InterDigital Inc (IDCC)

[jai]

The bottom stock price for the year is $15.81.

22-Mar-04 16.70 16.80 15.81 15.95 1,205,400 15.95

On a valuation basis I feel it is at or near bottom value.

I think it would take a big event for IDCC to push down past $15.00. (Losing Nokia Arb/Losing LU suit) The market cap is now at $962 million and they have another $100 million in cash and no debt.

So you have a net of $860 million for 1000 patents and $100 million in profitable revenue stream. Whenever you have an equity with these assets priced low it can be a target for a buyout.

Plus you have $0 dollars (IMO) factored in from Nokia and Samsung (a potential $500 million dollar revenue stream from 2002 to 2006).

I believe Nokia and Samsung is now an arbitrage situation. The closer we get to Jan. the more the price of IDCC's stock should rise.

The likelyhood of this quarters revenues to be below last quarter is very slim.

We have already had Sony/Ericsson report a nice increase from last quarter.

RIMM had a huge quarter with a 37% increase from previous quarter.

"Revenue for the fourth quarter of fiscal 2004 was $210.6 million, up 37% from $153.9 million in the previous quarter and up 141% from $87.5 million in the same quarter of last year."

HTC revenue will start this quarter.

"In fourth quarter 2003, we entered into a non-exclusive, worldwide, convenience-based, royalty-bearing patent license agreement with High Tech Computer Corp. (HTC) covering the sale of terminal units and infrastructure compliant with 2G and 2.5G IS-136/GSM/GPRS/EDGE and 3G WCDMA/cdma2000/TD-SCDMA
standards. Under this agreement, we will receive a royalty on each licensed product sold by HTC worldwide. HTC is obligated to make a royalty prepayment in first quarter 2004 and, once that prepayment is exhausted, will be obligated to pay additional royalties on sales of licensed products through the life of the licensed patents. We recognize the revenue associated with this agreement as sales of licensed products are reported. "

NEC reports Wednsday the 28th but we expect more revenue this quarter because of software problems in the 4th quarter that were repaired.

I'm expecting a very good quarter and played some June options because of this. I'm hoping we get back to trading in the $19 to $20 range.