RE:Todd - Upside Scenario C$5.00 Todd cut the downside scernario to a $1.
He cut his estimate of the ITS business by a $1.
He values ITS net of debt at $1.30-$1.50.
To believe $5 you need to believe that WiLan is sold for the same price that BlackBerry got, which was $600M. Net of fees and taxes you get a $5 stock price.
The problem with that is Blackberry sold 38,000 patents for $600 million. And Blackberry invented these patents. They were not acquired at a garage sale.
If you apply the BlackBerry per patent sale price, you get $70 million for the WiLan patents.
The problem with it is what Skippen said at the trial. Most of the patents are chaff. Or as the WiLan lawyer said at CAFC "Most of these patents are expired, near expiry or are implementation patents. You don't really need them. This is the crown jewel"
The problem is the "crown jewel" Patents Apple just signed for are all expired or are very near expiry. They have limited value. Canadian patents, which we have in abundance, are about as useless as they come.
So as RayJay surmises they got $40 million from Apple. Maybe they get $30 million for the rest. They don't have to pay Vladescu a $5 million severance package. And they avoid $10-15M in annual legal fees.
I get $1.80 at that scenario assuming $1.30 net of debt for ITS.
At $2.35 today you are at over $250 million pre tax, pre McKool Smith, Pre Samsung rebate for the WiLan sale /Apple deal combo which is 3X the per patent price that BlackBerry just sold for.
Anyone care to explain why the "chaff" is worth 3X more per patent than BlackBerry's patent horde?