An InterDigital Dilemma: Intellectual Property Analysis of InterDigital Inc.
The other night in Charlottesville there was a gathering at the Pavilion on the Downtown Mall. However, this night it was not motivated by entertainment – at least not of the cool, beer-swilling, groovy tune type. Its inspiration was the movement that has been growing around the country in the last few weeks. This group was congregating as an extension of the Occupy Wall Street protests. Are the OWS protests targeting companies who are not employing people, investors who are encouraging exaggerated returns, both, neither? As these people are drawn to activism to protest against a complex financial system that rewards insiders, we could not help but think about Wall Street insiders known for their scathing letters that criticize the executives (or sometimes, in their words, clowns) of companies in their investment portfolios. Having seen everyone piling on, we’re intrigued by the number of activists who only consider one side of a business complexity while they ignore enormous risks in their own behavior.
Recently, many Wall Street insiders have been taking a position in InterDigital (Nasdaq: IDCC). And why not, with the recent $4.5 billion acquisition of the Nortel patent portfolio and Google’s purchase of Motorola Mobility for $12.5 billion? InterDigital has put out a “For Sale” sign for its patent portfolio and may be looking for a payday of well over its $2.2 billion market cap. These sentiments are fading as InterDigital’s stock has recently dipped (notwithstanding the past two day anomaly).
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