Here's an interesting article I found, my commentary in bold... Looks like IDC is still sitting on our coattails...
Interdigital Communications Shares Lifted By Surge In Qualcomm Stock
Wednesday, December 29, 1999 03:47 PM
NEW YORK -(Dow Jones)- Shares of Interdigital Communications Corp., sometimes referred to as "Baby Qualcomm," (maybe because it can't quite walk on it's own yet?) hit a 52-week high Wednesday, shadowing the rise in Qualcomm Inc. stock.
In afternoon trading, shares of the King of Prussia, Pa.-based wireless technology company were up $5.19, or 22%, at $28.75. The Amex-listed stock (IDC, news, msgs) earlier reached an intraday high of $31.50, passing the 52-week high of $28 set Dec. 23.
At the same time, shares of San Diego-based Qualcomm (QCOM, news, msgs) were up $110.25, or 22%, at $613.25 after an analyst at PaineWebber Inc. initiated coverage of the company with a "buy" rating and a $1,000 12-month price target on the stock. Qualcomm shares will split 4-to-1 Thursday.
The price target was largely based on the potential value of royalties Qualcomm will receive from its code division multiple access wireless technology. CDMA is the most popular standard for digital wireless carriers to allow high-speed data connections on wireless networks.
Interdigital is developing technologies that support the standard. However, besides the comparison with Qualcomm, Interdigital didn't release any news Wednesday that would explain the stock's rise. (because there isn't any...)
Interdigital said it has been working on cellular technologies for more than 20 years. "Some of our founders worked with the founders of Qualcomm," spokeswoman Susan Sutton said. (I think they are referring to Irwin's janitor and a guy from the mail room who transferred over)
The company said it owns about 800 patents around the world that fit the standards for CDMA and time division multiple access, a technology used to separate multiple conversations transmitted over the air. Most of Interdigital's revenue comes from royalties it receives on its patent technology.
In November, Interdigital highlighted its patent portfolio and announced that its technologies support all five modes of third generation wireless standards adopted by the International Telecommuncations Union earlier in the month. (all of my patents support all 5 modes too...)
Since then its stock, which had been trading under $6, has gained momentum and investor interest (maybe they meant to say momentum investor interest...). The stock also became widely discussed in Internet chatrooms and was touted (good word... touted) by stock picker Bill Dalglish, who operates a Web site dedicated to telecommunications stocks. In September, Dalglish claimed to hold a significant stake in Interdigital. (what a surprise...)
Morgan Keegan & Co. analyst Ramkrishna Kasargod said Interdigital has become driven by chatroom speculation, (someone is actually admitting this?!?!) adding that it is one of 50 to 60 companies that can claim to hold intellectual property for third generation technology.
Kasargod said he doesn't know if the comparison of Interdigital to Qualcomm is a valid one. "(For investors, what it will come down to) at the end of the day is what share of the pie do you get," said Kasargod. (oops... sorry IDC.. QCOM just got the last piece... still a few crumbs in the plate though...)
In the nine months ended Sept. 30, Interdigital earned $24.3 million, or 52 cents a share, after an undisclosed charge, on revenue of $58.3 million.
The analyst thinks it's too early to predict how much royalty revenue Interdigital can generate in the future, and he wouldn't predict future revenue levels. However, he noted that the company needs to improve the predictability of its revenue. (sounds like a great story for a run-up!) |
