Fund Trims Stake in High-Flying InterDigital After 80% Surge, Citing Portfolio Management
NEW YORK – In a move highlighting disciplined portfolio strategy, Capital Management Corp has taken some profits off the table in InterDigital, Inc. (NASDAQ: IDCC), a stock that has dramatically outperformed the broader market. A recent SEC filing revealed the fund sold 11,620 shares in the fourth quarter, a transaction valued at approximately $4.11 million.
The sale reduced the fund's position to 116,575 shares, now worth $37.12 million. Despite the trim, InterDigital remains the fund's single largest U.S. equity holding, accounting for 6.08% of its reported assets. The decision follows a remarkable run for InterDigital, whose shares have soared nearly 80% over the past twelve months, starkly contrasting with the S&P 500's 15% gain.
InterDigital, a pioneer in wireless communications and video technology, operates a high-margin business model built on licensing its extensive patent portfolio to global device manufacturers. The company's technology is foundational to 5G, Wi-Fi, and video compression standards, ensuring its continued relevance.
"This is classic portfolio hygiene," said Michael Thorne, a portfolio manager at Veritas Advisors. "When a holding appreciates this rapidly, its weight can become disproportionate. Trimming to manage concentration risk is a sign of a mature strategy, not an indictment of the company's prospects. InterDigital's fundamentals, particularly in AI and recurring revenue, look stronger than ever."
The company's recent financials support this view. Third-quarter revenue reached $164.7 million, with net income nearly doubling year-over-year to $67.5 million. CEO Liren Chen highlighted a record annualized recurring revenue of $588 million and new licensing agreements, underscoring the scalable nature of its IP business.
However, not all observers view the move as neutrally. "It's a telling signal," remarked Sarah Chen, a sharp-tongued analyst at The Benchmark Report. "Even the bulls are getting skittish after this parabolic rise. They're locking in gains because they know sustaining this momentum is improbable. It's a smart exit, not 'housekeeping.'"
In contrast, David Park, a technology investor, saw it as a non-event for long-term holders. "The core thesis is intact—InterDigital gets paid as 5G rolls out and video traffic grows. This sale is a blip. The fund still has a massive, conviction-sized stake. They're just banking some wins from an exceptional year to deploy elsewhere."
Ultimately, the transaction reflects the balancing act fund managers face with top performers: allowing winners to run while preventing any single position from dominating the portfolio's risk profile. With InterDigital deeply embedded in the evolution of connectivity, the market will watch closely to see if this profit-taking is an isolated event or the start of a broader trend.