Laranger..I will try to explain my posts and reasoning..I am reposting your post to me because several hours have gone by ..and if you are as me..the entire content of the post has long gone out of your head..
Posted by: laranger
In reply to: None Date:1/12/2003 9:11:04 AM
Post #of 2289
Mschere.
We Old Pharts are a little slow. But I've been wondering for two days, what would prompt you to make the following post, with such precision. (Paraphrased):
>>>>>>>>>>>>>>>>>
'Ericy will improve its balance sheet by $200-$400 million, by a reduction in its provision for patent litigation, and make a joint settlement announcement with IDCC on January 28.'
>>>>>>>>>>>>>>>>>
Posted by: mschere
In reply to: None Date:1/10/2003 10:54:11 PM
Post #of 2274
Thought for the day..
There can not be an Ericsson/IDCC 2G settlement without a 3g licensing,Engineering alliance announcement..Since Ericsson is scheduled to publish their year end 2002 report on Feb 3, 2003..in which they will announce a $200-$400 million improvement in their balance sheet(By a reduction of their provision for patent litigation)..IMO..The joint announcement by Ericsson and IDCC will be announced Jan.28,2003.Both parties are busy as of today engaged in developing a 3G , and Engineering alliance agreement..
From the Ericsson Web Page
Upcoming events / Other Events
Date Description More information
February 3, 2003 Q4 Interim Report, Full year report 2002 More information later
Now for my reply..IMO
Point.#1..My CURRENT thoughts on IDCC as an investment vehicle has narrowed down exclusively to IDCC's ability to generate large sums of recurring royalties for its IP that is embedded in the 3G standards..and its ability to generate some substantial 2G royalties until 3G becomes the dominent factor in the wireless industry.The only obstacle preventing IDCC from realizing substantial profits above its $80 Million overhead that is being currently covered by NEC, and Sharp...is ERICSSON..A settlement by Ericsson today ..would in the conservative view of RMARCHMA ..utilizing .5% (which I believe will be 1%)will deliver checks from Ericsson,Nokia, and Samsung of after tax of $218 Million equating to $4.04 earnings per share ..It will look good to have that kind of earnings report for the first quarter of 2003..
Regarding the current 2G litigation with Ericsson....While an IDCC victory three months down the road will posibly bring a Judgement of some $3Billion before taxes..and add some $40 extra in BOOK value to IDCC..it will not trigger a 2G or 3G license from Ericsson..and a conclusion of Nokia Phase 2..
Do you think that Ericsson will be convinced by their Law Firms that they have a "Slam Dunk" and will prevail in a litigation that is "OPEN-ENDED" as far as damages are concerned? This question should only be posed to those that are over the age of 50..have experienced poverty..and currently enjoy a net worth of greater than $50,000,000!
Do you think that Campagna, Bolgiano, Clontz, Colson,Goldberg,Roath, Kiernan, Kaewell, Lemmo, Merritt, Miller, Tilden..who currently hold over 5,000,000 shares and options would play Russian Roulette and go for the "satisfaction" of prevailing against Ericsson ..some time down the road? These individuals could easily find their collective net worth grow in the next 30 days to well over $500,000,000 and NOT GAMBLE on a Texas Jury..(average $40,000,000 each). Ericsson as per the thoughtful post by Wireless Wazoo reflects the fact that their balance sheet contains a provision for liabilities of approx. $700 Million for patent infringement..Any settlement with IDCC under that figure will be transferred to their asset side..Ericsson could care less for the royalty that they pay going forward for handsets! They currently are geared to provide approx. $16 Billion per year for Infrastructure sales that IMO..could easily bear a 1% royalty rate to IDCC..As the largest provider of Infrastructure..no Company should get a more favorable rate for their infrastructure sales..Ericsson could hardly care what that they pay going forward for handset sales.
After Ericsson's 2G past dispute is settled..that will be added to IDCC's list of Nokia, Samsung, Siemens, Matsushita, Sharp, NEC,and yes even Motorola (who by default got a free pass) ..that comprises of almost 90% of the past 2G vendors..leaving IDCC with only, Philips, Alcatel, Lucent etc. to mop up with their para-legal team..
IDCC management knows that the Street will value every Dollar of recurring earnings at a multiple of 10X-25X.That leaves them a lot of wiggle room in negotiating with Ericsson a multi-year pay out that the Street will only value as a one time event that adds some cash teir book value.
30 days will either validate this post or send it to the waste dump.I hope that I will not have to pay top dollar for my last minute purchase of an air line ticket to Texas.
mschere
News 
Market Data 
Discover 
