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Pendrell Corporation Message Board

  • solef63tread solef63tread Aug 8, 2013 5:54 AM Flag

    Patent Companies Slammed by Obama ruling re: Apple ..

    All of the major patent companies (and the small trolls like Pendrell also) were slammed by this ruling and it absolutely devalues a lot of their inventory. Will take a while for all of this to trickle down, but this is now dead money for quite a while, like after they lost their Boeing $$. "Net" cash (after liabilities) is about $.70/share and they are burning it up at a decent rate. Their tax loss (hard earned by blowing $2.4billion on a prior business...demonstrating their acumen?) is virtually worthless unless they can either generate major earnings consistently or buy earnings with what is left with their cash. Only problem is that they can't buy enough earnings with their cash to be meaningful. E.g. For $150mm (about as much cash as they would spring for) they buy a company that is earning $15mm after tax (10 times after tax earnings these days is a good buy!). Using their tax loss, with no improvement in operations, they can generate approx. $24mm in cash flow and "after tax" (although for valuation purposes the street would probably go back to the "pro-forma" taxed basis) which would still be less than $.10/share given their 265mm shares (with another 30mm in stock options and RSUs etc....so possibly 300mm over time.) Not exciting at all.

 
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