Why did IDCC put out the 8K
In my referenced post I was concerned about IDCC putting the 8K out prior to the ink drying on the contracts. Based on the way IDCC has been burned before, I came to the erroneous conclusion that it must be virtually a done deal. However last night I came up with a theory on why the 8K was issued. I think it might have been to comply with FD regulations. After teecee reported his conversation with Mr. Shay (thank you teecee and ELI for going and reporting back), it may be that the comments and big smiles of Mr. Shay may be considered a disclosure of negotiations with Nokia. Therefore IDCC released the 8K to report active negotiation progress to all investors. I just can't imagine IDCC issuing a statement without having a compelling reason. Note that the statement itself is very sparse and gives no indication of time or the work yet to be completed.
"Nokia Corporation and InterDigital are in settlement discussions and have made substantial progress towards resolution of all disputes between them."
My take is that Mr. Shay had reason to believe that negotiations were on track to be completed by April 11, which is why he was not worried about that date. Now Nokia has, in typical fashion, splashed cold water on IDCC. My hope that this is just another negotiating ploy and IDCC will not give an inch, and the deal gets done within a month. My fear is that the staff report came back more favorable for Nokia than had been anticipated so Nokia is pulling back from an agreement.
As always, it's wait and see time. I still am very confident in IDCCs future and I still think the stock is dirt cheap at these prices. I was hoping for a quick follow up of a license to create a short squeeze, so I bought some June 30 calls. Those may not work out (I still think they will), but buy and hold still looks like IDCC is incredibly skewed to the positive on the risk/reward scale.
One final thought. I made trades yesterday based on the 8K. I read what was said, drew my conclusions and invested my money. That was my choice. IDCC did not lie or mislead. Their statement is accurate. Nokia's statements do not dispute it at all - they do dispute the investors' actions as indicating that the market was more optimistic about a settlement than they are. If anyone traded based on that information, the results of the trade are yours, good or bad. Don't blame the company if you read more into it than it said. If there is no deal with Nokia for months I will be upset, but the trades I made will be my fault, no one elses. I won't be looking to IDCC to recoup my losses. If there is a deal with Nokia tomorrow, Sammy next week and Sony/Ericy the week after I will be thrilled and I will take credit for my investing choice and I will not send any of the profits to IDCC. I think that's the way this game is played.
``I'm a little less optimistic than the market implied yesterday,'' Simonson said in an interview in New York today. ``We always prefer to settle, but we will defend ourselves when the facts are with us.''
