Replies to post #63669 on InterDigital Inc (IDCC)

[rmarchma]

Corp_Buyer re D&O liability insurance

We still do not know the total yearly cost for this insurance. All we know is that the INCREASE in this D&O insurance expense was $1.5m for 2003. Put in perspective another way, just the annual increase in this one expense is more than the analysts' projected annual royalties from the new Sierra Wireless license. One of my questions for the last CC that I sent IDCC as follows:

15. IDCC has guided to a significant increase in operating expenses of 5% to 10% for the fourth quarter over the third quarter. Is the majority of this increase coming from director and officer liability insurance? What is the total quarterly or annualized cost for this insurance, and its justification? How much of IDCC’s quarterly or annualized operating expense is associated with the Tantivy asset purchase?

[Immelman]

Corp I think the personal indemnification for directors is a good thing. It allows them to say good things about IDCCs prospects without having to worry as much about getting sued if things go sour. When they make good projections is when the stock price goes up. Without this personal protection the directors might not have the balls to make good projections.

What I want to know is why is it so damn expensive?

MWoods

[jai]

Corp_buyer,

While I agree with most your other points I am in strong disagreement on the cost containment issue.

I want this company to spend money.

The $100 mil does nothing for us in the bank. Increasing sales, marketing and R&D are ways in which a company grows. They are not in a cash burn situation so I don't want them not making sales trips or doing tech shows because they are worrying about EPS numbers now.

Let them spend whatever they need within reason so that more HTC's and Sierra Wireless sign. In a year no one will care about these spending percentages if Nokia is settled and Panasonic is paying and the LU suit is won and LG comes to the table.

Penny wise and pound foolish is the first thing that comes to into my head.

I don't think it is fair of us to demand that they sign new clients without letting the company use the financial resources they need to get the job done.