Extraordinary buying opportunity for fence sitters!
The market's negative reaction to today's news concerning Siemens and InterDigital provides an extraordinary buying opportunity, in my judgment. Volatility in share price, while scary at the time, is often a wonderful opportunity for fence sitters to buy shares at a remarkably low price and for those who already own positions to increase them at bargain rates. I am buying additional shares today.
It has been apparent for sometime that what the market is looking for in IDC is bottom-line performance. What the heck! At five dollars per share, forty percent of the share price is in CASH! That is simply incredibly bullish, and the market eventually will recognize that. The Siemens action today does not negatively impact on bottom-line performance in 1999. The positive factors for bottom-line performance are already in place and will be increasingly prominent beginning next Thursday when fourth-quarter earnings are released officially.
I've been wondering for some time whether Siemens would continue to try to be a serious player in WLL. When one reads the business press, it is obvious that Siemens has been having a tough time being profitable the last several years. Its interests and product lines are so diverse it is not been able to concentrate in areas that it can do well. Shareholders have been demanding changes and concentration on its most profitable areas. To it is logical that the Siemens would cut back in WLL, the only question probably was one of timing.
The real news today is not that Siemens broke off its Alliance relationship with InterDigital, in my judgment, but rather that Siemens is restructuring its business lines to become more profitable and it was only natural that it would have to drop alliances like the one it had with InterDigital.
I wouldn't be surprised if Siemens may not have had some concern that IDC was now going to be in bed with one of its biggest competitors, Nokia. It probably gets a little sticky sharing new developments with InterDigital -- not perhaps being absolutely confident that information would not accidentally slip over to its competitors. but I assume that the much more important issue was Siemens focusing on its profitable business lines and pulling back from WLL.
If it was necessary to sacrifice our Alliance relationship was Siemens as a price to pay for a new relationship with Nokia, in my judgment it was a very small price to pay. Nokia is absolutely tops in its field and an association with them will bring tremendous profits to IDC.
So on options expiration date, when the market is extraordinarily volatile it doesn't surprise me in the least that IDC share price has been hit today, but as I posted earlier today, I wish we could have gotten through the day at five or above. Not all brokerages issue margin calls when share prices reach five dollars or less, but some do. That could translate into some additional volatility on Monday, I suspect. I sold a mutual fund position today so I'll be in a position to purchase more IDC on Monday, if the price remains so attractive.
Beginning with the official report on fourth-quarter earnings next Thursday, I foresee a marked improvement to in IDC share value that will be out great benefit to all of us.
It's time for us all to catch our collective breath, have a relaxing weekend, and look for a much more positive price action beginning midweek. The positives for IDC are still very much in place and will continue to pan out in the days, weeks, months and years ahead, I believe.
Thanks, Corpgold (Darrell) for your very helpful and informative posts today.
Bill |
