Do you know how much Bellcore has received in licensing fees (and royalties) from their 15 licensees so far?. At yesterday's close the transaction is worth about $45 MM, and I presume that Bellcore keeps the licensing fees already paid, so that must be the value put on the future stream of royalties. The core generic patents probably have no more than 10 years to run, thus we must assume that VLNC expect to get $10 MM in royalties or more every year to make the deal sensible, and not five years down the road, but in the near future. If one assumes royalties rate of between 2% to 5%, or let say 3.5%, they need only $300 MM per year of royalties bearing products. I think that is quite within the realm of possibilities, and the deal seems to be an excellent one for VLNC.
In the meanwhile, we have a small bounce in the Naz, and i used it to unload the SCMR and CREE bought this morning ($59 and and $102.5), and am waiting for "the inevitable relapse" to get back in these two. I still have the losing position in SCMR bought yesterday at $61-3/8, but at least it is now "protected" to $58. BRCM never gave me a chance to get back in, apparently, I was too "greedy".
Zeev |
