There are less than two months left until Vringo (NYSE:
) and Google (NASDAQ:
) go head-to-head in court. Once a forgotten penny stock stuck in
application development operations, Vringo has emerged as a $200
million company largely due to its lawsuit threats against Google
and other search engines like AOL (NYSE:
On October 16, 2012, Vringo will finally reach a
long-anticipated legal hearing when it will try to convince the
court that Google has infringed upon its patented search technology
of dollars." The trial will take place in the Eastern District
Court of Norfolk, Virginia.
Many Vringo invesors are hoping for a quick, out-of-court
settlement, including James Altucher, managing director of Formula
Capital. Altucher famously penned his
on the Vringo-Google lawsuit on March 31, sparking a 200% rally in
shares of the otherwise forgotten patent troll. Since his article,
Vringo has oscillated between $3-4 per share, with Altucher
explaining that he
continues to hold his shares
in anticipation of a large settlement from Google.
On August 6, AOL
with Vringo's I/P Engine in the same court. The settlement noted,
"On this day, I/P Engine, Inc. and AOL Inc. announced to the Court
that they have settled I/P Engine's claims against AOL relating to
AOL's Advertising.com Sponsored Listings." The final dollar amount
of this AOL settlement has not been disclosed.
How much money is at stake in the Vringo-Google lawsuit? Fans of
Vringo note that if Vringo prevails against Google at a 1% royalty
rate for its technology, Vringo would receive
for past damages. Additional payments are also possible, as
Vringo's patents extend until 2016, and other companies have
allegedly infringed on Vringo's technology. Optimistic speculators
have cited possible share prices for Vringo in excess of
$30 per share
versus the current $3-4 range.
Skeptics, however, note that Vringo has already rallied over
200% in 2012 and trades at a significant premium to current
revenues. Any failure of Vringo to monetize its patents would
dramatically reduce speculative share prices. Skeptics also point
to a dilutive financing at $3.25 per share
on August 9 (a few days after the AOL settlement) as a sign of
Vringo's low concern for its shareholders.
It is worth noting that David Cohen has been helping Vringo with
intellectual property since March 2012. An experienced money
manager, Cohen also helped Nokia (NYSE:
) receive hundreds of millions in lawsuit payments from Apple
). Cohen's role at Nokia, like his current role with Vringo, was to
help monetize intellectual property.
a large patent portfolio from Nokia for $22 million plus royalties.
Vringo hopes that Cohen's familiarity with this portfolio will help
him to expedite its monetization. Critics, however, point to
in monetizing this portfolio while it was in its possession for
The trial is scheduled to commence on October 16, 2012 at
10:00am ET in Norfolk, Virginia. The civil action case number for
the lawsuit is 2:11cv512.
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