Replies to post #129497 on InterDigital Inc (IDCC)

[Corp_Buyer]

"IDCC Selling Puts...help me?" - well, despite the financial attraction of this idea, there are at least 2 significant issues to prevent this:

1- trading in derivatives, even long term ones such as Jan '07, give the APPEARANCE of trading on inside information

2- speculating in any derivative instruments would probably not be deemed prudent financial management of shareholder/company cash when it comes to Director fiduciary responsibility.

Public companies often have a strict POLICY, for officers and directors at least, that trading in derivatives on the company stock is forbidden, with individual sign off every year confirming compliance. FWIW, I agree with this policy and I hope IDCC follows such a policy.

IMO, Shay and HC should go for all their issues with insider trading windows (e.g. during the critical 2003 Nok negotiation), compensation policies contrary to the spirit of the shareholder vote in 2003, HC failing to pass ISS' standard for an Independent Outside Director, HC's triple CHM position on the key committees, failure to implement shareholder vote to declassify the Bod, conflicts of interest (HC being highest paid), etc..

"start yelling at people who can actually do something constructive" - shareholders CAN and should take constructive actions e.g. it is the season to submit shareholder proposals and there are quite a few I would like to see put to vote by shareholders.

If you have held more than $2,000 in IDCC stock for the past year, YOU can submit a shareholder proposal. Here is how:

http://www.law.uc.edu/CCL/34ActRls/rule14a-8.html

MO,
Corp_Buyer

[olddog967]

MTJBKH: I formerly held stock in 3Com, which for a short period tried trading options on the company stock. As noted below from their 2001 10-k report, after having to take a $140.7 million hit to settle a sale of puts, they gave up. I think IDCC has enough to be concerned about without taking on option trading.

"In fiscal 2001, 3Com initiated a program of selling put options and purchasing call options on its common stock. These were "European" style options which, in the case of put options, entitle the holders to sell shares of 3Com common stock to 3Com on the expiration dates at specified prices and, in the case of call options, entitle 3Com to purchase its common stock on the expiration dates at specified prices. The option contracts gave 3Com the choice of net cash settlement or physical settlement or net settlement in its own shares of common stock. These options were accounted for as permanent equity instruments. During fiscal 2001, 1.2 million shares of common stock were repurchased through exercised puts for a cumulative purchase price of $19.9 million. The option contracts contained per share price floors, whereby a drop in the price of 3Com common stock below such price floor could require accelerated settlement of the put options by 3Com. Due to a decline in the price of 3Com common stock, accelerated settlement of the remaining put options was required. 3Com elected net cash settlement of 15.3 million put options outstanding, and related call options, which was recorded as a reduction of share capital in the amount of $140.7 million. As of June 1, 2001, there were no put options or call options outstanding."

[floridian ggg]

MTJBKH: Company selling puts........

Perfectly okay for a company to do so, unless, as Corp says, the company's doing so based on inside information.

Microsoft, for one, has over the years sold a heck of a lot of puts and banked the premiums.