11/06/2016

Net Cash Protection with Significant Upside Opportunity: Pendrell Corp


Pendrell Corporation (PCO) founded in 1995 acquires and develops businesses with technologies protected by intellectual property rights. Over the past five years Pendrell acquired IP rights and continue to monetize these IP assets. During the first half of 2016 Pendrell entered licensing agreements with DirecTV and Toshiba. This agreement permitted use of Pendrell's IP for the development, manufacturing and distribution of their products. These licenses and future negotiations with other possible licensees provide important cash flow for Pendrell's next business venture. Before its current commercial focus, Pendrell operated as ICO Global Communications building satellite networks, providing voice and data communications services.

ICO's declared bankruptcy after it first satellite was destroyed in 2000. Craig McCaw Pendrell's executive chairman since 2014 acquired ICO in bankruptcy.Furthermore, McCaw founded Clearwire in 2003 and sold to Sprint in 2013. McCaw was a Nextel director and XO CEO from July 1995 until December 2003. From 1974 to September 1994, Mr. McCaw served as Chairman/CEO of McCaw Cellular Communications. He built this company into the leading provider of cellular services in more than 100 U.S. cities until the sale to ATT in August 1994.

Besides Pendrell's ongoing IP monetization Pendrell continues to search and analyze new business opportunities that offer reliable cash flow and growth. The cash flow from existing licenses further assisted by the recent materially reduced overhead costs allow management time and precision to evaluate opportunities. A 1-for-10 reverse stock split was executed on September 30, 2016 to stay NASDAQ compliant

I'm NOT near an expert on their hundreds of owned patented technology and its future value from legal judgments. But I can say this. PCO is an asset cheap deep value stock owned by capable asset allocating executives with a large equity interest in the company ("skin in the game").

Ownership: Insiders own 24.40% or 5,353,057 class A common stocks and 82.7% or 14,786,666 shares of the class B common stock for a combined voting control of 65.7%. Craig McCaw (Chairman of the  Board) owns 21% of the class A common stocks and 82.7% of the class B common stock for a combined voting influence of 65.1%. Note McCaw is the sole shareholder of Eagle River, Pendrell largest shareholder. Highland Capital (James Dondero) owns 24.60% of the class A common stock. Mente LLC control less than 1% of class A stock , 191,208 shares and 17.3% of class B.


Notable Pendrell leadership with its largest shareholder and Chairman of the Board, Craig McCaw. McCaw is a pioneer in the cellular phone industry founder of McCaw Cellular that’s now part of ATT Mobility and Clearwire Corporation. http://bit.ly/2f7KxgB

The large drop in shorts as a percentage of float is a positive , 4.89% on 06/15/16 to 0.30% on 11/14/16.

PCO price on 11/04/16 was $6.55 with no long term debt and $6.79 in cash per share! See the valuation measures below per Yahoo finance, TTM free cash flow positive, book value 7.93, 52 change is -10.40%.

These investors know far more on Pendrell Corporation, so it would be useful to read their work.
Uncle Jack Investments http://bit.ly/2ftURhr   and Austin Newsom at SeekingAlpha http://bit.ly/2eMRXCY   http://bit.ly/2fvMctf



Long PCO















Original post on PCO 07/04/16 Micro Cap Discovery. http://bit.ly/2afVG9Z
The price on post date $0.51 or $5.10 after the 10 for 1 reverse split.

PCO trades below net cash. Current market price is $.51 per share versus .63 in net cash. Negative enterprise value of 30.36M per Yahoo finance, NOLs over 2 billion, valuable patents, PCO lost 2012 suit against Apple, filed appeal. No pensions or debt with head count reduced to 13 from 73 in 2013. Executive chairman Craig McCaw is worth 2 billion.








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