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Pendrell Corporation Message Board

  • japanclosed japanclosed Aug 7, 2013 2:14 PM Flag

    Stock price drop is an excellent gift

    The tax loss carryforwards and cash per share alone are worth more than where stock is trading. If they win patent infringement against ZTE stock could triple. That is only ONE of hundreds of patents they own in technology sector. Nokia patents alone will be enforced aginst the likes of apple and samsung. The reward is worth nominal risk.

    Sentiment: Strong Buy

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    • The risk is NOT nominal. The cash (minus liabilities)/share is under $.70/share. Suggest you read the 10-Q to get your facts straight...They have $198mm in cash and 266mm in shares outstanding. That works out to $0.74/share. The stock is at $2 which is almost triple its cash/share. If you take out liabilities of $15mm then they are at $183mm which is $.69/share. Thus they are valuing IP that they own at $1.27/share (at $2.01 price) which is $338mm which is several times what they have paid for it...They had a $600mm judgement against Boeing which would hae been over $2/share at the time. The award was under appeal by Boeing and the stock traded at around $2+ for a while based on hope for that award, but the award was thrown out on appeal and the company settled for a few $$ towards their legal expenses. The stock dropped to $1 until some people like 10-k detective started posting on message boards etc. Also there are another 36mm shares yet to be added to the dilution count for SARs, options etc., so around 300mm shares. They have a large tax asset, but will never get to use it since with the $198 they have left in cash they can't buy anything earning enough to soak it up. This is a value trap IN MY OPINION. Yes, I owned it at $2.25 hoping for the award and lost and held on and was able to just get out when the stock spiked, so broke even over several years. The management was in a completely different business under Craig McCaw, but lost a huge pile of $$ (2.4 BILLION, I believe). In any event, this is a lottery ticket, not a business...and one where the people running the lottery are guaranteed good payouts, but you are not!!

 
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