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Tessera Technologies Inc. Message Board

  • oldbutgrummpy oldbutgrummpy Aug 11, 2010 10:51 PM Flag

    Nice Artile on TSRA

    I just received an e-mail on TSRA from Randy Durig, you should read it, he looks for companies with greatly discounted values, good business, and strong execution or earnings.

    He has had many very good picks, and done well.

    Here is the lastest:

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    • It would help if he could spell. He catches some of the good points, but seems a bit out of touch with the dynamics of both company and stock price.

      Right now there's a strange situation in which company prospects and stock price are both at critical junctures, but the decision points are entirely disjoint.

      The future of Tessera depends on getting its enhanced density packaging inventions adopted. Once you've seen Tessera's patents, they seem like the natural way to go forward. But right now there's a pause in the move to higher packaging densities, and the longer that lasts the better the chance that alternative connection strategies will be invented and adopted.

      Share price of TSRA depends more on legal outcomes. In particular, the appeals of the 2 large ITC actions are extremely visible, and the amounts of money at stake are material (a total Tessera victory could bring in damages exceeding twice the company's enterprise value). Final resolution is probably 2-3 years off, but there are plenty of events to look at along the way.

      Thus, paradoxical situations are possible: alternatives to Tessera's enhanced-density packaging inventions could leave the company non-viable, while legal victories drove the stock price up. Or legal setbacks could leave Tessera a money machine extending far into the future while legal setbacks held down the stock price.

      I almost feel sorry for the analyts.

    • Good should bring some new buyers soon. I am a value investor and got into this stock because the fundamentals were very strong. After a few months, I realized that this company's business model is based on patent litigation complimented by some innovative initiative to mask it and some phd employees to make it look like an intel or texas instrument. What this means to shareholders is that PEG is impossible unless some analysts out there can predict the outcome.

      There is nothing bad about all the above. It remains a legitimate business and also an attractive business model for some investors. My advise is not to follow that analyst opinions because they are mostly founded on models nit reality assumptions.

      This reality ends up disappointing many investors who eventually depart for good.......this includes the good folks who run mad money. My strategy is to short it and hedge with out of the money calls against litigations news and articles like this one. This stock will always experience price and volume spikes. If you can sense new comers, especially, hedge funds, you could wait on the sidelines and go long when you feel it in the volume and short that another is leaving.

      That's my opinion and I have been wrong in occasions. Good luck.

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