Investors balk at Wi-LAN’s new plan for growth

Shares of Wi-LAN (TSX:WIN) are off this morning on heavier than normal volume, a day after the company released a new plan resulting from a strategic internal review.

After collaborating with advisor Canaccord Genuity, the company said it would focus less on acquiring patent portfolios and more on partnering with companies looking to maximize the value of theirs.

“We entered into the strategic review process highly confident in the strength of our stand-alone business,” said Wi-LAN board chairman, Paul McCarten. “After conducting a comprehensive review of a wide range of strategic options in collaboration with our financial adviser, Canaccord Genuity, we have concluded that shareholders are best served by modifying the company’s business strategy to address current market dynamics. In our view, continuing with an updated strategy is the best way to maximize shareholder value.”

Wi-LAN says it will shift its look to augment is business by focusing on new markets, look to ensure that law firms it works with share the risk in its licensing programs and consider selling some of its “non-core” patents. By doing this, Wi-LAN says it hopes to double its revenue and increase it earnings by a minimum of 30 cents by 2018. The company says it plans to distribute this extra cash to shareholders in the form of a dividend it hopes to increase regularly.

“….successful companies do not stand still but embrace change,” added Skippen.

At press time, shares of Wi-LAN were down 7.6% to $3.28.

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