Replies to post #369819 on InterDigital Inc (IDCC)

[sasham]

Some of the expenses that make up the loss are not cash related, i.e. depreciation or in this case I beleive the impairment of an investment. For example, if IDCC bought the investment at $10M and later realized it was only worth $8M then $2M in 'expense' (due to the loss) would be included in this period's income statement even though IDCC did not reduce their cash account this period for this transaction.

[Fog1937]

You collect Money today (book it), but do not earn it until sometime in the future.

This 1st Qtr report looks bullish to me. Why?

Surprise Arb win which we are likely to collect(possibly 2nd Qtr);
Another Arb with $48M on the books and indicated to break our way;
Two other Arbs in the works (little known about);
SONY on the ledger and others in Court (will settle some time, but most likely settle);
Half this Qtr's loss was a 'Paper Loss' of an asset write-down, not an abondonment and could come back sometime in the future;
High level of legal costs suggests the Company is pushing its issues - 'no more nice guy';
Market tried to start a selling panic, but failed because small investors held their hands or even bought into the 'decline';
aaaaaaavailable shares are thin that's why price rallied on small order increments;
Looking at larger trades early in the day and matching simular sells and buys, suggest market makers do not have the confidence to keep (possibly naked) positions open too long.

Once longs tend to hold positions (as may be now) shorts will have a tough time to cover and can poach only on each other - we may be there now.

If I was LG or any other in Court with IDCC and faced with potential settling, I would quietly go in the market and buy up to 5% of the shares 'less one' (to avoid reporting) and then settle.
The price run-up on two million shares would go a long way to pay for a license.

[FISH21049]

IDoCare: Lets say you agree pay me UP FRONT for 1 year's licensing fees in January. The entries are:

DEBIT Cash (Asset Account)
CREDIT Deferred Licenising fees (Liability Account)

THEN, each quarter the company makes the following entries:

DEBIT Deferred Licensing fees (Liability Account)
CREDIT Income (Income account

At the end of 4 quarters, the Deferred Licensing fees (Liability Account) is at ZERO

The FREE CASH FLOW has nothing to do with the LOSS as such.

The cash you take in (from those who PREPAY fees for 1 year and from those who pay quarterly) minus the cash you pay out (legal fees, payrolls, taxes, etc.) results in cash sitting around and considered 'free cash flow'.

Later on, however, the reverse occurs. The person who paid 1 year in advance pays you nothing the last 3 quarters, yet, the company pays out for legal fees, payrolls, taxes, etc. during the last 3 quarters, hence it is negative cash flow (no cash coming in but cash going out).