To ONCE and all...
I avoid responding to posts of this nature as I greatly value my short time on this earth and believe it is wrong to waist it. If there are others who find value in ONCE'S post and believe in his perspective. I would appreciate if you would identify yourself. It would be interesting to see with a forum that has well over a thousand readers how many identify with his way of thinking.
I do believe that different perspectives are important....but it is important that ideas are presented with some factual basis....otherwise we are just blowing smoke in the wind. I also realize that I portray confidence in our ability to prevail. This is my personal perspective. My responses below will identify why I have this conviction.
MY RESPONSE ............
ONCE
"Now we find that the contract terms are sufficiently vague that IDCC and Nokia management both disagree on just what their agreement means. "
INCORRECT
IDCC is very clear what the contract calls for.....
NOKIA I believe is also clear ... they just don't like how the ericy settlement effected their royalty outcome. So...lets go fishing....lets pressure the company....maybe they will buckle...
ONCE
This is evidenced by the fact that they need to arbitrate.
NEED TO? OR
WANT TO....would be more appropriate.
ONCE
"I would tend to believe Nokia."
WHY?
Do you believe they owe idcc for royalties ... ?
They have not disavowed the existence of contract or an obligation.
ONCE
"Anything can happen in arbitration,
CORRECT ... yes law firms reputations are on the line....a contract was signed with very clear triggering mechanisms ... arbitration is a process
used to see that justice prevails. IDCC's future was written in to that contract to insure a motorala was not repeated.
ONCE
why do you think it's no big deal?"
CORRECT.... IT IS A BIG DEAL ... and will be a big deal for IDCC.
ONCE
"Plenty of boosters here shrug it off saying "Nokia just wants a better rate".
INCORRECT: I do not shrug this off....Nokia did this to Q as well...now it's our turn.
IMPORTANT TO NOTE: In their recent announcement regarding future guidance ...NOKIA lowered bottom line expectations. They are scrambling to squeeze out every penny...wherever they can
They did not anticipate the ericy outcome...and yes they will squeeze hard to get a better rate....
ONCE
" don't think that excuse holds water".
CONTRADICTION: On the one hand you disagree with investors who are saying that "Nokia just wants a better rate." On the other hand you say "Of course they want a better rate, no rate is better than a low rate and Nokia will get the lowest rate they can, if not zero. "
Remember they signed a contract.....they agree that monies are owed...
I don't think they signed a contract with a 0% royalty rate.
THE NOKIA STRATEGY---------------------IMHO
The NOKIA strategy has a 4 pronged approach designed to create uncetainty,confusion,delay and ultimate weakness with the desired outcome of a more favorable rate.
THE NOKIA STRATEGY
1.DENY...Triggering event ...
2. DELAY ... time works in their favor whatever the outcome
[] delay = delayed revenues
[] stall arbitration ... method
{}delay method: SHOW ME THE PAPERS
The purpose of the papers is to search for a hook to negotiate a
better rate.
3. DEFAME MANAGEMENT This feeds directly into the worst fears of the investment community...it plays directly off the highlighted scandals of recent months...If Goldberg were not a lawyer this might have some credibility at the surface only....but as he is very clear that even the perception of impropriety in light of recent public declarations could to serve to destroy him and others ...his selling is a further indication that their is severe weakness and desperation in this claim
4. OVERALL CREATE UNCERTAINTY ...
Uncertainty erodes the confidence of the investing public momentarily.
It can serve well to put pressure on management to negotiate if the terms are not clear. If they are clear. management must state that to the public.
"We believe that we have fully satisfied our contractual obligations and remain confident in our position, including our prior projections as to the amount of royalties owed and to be paid. William J. Merritt, president of the InterDigital subsidiary.
The uncertainty of the moment will no doubt takes it's toll on the performance of the stock....which again only serves to give the upper hand at the moment to NOKIA.
NOKIAS STRATEGY appears to be well planned ... Well, executed ... and at the moment has set up the environment for a better deal. The only problem with their strategy is it appears IDCC having been down this road before...and knowing the big Q has as well ... will stand on the letter of the law. They are aware that in the short run they will have to endure the pain to get the gain.
