InterDigital Inc (IDCC)

[jai]

The Good, the Bad and the Ugly II

The Good.

The new analyst report was inspiring. The most detailed and comprehensive report that I've read on IDCC. The picture that he paints is basically that IDCC will florish with 3G. He makes it sound very much like no one can legally get around paying IDCC for 3G.

Fridays release is very positive. Smart move to make before next CC. Reducing expenditures and making declaring 2004 cash flow positive can only help the share price. This takes care of two big negatives during the last CC. The ruffling through papers that Fagan had to do when an analyst asked him if IDCC would be cash flow positive in 2004. Also it helps calm the concerns of out of control costs from last CC when the estimates were missed.


The Bad.

The share price. The market is not tech friendly right now. Nasdaq is back and forth. Wireless sector being hit, Nokia took a bath (could not happened to a better company). Without a new license that contains substantial revenue the only way IDCC rises near term is via a big NASDAQ rally. Even then we may not rise. We won't start getting Nokia money priced in until fall.
Bottomline we need a catalyst.

The Ugly.

IMO, this new compensation plan is very ugly. Just when the company was building back the shareholder and investment community trust from last years post ericsson selling and the 5 million failed option plan we get this. I very well may be overreacting and beleive we need to hear what the analysts and the institutions have to say about it.

The numbers do not make sense to me with the share price trading at these levels. With a projected $100 million dollar revenue year spending 7 Million of it for the top 100 management personel does not make sense. From my experiance when these plans are implemented the majority of the compensation goes to the top 5, CEO, CFO, COO, CTO and COB. I hope I am wrong.