Hey, buddy, have you heard the one about the efficient market theory? Yeah, it seems that the stock market instantly absorbs all news, and reacts immediately to find the appropriate stock price for the companies the news affects. Har!

To proponents of the efficient market theory, I proffer as rebuttal evidence the example of Motley Fool Stock Advisor selection InterDigitalCommunications (NASDAQ:IDCC), a little Pennsylvanian IP shop that helps make your cell phones go "ring." On Tuesday after close of trading, the company released its revenue guidance for the fourth quarter. On Wednesday, when the market reopened, the stock fell 7%. On Thursday it got nearly half that loss back; and Friday, rose yet again. Now tell me: Which of those prices, on which of those days, was the "appropriate" one in response to the news?

Guidance delayed is guidance denied?
In its third-quarter earnings release last month, management declined to give precise revenue guidance, promising instead to provide this "following the receipt and review of applicable royalty reports." Lacking a company-provided cheat sheet, Wall Street just guessed: $105.6 million. So imagine the shock when InterDigital finally confirmed last week that it thinks the real number will be closer to $63 million (with the possibility of additional revenues from "new agreements that may be signed during the quarter, or additional royalties").

Note that caveat, by the way, because it's important. Commenting on our Stock Advisor discussion boards, Fool member idccjoe advised that: "The nature of [InterDigital's] income from IP means that there will be quarterly variances which will result in these spikes, both up and down. IDCC's performance must be measured over years, not quarters."

"New agreements" and "additional royalties," if they appear this quarter, would yield a revenue spike up. If they don't, then a spike down. In contrast to those spikes, my Foolish colleague Thomas Engle (TMF1000) chooses to focus on the firm's recurring revenues from royalties paid by existing licensees. In another comment on our boards, he points out that "patent license royalties from existing licenses will come in between $48 million and $48.5 million. Last year, the fourth quarter produced only $36.2 million in recurring royalty revenue. Even if they come in at the low end of guidance the company will have grown this important source of revenue over 32%. So, they are starting to accumulate a reliable source of revenue."

So really, depending on how you choose to look at the company -- one with lumpy revenues or one with a growing, recurring business underlying those lumps -- last week's announcement qualifies at worst as "no news," and at best as "good news." The only wrong way to look at this, it seems to me, is the view Wall Street is taking: that failure to hit an arbitrary number dreamed up by analysts, and unendorsed by the company, is a bad thing.

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Fool contributor Rich Smith does not own shares of any company named above.