InterDigital Inc (IDCC)

[blueskywaves]

What the brokerage houses did was NOT illegal at the time they did it in the sense that you are critical of them (and technically is not illegal even now).

Huh? You mean they just paid $1.4B to settle actions that were not illegal? Of course not. They settled because regulators were threatening to use an entire arsenal of existing laws about fraud to go after them. Consider that after this settlement, Wall Street now has to deal with private lawsuits that could involve settlements up to $14B. All that for actions that are not legal? Don't be ridiculous.

Another way to look at the current option accounting rule is to look at it as a type of subsidy, a subsidy that is being phased out. Is it really bad for IDCC to receive this type of subsidy before it is phased out? Keep in mind that IDCC has used option exercises to finance its cash burn after the 1995 Motorola debacle. In fact, IDCC wouldn't have exited 2002 with $88M in cash/investments if not for the fact that they were able to use the cash infusion from option exercises to prop up cash flow. Do you really think IDCC would have gotten the deals it got after the Motorola debacle if it had a weaker balance sheet?

Reasonable people can disagree about the level of executive compensation, but the fact of the matter is that there aren't that many wireless companies making a living out of IP royalties so what's the proper basis for comparison?