Replies to post #99690 on InterDigital Inc (IDCC)

[spider69]

one other thing to look at...I too think they are overcompensated for a job half done at this point. However, based on the amount of shares these guys are "given" it would go across all principles of diversification to buy more IDCC shares with their own $$$. They would be more prudent to look for other avenues of investment to balance their risk....JMO.

[rmarchma]

Clarence very good post. I'm just catching-up on some of the recent posts, and thought your following message is certainly worthy of a repost and reread by all:

Posted by: Clarence
In reply to: j70k who wrote msg# 99669
Date:3/28/2005 11:41:02 AM
Post #of 99989

I think that we do have two legitimate gripes with management - 1) the continuing dilution of our holdings through an overly generous stock option plan; and 2) the weak showing of management in terms of investing in the company out of their own pockets. I voted to defeat the last option plan, and I will continue to oppose what I consider to be over-reaching by management whenever I see it. They are well paid. We don’t need to continue to transfer ownership of the company to retain our “fantastic” people. I don’t mind giving bonuses - generous ones at that - for performance, but the performance comes first in my office before I reward my employees. I have waited too many years for evidence of “fantastic” (at the management, not at the engineering level, where IDCC’s people have kept them at the forefront of this technology for a very long time).

I am not ready to say that management is inept and needs to be replaced just because the stock is not trading higher. IDCC is a pure IP play. I know that I miscalculated what I was getting into when I bought this stock, and I think that many others have as well. It took me too long to figure out that the big, rapid run to riches is very probably not going to happen. The flight to 82 was an anomaly unlikely to repeat itself. I expect that if we are not acquired, the company will have to continue to fight for 3G money just like it has for 2G, and will for 4G and 5G and whatever comes next, if they are still in business. It’s tough, but it’s the business IDCC is in. It doesn’t mean management is good, bad or otherwise. If they manage to pull things together in the way QCOM has they will be the exception and not the rule, and for that I will vote them all hefty bonuses.

Corpbuyer says “Here are the facts: A, B, C, and D. From those facts I conclude that management is corrupt, morally bankrupt, stupid and deserving of our undying hatred. Nevertheless, the company has some really cool stuff and if we could replace the bums, we could all get rich.”

Seems to me that he and I are doing the exact same thing - trying to figure out the best way to play this thing that will make us money. It doesn’t mean that he is a short. He bashes management, but he thinks that he has good cause. He doesn’t bash the underlying potential of IDCC - it has seduced him as much as it has many of us (me included - which is where I went wrong).

The only agenda we can reasonably infer from his posts is that he is trying to make money from this stock. If you don’t like him or if it upsets you, don’t read his stuff.

I don’t agree with all of his conclusions, but that doesn’t mean that he is trying to deceive me. For what? Our posts don’t control the price of this stock. A short in disguise? Please! Even if he is a short, why would I care? The only relevant inquiry is whether or not he (or any other poster) can provide any information that is of value to me, given my own personal criteria for decision making in connection with this stock.

How about the guys who say “I have a gut feeling that we are going to go up today, ” or “Bricks coming!” What is their agenda? To make the price rise? Not likely. Could it be that they have the same agenda as Corpbuyer - that is, to make money on their investment? Could it be that their observations are not meant to influence our buy/sell activities - that they merely reflect their wishful thinking? The passions of the poster? Their fervent prayers?

I won’t tell Corpbuyer to stop criticizing management. I won’t tell anyone else to stop defending them. Maybe we'll soon be toasting IDCC’s great success - it could be coming any day now...if only we’d get the right news release (LOL).

[Danny Detail]

Clarence .. I am not ready to say that management is inept and needs to be replaced just because the stock is not trading higher. IDCC is a pure IP play. I know that I miscalculated what I was getting into when I bought this stock, and I think that many others have as well. It took me too long to figure out that the big, rapid run to riches is very probably not going to happen.

