Conjecture on Patent Portfolio, Share Price Rationale, and U.S Analysts Coverage
1) A conjecture on Patent Portfolio...
WiLAN states that they have 40 "families" of patents within their existing portfolio, and it appears that the highly successful attempted and/or finalized enforcement has only involved 7-8 of those families'. The vast majority of the remaining families (32-33 of them) have yet to be asserted.
The conference call and analysts questions seemed to only be concerned with current litigations and new acquisitions and not on future litigations coming out of the vast "pre-2011 portfolio".
It could be argued that some of the low-hanging fruit may have already been picked, but even without the a) new Motorola patents, b) the new acquisitions,c) Gladious, d) pending acquisitions of other firms... there is still extraordinary room for growth from those untapped "families" waiting to be enforced.
2) A conjecture on Share Price Rationale...
The "not too distant future" acquisition plan has been clearly stated by Jim Skippen. In the conference call, he reiterated that WiLAN was seriously looking at "several" acquisitions. Even if just one of those "deals" is already in "advanced" mode, then the share/cash ratio may well have been "already set".
A runnaway WiLAN share price makes such a deal less palatable to the company being acquired, so it would not be unusual to see WiLAN's shares trade in a narrow range (near the deal price prior to the announcement). Therefore, if a deal is looming, it would price WiLAN at just above the "Bought Deal"price. Bottom line, WiLAN's "run" to 8.00+ may have been unexpected, and therefore the "push back down".
3) A conjecture on U.S. Analysts' Coverage...
Since WiLAN's arrival onto Nasdaq was not via an IPO or a Secondary, existing volume levels may not be conducive for large institutional investors to buy in without creating upward price volatility. However, WILN's existing share price may be so undervalued that U.S analysts coverage may begin sooner rather than later.
Obviously, analysts want to initiate coverage of a new stock at a low valuation with a "Buy" rating so that when the stock heads north, anaysts will get credit from their own firm and ultimately from those institutional investors to whom they recommend the stock.
AI
