badgerkid, with you on the idea of seeing Bill Merritt do something creative in getting to a "win/win" agreement with Nokia. Just hope he keeps the longer term big picture in focus. Would hate to see him make a concession to Nokia just to get the ball rolling and then realize that it will end up costing us in the long term.
I'm keeping the valuation thing real simple and conservative until the smoke clears. Wireless handsets were selling at a 170 million/qtr pace last qtr with most firms guiding that to continue. Put just a one dollar per handset license fee on a sales volume number like that and crank the numbers.
I get $1/handset x 170 million sold/qtr x 4 qtrs = $680 million/yr recurring rev when everybody is licensed and paying just a buck a handset. Check me and make your own estimates on when/if/how that might happen. TIA.
OK, still cranking. $680 million/yr recurring revenues minus IDCC's $120 million/yr operating expense run-rate = $560 million gross profit/yr. (That's a pretty good attention grabber after years of lumpy revenues and win/lose earnings reports.)
Speaking of earnings, let's crank some more. Estimate a tax rate as high as 50% and we still have $280 million/yr flowing to the bottom line. Divide that by the ~54 million shares outstanding and we are talking about $5(+) earnings per share. Pick your own P/E for any point along the ride to that potential. Only takes a 20 to ring the magic $100/share bell.
(Here is a an interesting twist on "future value". IDCC may NEVER trade at higher P/E levels than it has been in the past, or that it is trading right NOW! Go figure.)
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