The lesson that you and others have learned the hard way is that the correlation between the success of a company and the quality of its management is nearly perfect. WS reached that conclusion almost 50 years ago. This was the genesis for the role of sell-side analysts who were charged with getting "up close and personal" with management in an attempt to reach an informed judgement of their ability to get the job done.

In IDCC's case you and others believed (still do?) that the engineers would carry the day no matter what. They didn't and they never will. There is no way this company will ever be a success in the absence of a business strategy that successfully deals with all of the myriad of factors that come into play in this highly complex business. That is the job of management as it is in every company and that is why they make the big bucks.

Corpbuyer says “Here are the facts: A, B, C, and D. From those facts I conclude that management is corrupt, morally bankrupt, stupid and deserving of our undying hatred. Nevertheless, the company has some really cool stuff and if we could replace the bums, we could all get rich.”

I have no problem with Corpbuyer posting the "facts" as he sees them. I have big problems with his -1-1 = -5 conclusions about management. Leaving aside whether his facts are indeed facts, no self respecting sell-side analyst would ever conclude that they are even close to representing sufficient evidence to reach such a negative conclusion about management. Moreover, any investor that thinks a company run by a management that is "corrupt, morally bankrupt, stupid and deserving of our undying hatred" can be turned around quickly by "replacing the bums" is deluding himself as well as possibly others on this board. Any sell-side analyst that reaches such conclusions about managment, particularly since "the bubble", that does not recommend to his clients to get out is making a very career limiting move.

For Clinton it was "the economy stupid." For investors it is "the management, stupid." Some on this board have painfully learned that lesson and others haven't. Those that haven't will continue to be hurt financially I predict. I have not reached a conclusion on IDCC management yet, either pro, con or neutral. But I can assure you that if my evaluation of IDCC's management was even half as negative as Corp's (or some others) I would have sold many months ago rather than posting my conclusions repeatedly, day after day, ad nauseum.

With 100,000 posts here and many more than that on RB, I submit that we have orders of magnitude more "facts" about posters on this board with which to reach conclusions about them than we do about IDCC management. Since I don't think Corp is stupid by any means and would not continue to hold shares in a company whose management he holds in such disdain, my conclusion is that he has a hidden agenda.

I have no idea if Corp is a "short" or in league with them, but based on experience I would certainly not be as dismissive of the possibility as you are. I think you significantly underestimate the lengths to which shorts will go to drive the price down and, more importantly, fend of the potentially disastrous consequences of a short squeeze. These people are not nice and they don't play fair. Like politicians they try to get every "vote" they can and internet stock chat rooms are a very inexpensive and effective way to spread their FUD. That is why you, as a long, should care if he is a short or a paid representative for a short(s). It is one thing for the stock to not reach its potential because IDCC's management fails. It is quite another if the stock goes down or languishes because shorts constantly create the perception that management has failed or will fail when they are capable of succeeeding.

I also don't know if Corp is campaigning for votes on this board for someone who very much wants to become a Director, but if I was a betting man that is where I would put my money. Why should you or I as longs care about that? After all maybe this individual(s) would shake things up in ways that would lead to a greater and more rapid success for the company and its shareholders.

First of all Corp was asked by me and others to detail his plan for how a new management of IDCC could be more effective and he was unable or unwilling to do so. Negative political messages in the absence of a better plan don't get my vote because management change is always disruptive in the short run no matter how good the new management's plan for change. That is particularly true in terms of the stock price since the management scandals of the late 1990s. Publicized shareholder revolts now have the potential to depress the stock price significantly for long periods of time.

Finally, there are critical junctures in every company's history where it is inadvisable to change management even if they are mediocre or worse. I believe that IDCC is smack in the middle of such a time and will be for the next six to twelve months.

While I agree that the run to 82 was an anomaly, I am not nearly as pessimistic as you that we won't see such a run again, except this time it will be real. If that does happen it will be because of management, not in spite of it. If IDCC's management is inferior we won't see 25 for a very long time if ever even if they are eventually replaced.

MO
Danny