InterDigital Taps Into Buyback Buzz, Gains Most This Year

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InterDigital Inc. gained the most since October after the U.S. wireless technology company boosted the size of its stock repurchase program by $100 million.

InterDigital on Thursday said it will increase its total buyback authorization to $400 million, joining a wave of U.S. companies that are repurchasing shares at record levels this year.

The Wilmington, Delaware-based company “has bought back roughly half the shares of the company that were ever outstanding,” S. Douglas Hutcheson, chairman of InterDigital, said in a statement. “Our decision to continue in this direction underscores the company’s confidence in future cash flows and the continued strength of the business.”

U.S. corporate buyback plans are on pace to reach $1.1 trillion, above the peak of $863 billion in repurchase announcements in 2007, according to data compiled by Rob Leiphart at Birinyi Associates.

InterDigital also said on Wednesday it reached an agreement with Arima Communications Corp. to maintain the existing patent license agreement between the two companies and resolve all pending payment disputes. As a result, InterDigital expects to recognize between $25 million and $30 million of past sales revenue related to the settlement, a company release said.

InterDigital owns more than 1,700 U.S. patents and thousands more in other parts of the world, all related to its research in digital wireless technology.

“While we continue to be impressed by IDCC’s success, we see shares as pricing in the majority of potential upside drivers at this time,” Darrin Peller, an analyst at Barclays Plc, wrote in a client note on Thursday.

InterDigital added 5.9 percent, or $3.31, to $59.65 at 4 p.m. in New York. That’s the biggest single-day increase since Oct. 30. The company has jumped 13 percent in 2015.

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