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Why InterDigital Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of wireless technology developer InterDigital (Nasdaq: IDCC  ) popped 12% on Wednesday after winning a favorable ruling in its lawsuit against Nokia (NYSE: NOK  ) over 3G patents.

So what: The U.S. Court of Appeals for the Federal Circuit overturned a previous U.S. International Trade Commission decision in Nokia's favor, resurrecting InterDigital's chances of getting Nokia to pay patent royalties on 3G mobile phone technology. InterDigital shares have been crushed in recent months on rapidly slowing growth, so the news comes as a much-needed boost to shareholders.

Now what: The appeals court said the ITC misconstrued two InterDigital patents and will now send the case back to the ITC for new proceedings. While the persistent trend of shrinking licensing revenues is worrisome, the new short-term catalyst, coupled with InterDigital's still very valuable patent portfolio, makes the stock a tempting turnaround play. With the shares still off considerably from their 52-week high, I wouldn't let today's pop keep me from looking into the opportunity.

Interested in more info on InterDigital? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 01, 2012, at 5:02 PM, bbbboyd wrote:

    Look's like the "Head Fool" missed it on this one also.You held on to them for this long, why bail now? I have had this stock for over 10 years and the last few years where absolutely disgraceful. It made me question Wall Street and all the other cronies that come along with them. IDCC has been fighting Nokia and others for patient infringement for years. I never understood how Nokia got away with this injustice for all these years. Hopefully the truth will prevail and IDCC gets billions for the lies and deception that Nokia and its team of lawyers (and JUDGE'S) that heard this case also get what is coming to them!

    I hope I made my point.


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10/24/2016 12:25 PM
IDCC $80.20 Up +0.60 +0.75%
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