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Technology Stocks : Interdigital Communication(IDCC)
IDCC 371.89+1.9%3:59 PM EST
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To: doug ray who wrote (4575)11/7/2000 11:32:23 AM
From: Bux   of 5195
 
Something IS fishy here, but shouldn't we be focusing on IDC's strategy for growing revenues which they had better do pretty darn quick?

Think about it. If no large institutions are willing to step up and buy substantial amounts of IDC at 10 1/2 (this is confirmed by recent volume), do you think other institutions would offer needed operating capital if IDC's recent spending spree depletes the $90 million cash that primarily came from Nokia's effort to jump-start their CDMA offerings? Yes, I know the reported cash burn rate has been relatively low to date but it would be a mistake to think this will continue to be the case. The new engineers will not work without competitive salaries and benefits. That will prove to be expensive, stock options in a company like IDC would not entice good engineers without guaranteed and continuing compensation.

Perhaps it will prove beneficial to model the increased expenses IDC is facing in terms of expensive engineers, chip development and testing expenses and their new marketing program. Then we can see how long IDC's cash reserves will hold out without a new source of revenue.

3G is here but there are no signs IDC receives payment from 1Xrtt. I wonder if the same thing will happen with WCDMA? Maybe that's why IDC is never mentioned in industry news.

Bux
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