THE MARKET + IDCC
I will attempt to integrate the history of the market
with the history of IDCC as IMHO it has some relevance at this moment.
THE MARKET ...NASDAQ...A little pass and review
We have just past through the best market move in 4 years.The nasdaqs small cap stocks which are consdered the most speculative took the lead as is historically the case. It was a nice ride,but don't expect the small caps to continue to be the leaders.
Smart money was 'moving in ' on the small caps before the big buying spree from Dec 02 [ naz low 1,327.19] to March 03 [ naz high1,425.73. ] .From March 03 to December 03 naz broke 2000. With the one year mark behind ,capitol gains being more palatable... smart money began taking profits and began rotating out of small caps into big caps.
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IDCC
As for IDCC ... we followed the NASDAQ rise encountering slips along the way that were directly related to unmet expectations. In a bear market we would have been decimated beyond recognition. But fortunately the wind was to our backs.
The ericy settlement was to be the watershed event that would propel us to the next level. We went from a low of 11.78 in January of 03 to a high of 24.14 in March 03 after the ERICY settlement. Many were very disappointed in the financial returns of the settlement and expected at the very least a 3g agreement. Fortunately the economy was looking better and the bears were at last beginning to hibernate. This fact compounded by the fact that Management pointed out that this watershed event triggered the Nokia agreement helped to hold us up and move us forward albeit not to the 50 or 100 that many thought might be the case post ericy. Management also alluded to the fact that this should help remove barriers for signing future licensees. All in all ... it seemed we were moving ahead without the albatross of litigation hanging over our heads and the potential for new solid licensees
From March of 03 we went from a low of 12.90 [pre settlement] to a high of 28.85 in June..... We were finally on our way and the market was in our favor.
July 03 ...NASDAQ has moved from a low of 1,303.64 in January to a high of 1,776.10 in July.
Nokia initiates arbitration...few are prepared for this event ... the stock drifts down over several painful weeks to a low of 13.90 in August when it bottoms out. The Market was performing well at this time....small caps are riding high. It is easy to see how we may have made 50 without the elusive arbitration and indemnification issues hanging around our necks like the ugly albatross of the ericy litigation.
The NASDAQ went from a low of 1,640.88 in August 03 to a high of 2,153.83 in less then 6 months. IDCC began catching the wind just prior to 3 Qtr. earnings ... expectations were looking good....we were slowly recovering from the Nokia mess. We went from a low of 15 in October to a high of 21.00 in November after earnings...
At the time ...the CC was considered to be a success. Management had alluded to several new significant licensees by year end and arbitration was on course.
Market conditions remained strong.
A poorly executed article filled with mistakes in the December Forbes magazine pushed us back below 20 to a low of 18.17. We impressively recovered from this shoddy piece of national journalism. The anticipation of new licenses along with the market momentum helped us regain our post Nokia recovery hitting a monthly high in December of 21.13.
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The NASDAQ has broken through the psychological 2000 barrier setting us up for a strong January and a possible near term top.
IDCC runs up going into March 04 to its highs of the year to 27.87 pre earnings. The NASDAQ has been sliding ever so slightly since it hit its high in January of 2,153.83 to its closing low of 1,896.91 in March.
The stage is set for earnings...the wind is in our face...[market conditions weak]
rotation now away from small cap stocks....
EARNINGS RESULTS
Revenues in the last quarter declined, expenses increased, analyst expectations were whacked. Forward looking statements included continued higher expenses, uncertainty in licensing, and Nokia arbitration delayed till next year. Merritt was conspicuously absent[ok] and Goldberg smoothed over the licensing predicament with generalized comments of being in the 'economic phase' of negotiations with perspective licensees...
IN A NUT SHELL....
Heres our problem....Our stock price is in a decline because...Momentum is not on our side at this moment, news is not great, expectations have been lowered, and uncertainty levels have been elevated.
IMHO market conditions will continue to exacerbate this situation more to the downside then the upside as evidenced by our activity today..... We barley popped over the 16.50 level [up . 45 ] on a day that the NASDAQ was up 57 points. Where do you think we would be if it had dropped 57 points?
Unfortunately I believe it may not be till after the elections that NASDAQ conditions will clearly improve. We will have technical relief rallys....as we did today...but at the moment they do not seem to be enough to pull us out of the bucket. The lack of response to the Sierra Wireless signing was a possible indication of what to expect from investors until they :"SEE THE MONEY"
were back to.... 'SHOW ME THE MONEY"
We will need some strong positive news IMHO to reverse this current trend.
As always I appreciate your thoughts and comments....
I would espcially appreciate them now ...as I have re-read this over several times and I am feeling like I did in
August of last year....
I guess...and this to shall pass. ALLEY
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