Seeking Alpha
Healthcare, tech, patents, litigation
Profile| Send Message|
( followers)  

Several months ago I speculated that ParkerVision (NASDAQ:PRKR) was being shopped around by a well known Silicon Valley law firm for possible sale to a tech heavyweight. Assuming I was right, which is definitely debatable, I now believe it's highly unlikely the company will be acquired and thus there is no longer any justification for including a meaningful premium in the company's valuation for potential buy-out. As such, I have sold my shares. There are several reasons I have come to this conclusion.

First, like brokers selling houses, attorneys being asked to shop around companies for potential acquisition expect exclusivity and I would be quite surprised if the Silicon Valley law firm retained by ParkerVision was not given some reasonable period of time during which the company would not independently pursue potential acquisitions or enter into any material sales or licenses of its patents, as those transactions could greatly affect the value of the company. A four to six month exclusivity and stand-still on material transactions seems fair and typical. The ParkerVision press release announcing the hiring of Wilson Sonsini was issued July 31, so it has been just about five months since then as of this writing. That means we're towards the end of the window of time I would expect to have been part of the arrangement with Mr. Sonsini and his firm.

Second, ParkerVision last month issued a press release announcing that they have retained 3LP Advisors, a patent monetezation consulting firm headed by Kevin Rivette, the former IBM patent licensing executive who co-penned Rembrandts in the Attic, one of the seminal books about monetization of patents. The hiring of 3LP signals to me ParkerVision has turned its focus away from potential acquisition to monetizing its patents through portfolio sales and/or licensing. This indicates that the company is attempting to wring value out of patents that it does not intend to exploit itself. At minimum, it signals there is no longer any exclusivity with the Wilson Sonsini firm and its efforts to broker a sale of the company.

I was disappointed that ParkerVision could not produce anything material from the Wilson Sonsini relationship. I hope they are able to do better with the 3LP arrangement. If not, the company's valuation will likely continue to ride almost exclusively on its current patent infringement lawsuit against Qualcomm (NASDAQ:QCOM), in which the parties are still waiting for a Markman decision from the Court, a decision that was expected in October. Such would make the company's valuation subject to the judicial process, which can be highly volatile.

Source: ParkerVision Unlikely To Be Bought