TESSERA TECHNOLOGIES VALUE OF IP FULL
TESSERA TECHNOLOGIES VALUE OF IP LICENSE
TESSERA TECHNOLOGIES VALUE OF IP FREE

My calculation resulted in $110MM profit per year then I choose to discount it by 20% considering: I used the same method to get an average profit for the last 4 years (2009, 2010, 20). I counted $200MM for the trailing year.Ī conservative 62% operating margin (the average is closer to 70%) and a 35% tax rate amounted to $80MM profit.

Revenues for the last nine months were $150MM. To assess the value of patents, I took an average after tax operating profit for IP segment. Tessera is deeply concerned because several customers are very significant (Powertech and Micron respectively 25 and 19% of revenues). In 2011, Tessera started to extend its major IP contracts (Samsung, Micron, Powertech, Hynix…). This leads to more than $500 MM in current assets.Ĭonsidering AMKOR final arbitration ($125 or 400MM), this leads to a $630 - 900MM range.

AMKOR arbitration (initial payment) : $20MM.

Accounts receivable, deferred taxes $20MM.

I add $20MM more.įinally, without considering AMKOR final arbitration, i add : I also count accounts receivable, deferred taxes (R&D) with a slight discount. At $17 / share, it means the business can be bought for only $5. This would lead to get around $12 by buying one single share. patents that the panel previously found to be royalty bearing.Ī more probable scenario would certainly be in a $20 - 125MM range. The panel also found that royalties are due on four foreign patents related to U.S. The panel found that no royalties are due to Tessera on seven of the ten asserted U.S. The $400MM scenario is highly improbable, because the panel did not took into account all the claim.Īmkor Announces Interim Ruling in Tessera Arbitration Richard Chernicoff, president of Tessera Intellectual Property CorpĪs previously announced, we intend to seek an amount in excess of $125 million in connection with the ICC's interim award. But Tessera expects to get at least $125MM, $2.5 per share.

TESSERA TECHNOLOGIES VALUE OF IP LICENSE

Tessera terminated Amkor's patent license agreement in 2011.

TESSERA TECHNOLOGIES VALUE OF IP FULL

Tessera accused AMKOR of failing to pay Tessera full royalties on products Amkor sold. Tessera and AMKOR had a patent license agreement. There's also a catalyst with AMKOR final arbitration. Tessera recently won a claim against Spansion, adding $24MM more or $0.5 per share. I think the risk of downside is quite limited: Tessera has $465MM in cash & equivalents, almost $9 per share. My valuation is based on an adjusted net assets value.Ĭash and equivalents, accounts receivable, deferred taxes If the spin-off does not occur by March 31, 2015, then the stock option will expire on such date.

If the stock option so vests, then the option will remain exercisable until March 31, 2016. The stock option will vest and become exercisable as to 100% of the shares subject thereto on the date of completion of a spin-off by the Company of a business segment More, the CEO is now incentivized, with a bunch 550,000 options ($14 exercise price) in case of spin-off until March 2015: It is clearly written in the last 10-K:įor example, in April 2011, we announced that we are exploring a possible separation of our DigitalOptics business. The management studies the possibilities of a spin-off of Digital Optics. DOC hence represents 20% of sales and an operating loss of $100MM in 2011. The market is expected to be important, but it is not accretive yet. DOC is finalizing a brand new camera module based on an MEMS autofocus actuator. Digital Optics (DOC), which provides camera modules for mobile devices.It represents 80% of sales and an average 70% operating margin. Intellectual Property (IP), which manages a portfolio of semiconductor patents (chips, memories, xFD…).Tessera Technologies is divided into two segments:

TESSERA TECHNOLOGIES VALUE OF IP FREE

I recently made a comment about my assumptions of valuation in Todd Johnson's article about Tessera Technologies (TSRA).įollowing a detailed analysis, I think Tessera is worth around $1400MM - $26/27 per share, including a free call option: Digital Optics Segment.

Tessera technologies value of ip