Replies to post #28379 on InterDigital Inc (IDCC)

[revlis]

rmarchma,

The technology is useless unless it is exploited and it is management job to exploit it. Unless you trust management to exploit it, the technology is useless.



Jerry

[Danny Detail]

rmarchma .. First a sell decision should not always be based on one factor, such as one’s judgment of management’s abilities and capabilities.

That is such an obvious and fundamental principle of sound investing I'm curious as to why you felt the need to state it in your post.

Therefore, my decision to sell will be based not upon my assessment of management, but upon my assessment of the underlying technology.

Didn't you just contradict yourself here? You're now saying that your sell decision will be based upon an assessment of a single factor, "the underlying technology."

Up until your post, I have not known of a single individual or institutional investor that was willing to put such a low weight on their assessment of top management in deciding when to sell. After all, the "underlying technology" does not have a mandate to build shareholder value, management does. I don't agree with a lot of what is said here about IDCC management, but I sure do think it is right and proper for each and every one of us to spend a lot of time trying to assess whether top management is capable of building a highly successful company or not.

It is hard for me to imagine an instance where the clear majority of the shareholders gives less than a 50% weight to their assessment of management in their decision to sell. If most of IDCC shareholders, particularly the institutional ones, are giving substantial weight to their assessment of management in their DD and you are not it seems to me that you are playing pretty high stakes investing poker. In the instance where most of them conclude that management is not going to be able to adequately build shareholder value relative to an alternative investment don't you run the risk of being left holding the bag when they sell out?

Just to add to your risk here, you correctly stated in an earlier post that institutions don't stick around long when they've decided that they can do better in some other stock. The good news on the increasing institutional ownership is that it is driving the stock price up. The bad news is if they turn sour on IDCC pretty much simultaneously (a frequent occurrence with institutions) they will trample most of us here while we try to find the exit door. Call me crazy but I sure would like to have my management assessment weighting pretty much aligned with theirs so I can increase my odds of selling before they do.