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Parkervision Inc. (PRKR) Ready To Party Like It Is 1999?

 February 28, 2013 09:34 AM
 


(By Rich Bieglmeier) Parkervision Inc. (PRKR) traded up 33 cents or 9.02% on Wednesday, February 27, 2013. The nearly double digit percent move was accompanied by almost twice the average daily volume for the semiconductor company.

PRKR first came to iStock's attention when it appeared as the fifth most accumulated stock for the week of February 19 – 22 (Monday was Presidents' Day). Last week, Wall Street amassed more than $9 million of Parkervision or 2.74% of the company's market-cap.

Enthusiasm for the small-cap tech stock was driven by a United States District Court for the Middle District of Florida's "Markman Order," favoring PRKR in a patent infringement case against QUALCOMM Incorporated (QCOM). According to Wikipedia, "A Markman hearing is a pretrial hearing in a U.S. District Court during which a judge examines evidence from all parties on the appropriate meanings of relevant key words used in a patent claim, when patent infringement is alleged.

[Related -QUALCOMM, Inc. (NASDAQ:QCOM): Becoming A Core Holding?]

Markman hearings are important, since the court determines patent infringement cases by the interpretation of claims. A Markman hearing may encourage settlement, since the judge's claim construction finding can indicate a likely outcome for the patent infringement case as a whole."

OK – enough with the legal mumbo-jumbo.

On July, 20, 2011, Parker filed suit alleging that QCOM has "utilized and continues to utilize devices, systems, or methods that infringe directly, by inducement, and/or contributory, one or more claims of the Patients-in-suit."

[Related -QUALCOMM, Inc. (QCOM): Did Goldman Lowball With $80 Price-Target?]

In 1999, the two companies were in negotiations for QCOM to license Parker's technology; however, they could not agree on terms. But, "In these negotiations, Qualcomm offered a royalty structure that Qualcomm projected would total $636-$678 million in 1999 present value," according to Exhibit B in court document 102.

Now, it's time for a little math. PRKR had 82,862,796 shares issued and outstanding at September 30, 2012, so says the latest 10Q. Using the mid-point of the figures tossed around in 1999's negotiations (can't help but think of Prince or whatever his name is now) - $657 million – it works out to $7.93 per share – 98.7% higher than where Parker closed on February 27, 2012.

Parker hasn't named an "official price," but a $1 in 1999 would be worth approximately $1.08 today, putting range at $686 million to $732 million or $8.28 to $8.83 per share. And, in one of many documents iStock read in regard to this case, Parker's legal team makes mention of "potentially billions" of dollars in lost revenue.

According to court records, the mediation deadline is May 6, 2013. The Final Pretrial Conference is scheduled for September 19, 2013 at 1:15 p.m. EST and the Trial Term Begins on October 7, 2013 at 9:00 a.m. EST and is expected to last 10-20 days.

Overall: Parkervision Inc. (PRKR) is a speculative play for investors who can absorb volatility and the potential for big losses. In exchange for the enhanced risk, a positive legal ruling could push PRKR's share price to 1.5-3X the cash value of a settlement, based on experience with previous infringement cases.
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