Olddog re Carpenter's reason for downgrading
It appears that Tom is now in the PJ camp re new 3G licenses, ie there may be a prolonged delay primarily due to the Qualcomm/Nokia 3G royalty rate battle. IDCC's management could have used this excuse in the August second quarter earnings CC. This CC occurred after the announcement of the Qualcomm/Nokia dispute and after the PJ downgrade report re a possible prolonged delay in new licenses by IDCC. However, IDCC's top management did take opt for the easy way out, but reiterated that they expected to get new 3G licenses before the year is out as follows from the August 2 Conference Call:
..."The financial strength of the company remains driven by the patent licensing program. On that front we continue to have an active dialog with a large number of manufacturers of all sizes in all parts of the world. We have also reinitiated our efforts in China, now that the expected deployment of PDSDMA in the near term looks to be a reality. Our discussions with licensees are taking place in a typical manner, with topics ranging from technical due diligence to financial terms. I'm happy with the progress that the InterDigital licensing team is making on these new deals. And while it is difficult to predict a precise timing of any new deal, we believe that we can close additional patent agreements this year."
Why would Merritt stick his neck out like that, unless he was very confident that IDCC would deliver on its repeated stated goal of new 3G licenses this year? Also notice the plural use of the phrase additional patent agreements. I suppose we have to choose whether to believe a couple of IDCC's analysts, or whether we choose to believe CEO Merritt on this issue. I have less confidence in Merritt following the last wave of discretionary insider selling, however I do think he will deliver on the new licenses. The consequences might be severe if he doesn't deliver.
