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Wednesday, June 3, 2009

This smart company is making the big guns of wireless pay dearly!

Several mobile phonesImage via Wikipedia

Two weeks ago, I mentioned I ran across a recommendation by Greg Reid CFA, at Silicon Investor regarding Wi-Lan Technologies Inc. WIN-TSX


I mentioned that I had increased our holdings in Wi-Lan by a factor of 10. I did that in Early March and since that time (approx 90 days) we have made a paper profit of 33%.


Now 33% is a great rate of return over 3 years, let alone 3 months!


You might expect that I would sell that stock and solidify my returns, but you would be wrong.


You see, I have been following Wilan for years, since the time it was a manufacturer of high tech gear for the internet economy such as cdma, wireless lan, Docsis, dsl, wi-fi, wi-max, and the V-chip, among many others. Currently, Over 550 patents are now held by a WiLan Technologies .


I have owned the stock for about 9 years.


Now it is time to reap the rewards of that patience! You see, several years ago, the management/Board at Wilan realized that their true value lay in their intellectual property in the form of patents for many wireless functions which have since been adopted by such firms as: Research in Motion, Motorola, Intel, Apple, Infinion, D-link, Acer, Westel, Broadcom, Marvell, and Sony, and many other companies who use wireless technologies from Cell phones to laptops and smart phones.


The company replaced their "Tech Centric" CEO, with one of America's best ligation, patent lawyers, Jim Skippen, less than two years ago. An Entire team was then hired to ensure the leveraging of those patent assets. Since that time, Wi-Lan has signed licensing contracts with many high tech, high flyers, such as RIM, Motorola, Samsung, Westinghouse, Casio, TigerDirect, Infinion, etc, and is signing many more at a dizzying rate.

There are some holdouts such as Intel, Motorola (LG) etc, but they are in a Texas Court at this writing, trying to fight off the inevitable.


The bottom line is that, Many of the worlds tech and wireless companies, including the biggest, will be licensing Wi-Lan Technology for many years to come.


Although many investors are actually day traders, I subscribe to the "Buffett" theory that patience is a virtue.


I won't sell my stake in WiLan anytime soon for several reasons. First, many industry experts feel that Wilan (now trading in the $2 range) is at very least, a $10 stock. Some believe that $20-$25 is more in line with future growth as these patent licenses pay off month after month from here on in. Second, I will be very surprised if I don't get a return in the 1,000 % range, this year!


That is why I bought the stock 9 years ago!
That is why I increased my holdings 10 fold in March!
That is why I am going to "double down" on that bet sometime today!


Update June 11 - up 58% - Wilan trading at 2.45 today. bids 300% higher than asks.
As of April 30, the firm had signed 62 wireless and 112 V-chip licences with over 100 companies.

Article from the Ottawa Citizen Valuable Company

Update June 25th - Wilan Dips. Buying more! Will buy on the dips!


Other commentaries from other sites/sources about Wilan Technologies!

Business Week
GlobeInvestor
TeleClick
Wimax.com
Reuters



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