Sorry, InterDigital -- You Missed the Starting Gun

Updated

I'm afraid InterDigital (NAS: IDCC) missed the magic moment.

Shares of the technology license wrangler were set to open about 17% lower this morning. The company just told investors that its strategic review failed to scare up any buyers of its wireless patents over the past six months.

So there won't be a sudden gold rush; it's back to business as usual. Chairman Terry Clontz manages to put a positive spin on the failed sale, because it "helped to reaffirm our belief in the breadth and depth of the patent portfolio, the strength of the R&D team, and our technology vision for the future."

It's his job to stay positive, of course. The reality is a bit grimmer: The real gold-rush days of patent sales are now firmly behind us, and InterDigital missed the starting gun.

InterDigital's sudden lack of buyout value isn't spreading very far across the sector today. Fellow wireless-patent manager VirnetX (ASE: VHC) is holding, and that's arguably the closest comparable stock on the market. The stock did plunge 6.5% in the Monday session on very spiky volume, though.

That action couldn't possibly be a response to InterDigital's news, which wasn't published until after market close. Rather, it looked like a reaction to handset maker Research In Motion's (NAS: RIMM) reaffirmation of its strategy under new-ish management. A real shakeup at RIM could have kicked off yet another patent-sale bonanza across the mobile sector, but it's not happening anymore.

Oh what a tangled web we weave. The wireless industry is a hot mess of deeply felt rivalries, free-flying lawsuits, and volatile patent portfolios. If main players Google and Apple ever settle their differences -- in or out of court -- the technology side of the mobile game might become hunting grounds for long-term investors again. Right now, it's a day-trading paradise, with more volatility than sanity. InterDigital is a Stock Advisor recommendation, but that vote of confidence was cast way back in 2006, before iPhones and Androids and all this unpredictable craziness.

The best way to invest in mobile technology today does not go through the pure technologists, but rather the companies that actually make stuff.

At the time thisarticle was published Fool contributorAnders Bylundowns shares of Google but holds no other position in any of the companies mentioned. The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Google, InterDigital, and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. We have adisclosure policy.

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