BUX:I mistakenly believed that registering at SI qualified me to post. While trying to submit a response to Bix' post #3749, I was made rudely aware of the need to subscribe for a fee, which I won't do. Would an SI subscriber, if there are any here, kindly forward this post to Bix?
Many thanks,
Renntech
PS
I got long-winded, as usual, so kindly include the following posts, as well. Thanks again.
Bix:
There are those on Wall Street who, as you do, would caution that investing in IDC is speculative at best. But they, as do you, also suffer ignorance. I make the latter observation in a literal sense, not at all disparagingly. "He that doth not know those things which are of use for him to know, is but an ignorant man, whatever he may know besides". Tillotson.
Admittedly, a case could be made for the speculative nature of investing in IDC. This company has an established reputation on Wall Street as a company lacking direction, management and the ability to convert their resources into revenues.
Throughout the late 80's and during much of the 90's, IDC was engaged in designing telephone equipment that would eventually be dropped. They devoted much energy developing BCDMA together with Seimans and Alcatal only to have this endeavor substantially abandoned, yielding little to the bottom line. And what of the first generation ASCI chip heralded by the company which project was canceled in favor of even loftier pursuits? Further confusing to Wall Street must have been reports from a temporary CEO that IDC would become an IPR company. One could soundly argue, as many Wall Street observers do, no doubt, that IDC appears to fall somewhere in the below-average range for "direction."
As an IDC investor, I confess my humiliation over the managements' handling of recent and not so recent matters. They have yet to confirm an appointment for a permanent leadership role. Rumors, allegations of improprieties and SEC investigations have haunted this company long enough to relegate it to penny-stock status in the minds of many. All the while, the management continues to announce that: "All is well in Zion", and that: "The future could not be brighter". If IDC's management yet fails to appreciate the long-term effect of their apparent ineptitude on the value of their stock, they should consider this. If Ameritrade's 19 year-old, skinny red-headed punk of their commercial fame bounced out of a pool donning sneakers, threw his arm around his girlfriend and marched dripping wet into the Nasdaq and announced: "Hi. We're IDC. These are the resources we own. Tomorrow, we begin trading as a new IPO", I can assure you that this issue would begin trading around 250. By the end of the week, it will have split and been trading in the upper 300's again. Today, unfortunately, Little Boy Blue comes begging to visit 35 once more. So, we won't split hairs over management.
As for their historic inability to convert resources into revenue, their record is no less compelling. Regarding IPR, most companies know they must protect what they own. In IDC's case the corollary to this is particularly applicable in regards to the perception by Wall Street. That is, you only own what you protect - or can protect. Their loss to Motorola, the pending Ericsson litigation, the widespread, non-royalty yielding use of their alleged intellectual properties threatens to weaken Wall Street's conviction that even the royalties IDC now enjoys will continue. Already, some investors have suggested that the Emperor's clothes have been revealed.It may surprise you, but, it is partially for these reasons that I am heavily placed in IDC. Why? Well, for all of IDC's past failings, I don't believe they are stupid. You see, they would be incalculably stupid, given their perception by Wall Street, to be so pretentious as to make an earnings announce prior to the opening bell on Friday, and only have marginally above average earnings to share. I am equally convinced that they must surely know that Little Boy Blue tooting about further grandiose plans would be certain death, as well. The reaction to either scenario or combination thereof would likely be: "Who invited them to the party?", followed by a fury of shorts not witnessed since the days of Irridium. No, I refuse to believe that IDC is that stupid. This belief might qualify me as just one of many lemmings mindlessly racing for the proverbial cliff, but I think not. One can only speculate what Friday's announcement may contain, but I am almost certain that whatever it is, it will convince Wall Street that IDC has finally arrived, that the pipeline is full.
There are many favorable things coming together for IDC at this time. You know what they are already, or shall I say you have heard many of these favorable things discussed. To "know" implies an intimate understanding, which you apparently don't have. The most significant recent development for IDC, and the primary reason why I invest in this company, has little or nothing to do with 3G. If I told you that IDC invented digital TDMA for cellular telecommunications, and have strong patents issued in virtually every developed country capable of defending this fact, and that the TDMA method of transmission is the predominant transmission method world wide, you would probably respond as would most Wall Street observers: "So what if they have TDMA patents, CDMA patents, even W and B-CDMA patents. Doesn't everybody? If IDC invented digital TDMA for cellular phones, why can't they collect on it, or defend it.?".
I would be willing to walk you through the first patent ever issued on digital TDMA, which is owned by IDC. Better yet, I can direct you to an earlier post wherein I did just that. I could also explain to you how that the favorable ReExamination of several of their core patents on this technology practically assures them a victory in the Ericsson trial - barring another miscarriage of justice - and the long anticipated recovery of years of back royalties, together with the requisite royalty renewal contracts that will most certainly be required at least until 3G has been fully implemented, and TDMA methods of communications cease. Unfortunately for you, this would require introducing you to a very basic understanding of patents, which you have convinced yourself incapable of receiving as categorically as you have insinuated that others, who are not patent attorneys, are likewise incapable.
Thus, we finally arrive at the conclusion. You see, this isn't your ordinary "selective... presentat[ion] [of] the facts, representing opinions as facts and avoiding meaningful dialog". I want dialog. And I want it from you. This post is a calculated challenge to your thesis, if you will, that: "naive investors would invest [in IDC] before they [sic] fully aware of the difference [sic] between fact or fiction and opinion or hype", and a proof for my thesis that: "Your arguments supporting the view that investing in IDC is speculative at best are sound, but, on the other hand, display ignorance".
Accordingly, kindly identify: (1) your sources for your apparent contention that those other than patent attorneys are incapable of acquiring sufficient knowledge of patents so as to make intelligent decisions regarding the relative strengths of companies; (2) your information source that enabled you to characterize Qualcomm as the "gorilla", thus implying that their technology is more widespread than IDC's; (3) which opinions Darrell Smith and Jim Lurgio have proffered as facts; (4) the names of any two patent attorneys that disagree on any aspect of patent law, and the aspect of patent law they disagree on (5) one Qualcomm board post that: "advised that patent law was too specialized to gain much meaningful insight from the patents themselves unless one is a patent attorney and understands the technology". (This fifth request may, on the surface, may sound the same as the first, but, if you read them carefully, you will see they are not.).
And finally, answer this one question for me. If there were a revenue-generating company in the wireless telecom sector having its technology deployed in nearly 85 percent of the world - any company - whose past performance were such that its stock price gives the company a P/E in the 30's, and if this company were recently enabled to more easily exercise its rights on the use of its technology, and if this company were able to realize only one-half of the revenue of Qualcomm - whose competing technology is deployed in only about 15 percent of the world - its stock value could, by comparison, increase 7-fold, would you say that investing in this company would be speculative at best? Furthermore, if the ITU established formats that excluded IDC's technology entirely, and if the ASCI system-on-a chip never developed, and if IDC's relationship with Nokia failed, baring no fruit, and if all of IDC's engineers suddenly quit, and if the temporary CEO quit, as well - or worse, remained in power - can you see any reason why IDC should not still be able to realize the revenue stream possible in the preceding question?
Looking forward to a meaningful dialog,
Renntech |
