AMS, you leave me shaking my head
I’ll discuss two of your “reasoned arguments”, one that is wrong and the other that is absurd.
A takeover would be good for the stock as it would ensure the current management failures are terminated.
If IDCC is taken over, IDCC will be a small part of a very big company. IDCC’s success will be a little piece of the overall results of the company. The share price would be driven by the rest of the company’s results – IDCC’s performance might add 5%-10% to the overall results. IDCC’s potential return as an independent entity is far greater than it will be as part of a conglomerate. There is also more risk, which is what creates the opportunity for those able to handle risk to get exceptional returns. If you think management is truly as incompetent and dishonest as you say, how can you invest in the company when people like that have great power over your investment? I don’t think they are dishonest. I don’t think they are geniuses or idiots. I do believe the company is positioned to make a lot of money from 3G. Any competent jockey riding Secretariat could win a race, some by more then others. I’d rather have an average jockey and bet to win rather than put a great jockey up but have it run as part of an entry and bet on it to place. The place money is just about a lock, but not much of a payoff. The win ticket could get you 5-1 or better.
It may be somewhat of a shock, but unrealized gains, count for nothing. A profit or loss only happens when the shares are disposed. Therefore you have made nothing.
Unless your talking about taxes, you are flat out wrong. How can an accountant make such a stupid statement? Why do you get so upset when the price of IDCC goes down? If you don’t sell, you have no loss according to you, so it doesn’t matter, right, Einstein?
Stocks are liquid and the value is known. The fact that you do not convert it into cash does not change the value of your investment or the gain or loss you’ve realized. Let me give you a simple example that proves the point.
Two people hold the same stock. One never trades, the other trades once each month, selling and buying back the stock back within minutes. If the stock was up, you would say that the trader had gains while the holder did not. Yet in fact they are in the same position (the trader would likely be slightly worse off, due to commissions and the bid ask difference).
You can argue tax law, conservative accounting rules that prohibit booking unrealized gains or any other fanciful theory you want, but the undeniable economic truth is that unrecognized gains and losses are real. If that doesn’t convince you, let me ask one last question. Have you ever owned stock on margin and had the price fall? Brokerage houses seem to think they are quite real.
