InterDigital Inc (IDCC)

[jmspaesq]

Duke:I agree with Count. And please note: I don't believe that I said anywhere that I personally think IDCC will go for $700 a share.

I am pretty sure I said that I don't disagree with the revenue based valuation provided by NukeJohn recently that justified a $700 value.

However no doubt IDCC has difficulty licensing at fair much less FRAND rates for 2G and 3G/3.5G

I have said consistently that I cannot see a valuation for BUYOUT purposes that is less than $4.5B PLUS our cash. Which gets us to about $115 a share.

And I think that the company will go for a LOT more than that particularly in the current environment where we have highly motivated players with a LOT of cash and LOT to lose (Google, APPL, MSFT etc etc etc).

In that scenario the value of the IP defensively and strategically is enormous. And one can assume that those who buy it, if they have an interest in monetizing it offensively will do a MUCH better job at executing on that business plan than (with any and all due respect) the management team and 'first in class' (lol) licensing folks at IDCC have done.

For one thing, if you remember the history, 2G was nearly totally devalued by the MOT loss--it was a crippling loss in many ways, one that overhung this company for years and years to come--and may even haunt them now.

However, it is a brand new era in the IP and telecom worlds.

And the past is the past, the present is the present.

If Google makes a bid of $75 a share, I'll be okay--in my situation I will still make a large profit on my original shares, the shares I bought the morning after the Nortel auction for my retirement account and the company options that I hold with a very low strike price.

I will have lost a relatively small amount of money on some options.

I think if Google makes a bid like that then APPL will make a realistic bid or others will.

And if we got a bid like that I think we oughta just take our IP and auction it in blocks of 6000 and see what we'll get and reject such a bid.

And yeah I do think Wall Street is stupid when it comes to a LOT of things, has often missed the boat on a lot of things, and is often irrational and inefficient. If the game wasn't rigged in their favor in lots of ways, a lot of them would be out of business. And if you're on Wall Street you can always count on the Government coming to bail you out. If Wall Street was so darned smart, how'd we get to the brink of economic collapse a couple of years ago? A bunch of bankers made loans to people who couldn't possibly pay them back and then Wall Street made big bets ON those loans? I'm not a banker but I know the whole thing wasn't a good idea. And a lot of those bets were made at a time when it was pretty obvious even to a non Wall Streeter that we were in a real estate bubble (and it isn't the first--remember 1989?)

If Wall Street was so damned smart then where were all the brilliant Wall Street analsysts warning that the Net/tech/telecom boom would become a bust? Again--an obvious bubble they kept betting wouldn't burst.

Wall Street IS smart enough to profit on the way up and down though, profits are made by them on fees either way.

But if Wall Street was so damned smart I ask you, why didn't they move 2/3 of their pension money into IDCC the morning after the Nortel auction? Because at that moment it was obvious that IDCC had a significantly higher value than it was being given--whether it is $115 a share, $300 a share or whatever--even at $75 a share you could have bought in the low 40s that day and I sure did--and I can't see that wasn't a good move--other than I should have pulled the trigger on the other 1/3.

I think Wall Street barely understands the importance of IP as an asset class, they are just starting to 'get it' and when it comes to IDCC it has always been followed by few, lightly covered, not a lot of analysis out there.

And if you look at the analysis out there a LOT of it contains a LOT of misinformation, blatant errors and not a lot of insight. So the one guy who really follows us from M partners and has been right an awful lot, says $118-168 and uses a LOT of very CONSERVATIVE assumptions to get there. Change the assumptions a bit here or there and you get to multiples of that easily. Put it all in the context of the smartphone wars, the motivations of the big players with big cash caches, and a lot to lose and the answer is that we will see.

I guess there are lots of ways for you to hedge your positions if you are that worried. Will $75 a share leave you poor is the first question? If so, take some money off the table now. Or sell shares and leverage back in with options with a small % of your profits.

I'm personally not worried. Nor am I trying to pump this stock or start a drumbeat. My posts are intended only to share my thoughts and some of my own strategies.

PS From what I can tell Dmiller is a trader NOT an investor so his perspectives may be different. And then there are always optiimists and pessimists.

But as many have said many times it would be a mistake to make your own investment decisions based upon what is posted on an internet stock message board, even this one.