Thanks a bunch for explaining this history. Revenue coming from law suit settlements/agreements that either pay out one time (episodic) or over a period of years (recurring). Lots of lawsuits because it's a highly complex cutting edge technology.
Thanks for your understanding. Afraid I'm still baffled but that's ok. It would seem this is a factor of whether the shares are held in individual margin accounts as opposed to held in cash acct/position.
Tessera makes money by licensing intellectual property (and doing joint development). Sometimes it's unclear whether a party is using IP another party owns. So you get lawsuits. Tessera used to sue a lot, and won a lot because they had a dynamite patent on flexible connections, which has since expired. Some of the disputes got nasty. Starboard instituted a policy of Tessera being much 'softer' in enforcing its rights to IP, in return for seeking to do business with those it is having problems with.
Especially in the old days, the decision in a lawsuit could result in a bolus of income. That's episodic revenue, and it's hard for investors to think what to make of it. Post Starboard, Tessera states episodic and recurring revenue separately. There was a to-do a few months back when a journalist pointed out that when legal settlements were of the form "$5 MM a year for 5 years" (a structured settlement) rather than "$25MM next Tuesday," Tessera was reporting them as recurring. And it's NOT clear that they are the same sort of thing as licensing fees and payment for services. But if a settlement with payments over 3 years is really a cover for negotiating an ongoing business relationship, it's hard to argue.
This Q's episodic revenue was mostly the result of an audit, in which a customer concluded that "Oops, we made more use of your IP than we had paid you for."
I don't know a better available number. But my impression is that single stocks held in individual margin accounts are a smallish part of the float for most companies, So the trend is meaningful. Institutional % can get misleading when a lot of ownership is through "sector funds," which are managed pretty mechanically. Another distorting factor in some companies is large convertible securities issues--these can be hedged with short positions, occasionally making institutional ownership larger than the float. I think TSRA is represented in some sector funds, but not as a top holding.
Thanks for your input and glad it's positive. Can you help me understand what all this "litigation" is about with TSRA? Generally a stock holder doesn't like to see a lot of litigation or legal liabilities. But I recall reading somethinjg in the past TSRA is making money and/or gaining advantages through litigation. What does your "structured legal settlements being recurring revenue" mean? kg
Thx for adding to this discussion I can see you know more than I on this subject. Would you say that institutional holders or "% Held by Institutions" reported by Yahoo Finance is a relatively meaningless statistic? Do you know of statistic or another way of coming up with "individual holders" of a stock?
I confess I have not done enough homework on the ER yet to give you much of an opinion. Always good to beat earnings and revenue, so of course that's a relief. I'm not impressed with the Guidance numbers, guiding a beat for next qtr but not by much. Buyback is kind of hard to weigh since it's already happened, adjusted into the existing share count and sp. I love the dividend yield for such a young co and tech stock to boot! It's making me money even if the stock price is flat. Tech in general right now/during the TSRA ER is down/out of favor. So, that's a current tailwind for TSRA. Dunno. I do know I'm keeping my stock and looking forward to next Ex Div Date May 24th! kg
I am extremely happy with the conference call. Starboard seems to have won the work-out as they won the control dispute. The legal docket is as clear as I can recall, and while there haven't been smashing victories, the possibility of future business doesn't seem to have been shut off. Narrowing research focus (and buying what was available where it was an improvement) has generated great results. I used to say that when the industry needed 400 connection per square millimeter Tessera would be ready. Now that's up to a million connections per square millimeter. Obviously, assembly with the delicacy that sort of number requires isn't for everyone, so the ASE deal is extremely important.
Management makes no bones about structured legal settlements being recurring revenue. If you expect a license to follow the end of the settlement, that's completely reasonable. Apparently serious talk about possibility of a contract with Qualcomm in the future definitely goes along with that.
An analyst question gently suggested that Tessera is lowballing its forecast for the rest of the year. The answer, basically, was that they had included some optimism in the original forecast, so some of the recent happy developments were within the original forecast.
Stock "owned" by individuals in margin accounts is registered to the brokerage (which can lend it or use it as collateral). In return, the individual can borrow money against it from the brokerage. This can bite if the brokerage fails suddenly (great historical example: DuPont Glore Forgan--suddenly doesn't need to be fast if your records are scrambled enough). When a company is being subjected to heavy prolonged short selling, holders often choose to move stock to cash accounts (where it is registered in their own names, and is unavailable for lending) (this is obsolete, since anti-stock-watering rules are toothless overseas).
whattya think, kg? happy with the quarterly results? i haven't read the CC notes yet but i thought numbers were good. would've rather seen an increase in the dividend as opposed to the stock buyback though.
I track job postings for the stocks I follow...the stocks I'm long have a solid amount of job postings.
Tessara has zero job postings...not good. Suspect the subsidiary's do.
WSJ article today saying this last Qtr US non defense capital goods spending declined 2.4% and that US businesses have been/continue to be hesitant to spend on staples such as "computers,, machinery and electrical appliances". I think this is why so many stocks like TSRA are stuck. The economy needs to promote confidence and it's not.
Hi tommy! I never understand the institutional holders term like what's listed on Yahoo Finance. You call Fidelity and the broker says that term typically includes the individual stock holders holding the stock in a brokerage acct. But yes, 97.5% is high comparatively to most stocks.
still can't help but think that with all the talk of self-driving cars and drones and all the sensors and cameras that will be involved...
i'm still here, kg! bought another 200 shares yesterday. i don't think many individual holders in this stock. according to yahoo! finance, 97.5 percent of os shares owned by institutions. and another percent or so owned by insiders. good luck!
I confess, I originally bought this as a trader and got stuck. Having admitted that, still, I always do certain amount of DD before i buy traders and TSRA seemed a good bet at the time to hold its own long term. The fact that it hasn't kept tanking after the initial drop from my $36 to now $29-$30's and holding quite nicely is an indication my DD wasn't too bad...
for someone pretty "heavy" into this stock you don't follow it too closely, do you?
Thx. Yes, I'm enjoying getting the dividend. How long ago did we acquire "ziptronix acquisition" and when do you think revenues from that should start showing? kg