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InterDigital, Inc. Message Board

  • thetrade50 thetrade50 Aug 3, 2011 8:04 PM Flag

    Why MMI is the better patent play

    And a better squeeze candidate...

    MMI has a 6.6B market cap, but has $3.2B in cash ($225M more still coming from MSI), $2.4B in deferred tax assets, and more patents than Nortel or IDCC. With the value of the patents somewhere north of $3B, that’s more than $8.5B (~$2B over market) before assigning any value to the mobile or set-top businesses, which are on pace to do 14B in revenue this year.

    I’d imagine that they could potentially make the purchase with a partner (like Samsung or HTC) and have them take the operating businesses while keeping the patents to defend Android and the Open Handset Alliance.

    Short interest is around 8%, presumably because most shorts haven't done the due diligence to understand the assets. Most are completely unaware of the tax assets, because of the valuation markdown based on lack of operational profitability. Moreover, part of the cash is easy to miss (and doesn't show up in Yahoo finance) as it's in the form of "cash deposits", as opposed to straight cash that Yahoo recognizes. The pending $225M in payments from MSI also aren't well known.

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    • This stock is taking a beating today.

    • Thank you. Good luck to you [and all the other longs] on IDCC.

      I am going to stop posting on this thread now as I don't want to annoy anyone too much (more).

    • Okay, I'll definitely look into MMI as soon as we finish IDCC's business first.
      To me, this is an once in a life time opportunity to get rich. That's why I spent a lot of time to collect all the information related to IDCC, directly or indirectly, from Asia and domestic. You can say day and night because there are 12 hours difference between NY and Taiwan and I always check the news from time to time. This helps me to make decision for investing IDCC periodically. Trust me, the buyout is about a 90% done deal and it's just a matter of time and price to be announced.

      GL to your MMI!

    • I'm suggesting that objective traders who have been attracted to IDCC as a play on the rising patent valuations might also be interested in taking a look at MMI, as I have.

      More than making a suggestion on what others do, though, I was also hoping for challenges to my thesis to help me crystalize my thinking, which this discussion has certainly helped me to do.

    • So what do you suggest? Asking IDCC to buy MMI or asking us to buy MMI?
      I'll evaluate MMI when it decides to sell. But now let's focus on IDCC please!

      Sorry for the rude.

    • That's not what I'm arguing at all.

      But I *am* I saying it's absurd to think Google has any intention of going after Android manufacturers... MMI in specific, considering they are Android-only (unlike HTC and Samsung, who also have WP7 phones). Their goal is to keep the costs of developing for the Android ecosystem as low as possible, and going after members of the Open Handset Alliance would not be in their interest.

      Of course the devices by MMI (and any other manufacturer) involve technologies covered by a whole gambit of patents across essential and non-essential technologies, and no company can reasonably expect to acquire all or even the majority of those patents. I'm not sure what made you think I was arguing that this isn't the case.

      Talking about Google in specific, their goal is to build a portfolio with enough quality and quantity to adequately deter attacks against the ecosystem, so that they can keep Android's costs as low as possible. MMI's patents, which vastly outnumber IDCCs, particularly in the 4G/LTE space, would be a big step in the right direction.

    • Please, please and please! Can you do it at Apple, Google or Samsung message boards and sell your valuable in-depth analysis there?
      Yes, MMI is a great company but people are not interested here. IDCC declares sale and we're discussing the story around the sale and it's nothing to do with MMI or MOT or what so ever! Save your energy please!

      • 3 Replies to pfchang2000
      • Hmm... for some reason my initial reply didn't seem to post (maybe I'm being rate-limited?) ... anyway, I said I am enjoying the challenges to my thesis on MMI because they are helping me to crystalize my thinking. I also asked if you might want to just click "ignore user" if you don't like my posts? I don't mean that to be rude, but I am getting value from this and am hoping others are getting value from me. I'd like to think at least some people on this board joined in on MMI this morning and saw the 4-5% gains...

      • And doesn't it help understand the IDCC story in the patent war to get analysis on what other options the potential acquirers might be considering? Isn't there value in trying to understand how the market is valuing similar assets elsewhere?

      • I don't meant this to be rude, but can't you just click "ignore user" if you don't like my posts? I'm responding to people that are responding to me... and enjoy the challenges to my thesis on MMI, since it's helping me to crystalize my thinking. I'm also hoping that some people might have been interested enough to investigate and get into on MMI this morning -- they would already be up 4-5% if so.

    • NO !!! What I am saying is that there are other patents that are all incorporated in the make up of every cell phone regardless of what type of platform is used and IDCC is the inventor of many. If you think that just because motorola uses the droid platform that they will be immune to lawsuits from other android platform users simply because they use the same platform you are wrong. Google is not adverse to using the patents they acquire for offensive purposes, not just defensive. Google will use patents in the same way as everyone else ... to their benefit, as they see it to be.

      jmho

    • To be clear, Google's goal is to help minimize the threats to the Android ecosystem as a whole. True, they need patents to defend themselves, but they've also been very clear that they intend to build their patent portfolio in order to defend the Android manufacturers from attacks by anti-Android competitors like MSFT and AAPL.

      It's not a matter of liability, it's just smart business. If they leave MSFT and AAPL (etc) to bully the Android players, it raises the cost of Android phones relative to MSFT or AAPL, hurting the overall competitive position of Android and limiting it's viability as the dominant mobile platform.

      This battle between Android and everyone else is the basis for the patent bubble...

    • "you do not understand patents used in telecommunications at all if you think the android platform is all that is viable to those that use it."

      Huh?

      You're arguing that Android isn't viable for those that use it?

      Or do you mean liable? Do you understand Google's position in this patent war? They've been very transparent about their intentions.

      See Drummond's blog post yesterday?

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