Hi, 1st time poster, but have been following IDCC peripherally since 1999-ish. I remember thinking how perceptive I was when I put this stock on my watchlist, thinking, "in the future, everything will be wireless! And everyone will have to pay these guys!"
Well, that vision is largely coming to pass, though the getting paid part turns out to be much more tricky and expensive than one would like.
Nevertheless, the Nortel deal seemed to be the watershed moment for IDCC execs and shareholders, validating all of the research, organization and execution over the last 10 years. Being relative experts in the field of wireless patents, one would think IDCC brass had pretty good reason to believe what they said at the time, ie. "Our patents are worth at least as much as Nortel's".
So, they genuinely believe they are worth $4-5 billion($88-$110/share I think), that begs the question, what's the minimum price they could in good conscience accept? Breakeven on my speculative trades is $60, which at one point seemed pretty conservative..what do you think is the "accept/reject" threshold price for the company?
One more thing, the Barclays 'downgrade' was the vaseline before they ask to bend over and take $60 from their PE pals...
That would be a $3b deal, PE puts in $1B, Barclays finances $2b, PE pays itself $700 m dividend, they will have bought idcc using $300m!
Considering Nortel was able to get 4.5 billion on patents they were NOT ABLE to generate meaningful income on, that puts IDCC's as much more valuable than those. Being IDCC is able to generate SIGNIFICANT income from theirs.
Don't believe everything you read, but clearly a bid over $100 is not in the cards here. When board made decision to sell stock was around today's price. So they would want a decent premium over $44..I think $70 or so would suffice.
Re: "what's the minimum price they could in good conscience accept?"
In my view, the BOD will reject any outright sale of the company for less than $65-$70 a share. Barring any late developing consortium deal, it's beginning to look like IDCC will remain independent.
BTW-- It's comical that the posters on this board think they can have any influence on a buyout price!! If the BOD approves a buyout or sale of patents, the hedge funds and investors who hold the big share blocks will certainly approve it, regardless of what the peanut gallery thinks about it!!
Slick, you are wasting your time.
The uninformed diehards on this board will just sit around all day trying to convince themselves and each other that a multi-hundred dollar bid is just around the corner("being negotiated at this very moment by multiple consortia"). They won't listen to logic. They ignore facts from people in command of such facts. They can't read the writing on the wall. They are hopeless and helpless.
When they are not being unrealistic or defensive, they simply shake their collective heads in disbelief..."How could this be?"..."It must be manipulation."
""<<Barring any late developing consortium deal, it's beginning to look like IDCC will remain independent.>>""
Once again you have absolutely no way of knowing there are not already multiple consortia that are actively bidding. In fact we have more evidence that there ARE multiple consortia than there is there is NOT.
Oilman you are exactly right! at 60-70 per share they would not be getting anything for the future earnings and revenues which is supposed to be 30-40.00 per share on 2B in 3 years.
IDCC would laugh at a 5B dollar offer the stock will be over 200 easily.
If IDCC does not sell they need to seriously court some big money at JP Morgan Goldman Sachs have an analysts conference week and be more aggressive with infringers.
They are a bunch of engineers that don't realize the value of the company and how precious their own inventions are. They need a pit bull CEO with a marketing degree.
If I was IDCC I would raise rates. Their rates seem to be way too low.
Then sue every infringer.
These guys need to start playing ball.
They don't run this like a business.
The need a cut throat CEO like RMBS
That may be what they think it's worth, but at this point, the market seems to be saying "no way". I can't see them turning down $5billion here, or even $4, as it's a big premium to market.
But I can't see less than $3billion(~$60/share)as it would grossly undercut the board's own belief as to the fair value.
++I've seen all the talk about the value of the patents, but would-be buyers are also getting the machine that produces the patents...what's that worth?
Many are underwater on this..some DEEPLY so..(me)...so that may have some bearing on what people will accept..the longer this takes the more willing investors will be to just get back their investment...IMO. On good days..I feel "Gaad, these patents are worth a fortune...and now we have the Mosaid buys...which proves the patent wars are not cooling off. On bad days...I'd just love to get my investment back so I could enjoy the Holidays.