the end point I was trying to make. Assuming that the
board decides to sell at a real value of the company (13B), can
anybody realistically buy it? Should the company be sold at a lower
price for that reason? If so, shouldnt we keep the company and reap the future rewards? Be what it is supposed to be-the next QCOM-look
at their market cap, they didnt sell out on the cheap. That cap
makes 13B look like pocket change.
Badgerkid,
Those numbers arent crazy. If you assume that Nortel sale numbers
are a starting point- we are at 4.5B. Take a look at all the pie
graphs on IP ownership in previous posts. They all show a minimum
of half the amount of IP with Nortel compared to IDCC. Obviously
if you have twice the value, you should get twice the price. We
havent even gotten into the qualitative difference, which is
potentially greater than the volume. Now we should be at 9B minimum.
As I said in my initial post, there are other values in Interdigital. BM has already stated on numerous occasions that there
are markets beyond handset IP they have developed strong technology.
He has spoken of multiple areas, each addressing huge markets. These
are technologies that could dwarf phones. What is worth now? A lot
more than nothing. I conservately estimated a couple of billion-probably a lot more. If you put 3B on that-12B. Add the cash-12.5B
minimum. You are looking at what you feel is great from your end-$100 range per share. Everyone is missing the big picture (except NJ), and that is what the BOD has to evaluate in a sale. If you put your
house up for sale in a great neighborhood that sells fast, would
you accept 50% of your sale price?
My exact point. If the true value of Interdigital has to be considered by the BOD, then is that value (north of 13B) not
in any purchasers best interest?
Could Interdigital be too expensive to buy?
I dont know if this topic has been addressed by anyone. The
Nortel auction put a price on their (not Interdigital's) IP
at 4.5B. This was basically a fire sale bankruptcy auction that
sold property for whatever they could get. It can be inferred that
if Nortel was a going concern, they would have hired top sell experts (sound familiar?) and gotten top dollar, or at least more
than a fire sale. It has been noted that IDCC has 2-3 times the
quality and future applicability of their IP over Nortel. That
does not include the IP in areas such as compression, m2m ect.
In this situation, there is a going concern with a BOD that has
a fiduciary responsiblity to maximize the sale price. If Nortel
"fire sale" of mostly dated IP at 4.5B, Interdigital IP should
be worth between 9-12 billion dollars. You have to then account
for the other work in compression and m2m and who knows what they
are hiding, that is a couple billion more. Add in a half billion
cash and you are up in the 13-15B range. It took a monster
consortium of companies to come up with the 4.5B for Nortel patents. Agreed that Apple, Microsoft, Google have billions in
cash. But to pay the real IDCC value, Apple would have to use up
20% of cash, Microsoft 30%, Google 40%. I dont know many other
companies that would spend that % of cash on an purchase. If the
IDCC BOD accepts a purchase price below $13 B, then IMHO they have
breached their duty as a fiduciary in this situation.
Count,
I agree with your cautions, as I was there in the 1999-2000 run up
and down with this stock. I cant tell you how many times I kicked myself for not taking profits somewhere up in the 70's then. However, the Nortel auction has created a little different scenario
this time. Similar patents have been currently valued at 4.5B, and
any sale of IDCC has to be north of that. That values a share at $100 minimum. I think your cautions would be more applicable at that
level. It becomes speculative at that point, and one would have to
think about where to go from there using your well described caution. It would be great to hear from more longs on thoughtful exit strategies with this stock.
Wow, a little perspective needed!
Some you guys that I respect on this board are at each other's throats because of recent events. This stock was valued at around
$75 on 12/31/99, and went south to the 5's by 12/31/00. Now that is
a decline-nothing like what you are seeing now. I was a shareholder then (and still) and dont remember anything then to what I am seeing now on the boards. Since then, this stock was a 10 bagger in
10 years-with a dividend to boot. Obviously this stock can go down fast and go up fast. At the 2010 ASM we were in the mid 20's with no dividend and now we are up 50% in value with a decent quarterly dividend. I am not a fan of some things going on with management and
execution-but I am sure we dont know everything going on. For years we were frustrated with Nokia, then out of the blue we get a monster
payment for 2g and all is well. We are in a similar wait on CAFC, but nowhere near as long as the Nokia 2g payment wait. Just like the Nokia 2g payment was destined-so is a remand from the CAFC. When that happens-up we go again. I know it is frustrating to wait, but there is nothing else to do but sell and leave or buy more
and wait. Complaining over dumb stuff, and fights among friends isnt going to help. I'll see who is there with me at $100+/share (maybe mschere was right-only 10 of us will be left).
OK, Everybody Relax
We have seen this before. How many times did the share price dip
into the high teens for no reason when we were in the 20's forever? Back then we were waiting on anything to happen- Nokia? Ericsson? Sammy? Unknowns (Apple, Rimm, ect). Then we get some gas like before (CAFC-anybody still think we aren't gonna win?)and we reset at a new higher level. Right now were are at the point where this stock is giving us a chance to use some dry powder as before- I went in for some more- anything buys below 40 will be a future gift. Take advantage.
How can RPX be considered a major potential winner of Nortel's patent auction? They have less than 1/10th of IDCC's cash in the bank and already have 250 million out for other patents. IDCC has 10 times their cash and went in debt for a ton of money more in prep of their bid. And they might be light with their other partners vs Google on the bid. Does RPX know more about raising cash for bids than IDCC?
How about this translation:
The sector (industry) has changed, now Nokia has to adapt to it faster.
Nuke,
Were you Corpgold in a previous life? Thanks for all your posts-I read every one of them and they are great. The resemblance is uncanny.
That guy better not look at the percentage of my portfolio in IDCC. He would run home to Momma.
Ron,
Actually, he didnt go into much detail, outside of commenting on his leadership during that time. I became a shareholder just prior to the runup in late 1999 and wasnt around during the 1998 trouble he referred to. I think his point was to honor Harry as someone who was strong and kept the company solvent through cost cutting measures.
His point was more not to worry about the ending date on an initial deal-that doesnt mean they will not renew if it hasnt happened by then. It means they are still talking and working toward the best deal for each-think Nokia for every expired deal-wait, dont do that-I wont have any fingernails left!!
I maybe be incorrect about his election. If both he and Belk were up-Belk got more votes. They announced the vote totals for both-I assumed they were both elected.