InterDigital Inc (IDCC)

[blueskywaves]

I don't see float as an issue, dilution is.

I think that at this stage of its development, float is more of an issue for IDCC than dilution.

Growth companies typically dilute their stock to finance their growth plans so if a company can deliver reasonable growth then reasonable dilution will normally be discounted by the street. As I've mentioned before, the 2003 Ericsson settlement marked the end of IDCC's turn-around stage and the start of its growth stage so it's fairly early, but I think it has a very credible shot at joining, first, the 10/10 club (10%+ sales growth/10%+ EPS growth) and then the 20/20 club (20%+ sales growth/20% EPS growth) during the next 4 years.

That's why I cited QCOM, ARMHY and RMBS so people here can stop moping about and actually have a useful real-world perspective of how IDCC compares to other companies with licensing models and how these companies, at different stages of development, have diluted their stock over the years to finance their growth as measured by those revenue milestones.

Float becomes a real issue for institutions that want to establish larger positions but do not want to make too many waves scaling in and out of the stock. Sure, IDCC can actually play around with its equity by, say, reducing, the supply and in effect creating a disorderly bidding war for the limited supply, but I think that will actually have the opposite effect of shrinking the universe of potential institutional investors rather than expanding it. Like I said, take a look around at those financial databases to see for yourself.

By the way, taking everything into consideration, including the impact of option expensing on most of Corporate America's financial statements, do you realize how very few small companies actually have a legit chance of joining the 10/10 and 20/20 clubs in the next 4 years?