InterDigital Inc (IDCC)

[jtaylor]

If a Samsung 3G PLA occurred in the next few weeks, what would be the likely size of the impact on share price?

Such a 3G PLA should increase earnings per share by about $2. In the unlikely event that the price of the stock stayed the same, the PE would be about 8. Assuming a realistic multiple of about 22 (today's PE ratio), ultimately, this could mean share price appreciation of about 44. But maybe after such an event the PE ratio would go down to below 20 or possibly it would go up to 30 or more.

However, I don't have experience with such a situation, and I don't know what to expect in terms of how fast the PE ratio would reach its "correct" level or what this "correct" level would be.

I'd appreciate hearing any of your thoughts on this.