That's far short of selling the entire company to the highest bidder, but a significant step in the same direction. Merritt wants to take advantage of the pockets of industry interest that showed up in the process of actually looking for all-or-nothing buyers. Whether by direct sales or joint partnerships, InterDigital wants to extract some money from small batches of patents that don't add much to the top or bottom lines today.
The income statement could use a bit of a boost. GAAP earnings fell 36% year-over-year to $0.49 per diluted share on sales of $77 million, down from $95 million a year ago. Analysts were expecting worse, so the stock is surging today. Still, the company doesn't paint a very pretty picture here.
Making matters even worse, InterDigital burned $10.8 million of free cash in the quarter and a total of $65.3 million in fiscal year 2011. Patent licenses in the red-hot mobile market may sound like easy money, but InterDigital is showing us how tough it really is to make a living this way. The stock has lagged behind the Dow Jones Industrial Index
Investors in Qualcomm
Smartphones and tablets are building a trillion-dollar market before our very eyes, and InterDigital is desperately trying to find a foothold in that massive opportunity. Maybe the right strategy is behind another locked door, but it's hard to know until management pulls the handle. Investing in this revolution doesn't have to be difficult; some companies have already carved out their niches.