Interdigital - Be Consistent

Saturday, March 1, 2008

Interdigital announced its Q4 2007 and its annual financial results yesterday. Its net loss was reported at $1.98 million or $0.04 per share compared to net income of $20.26 million or $0.37 per share in Q4 2006. Pro Forma net income for the quarter was $3.09 million, or $0.06 per share. Below analyst estimates, this announcement was greeted with a 6% share price fall.

I am not completely surprised by this turn of events just a few days after I valued it at $75 on Sramana Mitra's site. The reason: Lack of consistency. Or like my friend would say, they are "consistently inconsistent."

A reader asked me why the Street did not think the same way I did about the company despite its great story. And one of the key reasons I stated was its inconsistency. You can read the rest of my reply here.

All said and done, I reiterate that the royalties are there to be collected. So, the money will come although not completely as a recurring revenue. So, while the market panics, there will be a few who will collect shares for cheap. They know that when this money comes, the same market will scamper to lay their hands on this stock. That is when $17.50 will look real cheap. But for those who want to make some quicker fortunes from this stock, ask William Merritt and his team to BE CONSISTENTLY CONSISTENT.

Posted by Vijay Nagarajan at 9:00 PM  


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