InterDigital Inc (IDCC)

[loophole73]

longball

I have followed this stock for 20 years. IMO, Nok has really placed IDCC in a tough spot. Prior to the patent challenge for 3g, I believed that a significant win at arbitration for 2g would send the stock on a dead run to 100. I based this on the street finally buying into the IDCC story with a nice ending for the 2g chapter and a dead cinch 3g future. Nok has managed to rattle old skeletons which I believe will keep our present analysts at bay even with a good arbitration result. I now believe that absent a settlement with Nok for 2 & 3g, a 3g license with E/SNE is an essential ingredient for the 100 pie. I also believe that reality dictates that E/SNE will now allow Nok to carry the expense in an attempt to derail the 3g licensing via litigation just as Nok allowed Ericy to do the same for 2g.

I do not believe that any investors had any idea that 3g would end up in court. After all, IDCC sat on the committees that set the standards for 3g. I do not believe that Nok is dumb or reckless enough to walk into a litigation arena with serious exposure for a major financial hit via cross claims by IDCC. This recent filing is very perplexing and should be taken seriously unless E/SNE executes a 3g license soon. If they do not, I do not believe the share price will move past 30 even with a good 2g result at arbitration. The street will look forward to earnings and the suit by Nok makes years after 2006 murky. IDCC has other licensees that will need to renew and Nok may have effectively clouded this issue.

It could be that Nok is looking to create another "mandate" atmosphere at IDCC in an effort to achieve a firesale rate. If IDCC hits them with cross claims, they are locked into litigation regardless if they withdraw their original patent claims or not. However, I believe they were well aware of these possibilities at the time they filed the patent challenge action.

MO
loop