Tessera Technologies Inc. Message Board

Tsra is a likely target in the tech M&A frenzy. They have a bullet proof balance sheet & highly compelling valuation. Smart phone camera sales are only going higher & addt'l applications represent huge growth. Investors can entertain a buy-out premium each night as they rest their heads on the pillow.

Legal matters control the stock price these days. Two major ITC enforcement actions are in Federal court appeals; a total Tessera victory would result in payments comparable to the enterprise value of the company. There is an arbitration going on with perhaps half that much at stake. A patent challenge could open Tessera to serious claims for return of royalties. When the action is hot and heavy, legal expenses can peak at levels comparable to total earnings.

Historically, Tessera has a strong legal track record.

The real issue for the company is that it is moving from building its licenses around very fundamental [expiring] patents controlling chip-scale packaging to less fundamental patents covering enhanced-density packaging (a business segment which is being held back by the recession). Both software and construction techniques in the optical segment (which is small but is growing quickly) are difficult to protect, making Tessera return to the sale of "things" incorporating its IP.