Corp_Buyer - my response
Tell me, what is your threshold limit for dilution from ISO?
When InterDig exceeds other small tech companies, I might start to be concerned. Otherwise, I have absolutely no problem with adding 5,000,000 new options.
In a post yesterday (21624), you showed an assumption that InterDig grew to a $10B market cap. Let me use that same assumption and show the cost of the additional 5,000,000 options.
At a $10B market cap, InterDig would be worth about $166 per share assuming 60M shares outstanding. If the 5,000,000 options were exercised, InterDig would be selling for $153 per share (assuming 65M shares out).
I guarantee you, I can handle that dilution - especially if the 5,000,000 share options allowed InterDig to hire or incent the people who got us to the $10B market cap. I mean, how does Interdig get to a 10B market cap? -- by having very talented and highly incented people doing their job. The general feeling around here is that follow-on patents are easy to dream up and licensing is easy -- nothing could be farther from the truth -- InterDig faces huge challenges requiring a highly focused and highly talented team -- options can help.
(My calculation doesn't even allow for the cash provided at exercise - which could be significant if the options are granted after Nokia/Samsung or after 3G licenses.)
"As soon as I find.. management is.. self-serving, I will sell" - then you should sell now.
I have no evidence that management is self-serving. I realize that most here think management is overpaid - I disagree. Most here think management has too many options - I disagree again. (BTW, should management shower themselves with most of these 5,000,000 options - I would be very disappointed
and probably sell my shares.)
Bottom line: I believe that it is in my best interest to provide management with whatever they think they need to be successful.
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