Replies to post #74418 on InterDigital Inc (IDCC)

[jai]

I would not be worried about Merritt's sale. Any good financial advisor would tell him to diversify. It is a smart move not to keep a large majority of ones net worth in a single stock. Too bad I'm not that smart.LOL.

[rmarchma]

Jimlur Merritt's sale was Not from his 401k IDCC holdings

Merritt's sale of 20,000 IDCC shares were obtained from exercising stock options, which expired in 2005, 2009, and 2010. Ater the sale, Merritt still owned 43,260 actual shares of IDCC stock, including 752 shares of actual stock in his 401k employee purchase account. Also after this sale, Merritt still has exercisable options for 206,199 additional shares, and RSUs for 10,752 more shares.

Merritt's sale was a voluntary discretionary sale, and not a preplanned sale. I think that it did cause part of IDCC's price decline today. Merritt is the most knowledgeable individual re IDCC's licensing activities, so why would he be selling-off about a half of his actual pre-exercise holdings and about one tenth of his total potential holdings, if a big new license was about to be signed by IDCC in the near-term? He could just wait until after the licensing announcement, and sell at a much higher price.

It appears that Campagna's smaller sale of 1,725 shares was due to expiring stock options on June 30, 2004. Most IDCC insider sales in conjunction with expiring options are under preplanned 10b5-1 plans. Although this particular F4 did not mention that this sale by Campagna was done under a 10b5-1 plan, I imagine it was. There was disclosure earlier that both Campagna and Goldberg would be selling some shares under 10b5-1 preplanned sales due to expiring options during the remainder of 2004.