Replies to post #28672 on InterDigital Inc (IDCC)

[loophole73]

DannyD

Wow, now you have really got me laughing. I guess I have been cold called by young upstart brokers more than a thousand times over the years and not once was the pitch "there is this company with great management I want you to look at".

If people ran from an investment because they were a little skeptical of management, there would be no market. Every successful bar owner will tell you that a little skimming is expected by the managers and bartenders. It is not utopia. If you like a business model that is capable of great margins, then you have to take your shot. This stock has been a breath away from from huge returns or just another bust for years. It now has 3 1/2 years to see if it will make the big time or not. It has been a traders dream for years. If W-CDMA is a success, then it is a big payday. If not, there will be plenty of chances to make a good return along the way.

Right now I would trade every non engineer management guy and our directors for a sage old licensing man that can call the heads of licensing at the major manufacturers by their first names asking "what the heck is the problem"

MO
loop.

[fordiamonds]

Danny Detail,

If memory serves, your confidence in management prior to the CC seemed to have been shaken.

From a previous post:

Danny Detail: I'm having difficulty keeping up with the board these days, so I apologize in advance if the following question has already been covered (if it has please post the link); but it appeared that depending on the outcome of 1st Q and CC, you were ready to sell all of your holdings. Apparently you received information you needed to renew your faith in management. Can you specifically share what it was (in the CC) thas has led to your renewed faith? TIA.

Mostly lurk cause currently being in the pharma industry, don't have much expertise to offer here. But, I'm definitely overweighted in IDCC so I would appreciate your comments. Again TIA.

http://www.investorshub.com/boards/read_msg.asp?message_id=1017080

[blueskywaves]

I know some quants that do not try to measure subjective factors like management in the interest of keeping the numbers "pure," but I'm still not persuaded that this can be done effectively with technology companies because of the obsolescence factor.

For example, the board of directors is responsible for authorizing option grants and other compensation issues through the Compensation Committee. The record clearly shows that IDCC's board made a conscious decision to increase R&D dramatically after the devastating 1995 Motorola loss.

IDCC spent a mere $24M in R&D in the 3 years (1992-1995) after the 1992 merger of its TDMA patent portfolio with SCS's CDMA patent portfolio. It spent $63M in R&D for the 3 year period from 1996 to 1998 (before the Nokia deal) and $138M in R&D from 1999 to 2002 (after the Nokia deal and before the Ericsson settlement). Note the progressive increase in R&D spening after each level of accomplishment.

The direct results of more than $200M in R&D spending since 1995 have been IDCC's increased influence in the 3G standards committees and the dramatic increase in CDMA patent production -- built on the foundation of the Schilling CDMA patents --, which both increase the likelihood that IDCC will be able to monetize its CDMA portfolio successfully. I doubt that a quatitative approach would have captured all those tangible and intangible benefits.

I don't think anyone can credit those developments entirely to IDCC's engineers and scientists because very smart people tend to do very stupid things to each other without very smart management to keep these inventive types focused on the business plan. If one accepts that premise then one can understand the very high degree of difficulty of the recruitment process after the Motorola loss.

I also don't think anyone can be constructive about IDCC's business plan without understanding how this management team views and uses R&D since R&D will clearly play the crucial role as IDCC completes its turnaround and starts to grow.