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InterDigital, Inc. Message Board

  • investora2z investora2z Apr 28, 2013 10:12 AM Flag

    200 DMA has to be crossed

    The results declared by InterDigital for Q1'13 were not good. The company reported a loss of $12.3 million ($10.93 million profit in Q1'12) and a revenue of $47.4 million ($69.3 million in Q1'12). However, the recent $30 million arbitration award (not recognized in books yet) has helped the sentiments for the stock. The company is also awaiting a decision in a another arbitration award. As per the CEO, the revenue was affected by the expiration of the 2009 Samsung patent license agreement. The new license agreement with Sony partially offset that loss. The cash on books was $635.8 million. The company continued its efforts to acquire more patents / applications, and made a strategic investment in BIO-key related to security technology. Higher intellectual property enforcement costs, and non-cash impairment of $6.7 million hit the bottom line. The stock is very close to the 200 DMA of $42.76 and the 50 DMA ($44.65) is also not too far away. The 10 day average volume is 326K compared with the 3 month average of 413K. On Friday, the volume was 562K and the stock closed 2.7% higher. The 52 week high is $48.68. The stock is trading at 2.66 times sales and 3.37 time book value. Future of the stock depends squarely on the ability to acquire more valuable patents and enforce licensing arrangements / awards through infringement lawsuits. The high potential of this business model is indicated by multi-billion dollar lawsuits filed by companies like MGT Capital Investments (MGT). MGT, which filed a lawsuit against casino gaming companies recently is likely to benefit from the $4.5 billion lawsuit. MGT entered into wagering business recently, making a foray into the operations side of the gaming business. Meanwhile, IDCC stock has to cross the 200 DMA with volumes and spend some time above that. After that the road will become clear for stronger moves towards new highs.

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