It is silly, in my opinion, to believe that our NEW analyst coverage this week is predicated on any "knowledge" on their part that the Nokia/Samsung rate resolution is either (1)already achieved or (2) will not require arbitration at some time. Those are purely speculative assumptions without any basis in known fact. It makes perfect sense to me that they would BEGIN their public coverage of IDCC at the moment of its most dramatic recent share price decline, as that provides an opportunity to make their valuation call from as strategically safe and conservative a place in the risk curve as they are likely to have going forward. Not only that, their own valuations and forward projections are on the conservative side without really including any significant estimate of Nokia/Samsung income in the SHORT TERM. They all assume that income will come in the last quarter. Moreover, I do not think these analysts have any doubt that Nokia and Samsung will be PAYING customers of IDCC. It is ONLY the rate and timing of payment that requires resolution, and I am sure that this is THE MOST SIGNIFICANT FACT in their minds. So regardless of WHAT that rate turns out to be and WHEN it is paid, their current valuation estimates of IDCC will look prescient and may or may not have to be revised upwards depending on the rate resolution and determination we are all waiting for. Even if the income from Nokia and Samsung is HALF of what has been projected by management, the analysts' current valuation calls will not look out of line. They really have NOTHING to lose, even their credibility will remain intact. Based on this analysis, it is my view that even if the Nokia/Samsung rate resolution has to go to arbitration (which still seems to me UNLIKELY), it will not result in a significant share price drop from current levels, and even if there were to be a sharp drop it would soon recover, and the analyst valuations and current projections of share price targets would still not seem unreasonable or unattainable, even if the timing would possibly be delayed for reaching them. These analysts have not gone way out on a limb, in my opinion. They describe IDCC as a higher risk stock and have clearly "lowballed" their target price. They know NOTHING more than we do regarding the timing of the rate resolution or whether it will or will not require arbitration to determine a rate. THEY DO KNOW THAT NOKIA AND SAMSUNG WILL BE PAYING SOMETHING as required by their licenses.
Therefore, in my opinion, even if arbitration is required, these analysts will not have to revise downwards their current share price targets for IDCC. Their credibility will not be impaired in any way that I can see.
