InterDigital Inc (IDCC)

[mickeybritt]

Numbers Please

Here is the situation. IDCC says they have approximately 70% of the manufactured phones for 2G under license agreements. Now here are the numbers, there are approximately 420 million handsets going to be manufactured or more, but using 425 lets figure.

30% of 425 is around 125 million to make it easier, now the average selling price should be around $150.00 now it a fact these 30% companies will be paying way above what Nokia, and Ericsson pays, so lets say they average 2% which is cheap, as QCOM gets as high as 7%. Now using 2% that is $3.00 a phone times the 125 million is $375 million, so if you want to get ultra conservative use 1% and you get $187.5 million.

Now I don't believe IDCC is going to license some of these companies for even 2% as I believe they will get 5% from some, and I think all will have to pay, so IDCC should using the worst case numbers you have 300 million phones at 1/2% or .75 cents a handset or 225 million plus the 187.5 million you get 412.5 million, and no money for infrastructure, you add in infrastructure money we are talking at least 450 million annually for 2G.

450 less 40% tax after the NOL is used up you get 270 million less 100 million for expenses and you have a 170 or $3.00 a share times a 25 P/E you get $75.00 and I don't think you can much more conservative than this, and IDCC has 2 years revenue coming this year and a 150 million tax losss carry forward so for 2003 the revenues will be really really good, and the stock has no where to go but up, and I don't think its going to be long reaching the $75.00 minimum price target.

Mickey