ONCE
"Management has lost more credibility here by leading the boosters to believe Nokia was in the bag. "
AGREE AND DISAGREE
DISAGREE.... In that 'LEADING boosters to believe Nokia was in the bag. "
Implies that they knew it wasn't in the bag and mislead investors to believe it was.....THAT'S REAL RISKY BUSINESS...especially in light of insider trading activity. In fact Nokia used that very fact to initiate arbitration [weak basis to initiate a contractual disagreement] It also significantly inconsistent with IDCC'S past profile of divulging little or no information regarding their contracts and negotiations.
AGREE. Credibility is determined by outcome. In light of their public statements in recent months one might think management's guidance was deceptive. They stated what they knew Nokias obligations to be contractually. Management's biggest mistake was in not following REAGAN'S old addage....TRUST BUT VERIFY They were not wrong in trusting that NOKIA would honor their obligation ... but they should have verified it with them first. This seemingly small mistake gave NOKIA a vehicle to develop a strategy that would weaken IDCC in the short run and hopefully create a negotiating environment for them as well.
ONCE
"My experience said otherwise. How can anyone trust management ever again after so many disappointments? "
This is not a new mantra for you. Management has prevailed in the worst wireless telecommunications environment in history. They are debt free and overcapitalized. They have struggled through the worst of times using prudent fiscal discipline. They are not as glitzy as I would like...but in this environment you need tough soldiers
As to your experience....well ....my experience with you has been consistent. You appear at a moments of weakness, with your opinions and innuendoes .... And you leave when matters are resolved and the stock performance strengthens.....
Some of Your innuendo IN THIS POST ONLY:
ONCE
[] " we find that the contract terms are sufficiently vague"
I would appreciate it if you would share your experience with us regarding your knowledge of their 'contract terms' with NOKIA so we can all go on vacation.
ONCE
[]"Problem is the disparity between what ammunition people think they
have and what they actually have..."
Again.... What do they have.....definitivley...PLEASE?
ONCE
[]Problem is the disparity between what ammunition people
think they have and what they actually have. This
explains IDCC's "poor" PERFORMANCE all these years.
Their performance as a stock and as a company has been volatile. A reflection of a challenged business sector. It's performance was badly handicapped after the poor Motorola action. It then established a new vision looking into the future ...3 g ...well before it's time....it's performance time is in front of us....that's what all the lean years were about.
OHHH....AND YES I AGREE with what you said
ONCE
"Actually, they have done slightly better than I
anticipated [revenue wise)."
Especially in light of the fact that their focus was
primarily on 3 g and beyond.
ONCE
[]''recent revenue may not continue. ''
ONCE
[] 'It seems management has a preference for license
agreements thatproduce money right away but then fall
apart when it comes to long-term revenue stream. This is
consistent with my characterization of
IDCC as a nuisance company ''
ONCE
[]''A company that has filed for patents surrounding
innovations. They use the ambiguity of these patents
to try to leverage nuisance settlements out of
manufacturers...''
Gee wonder why they were invited to participate in setting standards ....must be because they were respected for their ability to execute "nuisance settlements"
ONCE
[]''Currently, they are trying to lever the weak Ericsson
agreement into royalties that Nokia is calling them
on. This is pattern and never ends up with solid long-
term revenues, just enough to boost the share price
when it's time for insiders to dump their free shares
and to depress the price when it's time for more
options to be issued.''
That's original....sounds vaguely familiar....from Nokias desire to discredit management.
In short management's decision to trust without verifying was a short term strategic mistake. It is unfortunate that we live in a world where trust and integrity are so vulnerable.
I am always disheartened when someone feels the need to distort the reality of a moment. None of us KNOW any more than the other....we are all disadvantaged that way ... some will use that uncertainty successfully to create an atmosphere of fear and doubt....that also is a reality that I find unfortunate in our human condition. I do clearly see the disadvantages that the uncertainty of this moment presents. I am not the judge or the jury...I am not privy to the actual terms of the NOKIA/IDCC licensing contract...so I have made my decisions based on management's clear and unambiguous understanding of NOKIAS contractual obligation to IDCC. I trust that the arbiters will be fair ... and idcc will prevail. I was significantly less certain as to the outcome of the ericy litigation as management was never as clear or as unequivocal as they have been concerning the understood outcome of the NOKIA licensing AGREEMENT.
BEST TO ALL AS ALWAYS MOST COMMENTS AND THOUGHTS ARE APPRECIATED .....ALLEY
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