Expect Good News from Tessera

The Federal Circuit just denied the stay requested by Qualcomm (QCOM), Freescale (FSL), Spansion (SPSN), ST Micro (STM) and ATI. The Limited Exclusion Order and the Cease and Desist orders of the International Trade Commission are now in effect, and the parties will not be allowed to import their infringing products into the US. Since this is a Limited Exclusion Order instead of a General Exclusion Order, products that are used to make end products are not subject to this order (these downstream products are still allowed in the US). However, we are starting to see the effect of companies who are losing business because of the LEO and the Cease and Desist order. Here is one article that explains the pain some customers are facing.

Tessera (TSRA) has just announced that they will be ringing the bell to open the NASDAQ and that they will have an Analyst Day on September 17th. Frequently companies will schedule these Analyst Days when they have some significant to tell the markets. Since this event had to have been scheduled before the Federal Circuit made a favorable ruling on the stay, I suspect they may have some more good news. They may have an announcement of new licensees for their uPILR or Ionic Cooling technologies. Or, they may have an announcement on a new licensee for their wafer level camera modules and optics IP. But what could really get the stock moving would be a settlement with one of the parties in the wireless ITC action (Qualcomm, ST Micro, Freescale, Spansion, and ATI). Now that the stay has been denied, the Cease and Desist orders and the Limited Exclusion Orders will be having major impacts on these companies. Every day that goes by without being able to ship key parts within the US is hurting revenues and alienating their customers.

I think we will get some good news on September 17th (if not before). Just how good that news will be is yet to be determined. Stay tuned and watch the stock price.

Disclosure: Long TSRA

Comments

[semi-guru:]

Or there will be no news. Or they could announce a secondary offering that ultimately dilutes shareholder value. No way of knowing anything, since they've done this before without any major news. Sometimes its just for PR.

You make reasonable points but your analysis is completely one-sided and does not consider alternative business strategies. Qualcomm manufactures at Amkor. Or they could manufacture end product overseas and avoid the LEO/CDO entirely. Your article is 2 months old, and a lot changes in two months. ST Micro, Freescale, Spansion, and ATI are ALL wildcards at best.

So the premise of your article is "I think we will get some good news on September 17th?"

Sep 12 01:54 AM