) and Nokia (NYSE:
) have announced they have entered into a patent agreement.
Vringo is a provider of software platforms for mobile social and
video applications. Rumors have been circulating since March that
Vringo was "patent trolling" and it has indeed hooked a 500 patent
and patent application portfolio from Nokia.
Among the patent portfolios included in the agreement is a wide
spectrum of cellular infrastructure software plus third and fourth
generation wireless technologies. At first look it appears Nokia
was losing tremendous value but a large portion of the patents were
granted in late 1990s and early 2000s. The patents according to a
Wall Street Journal report
have a lifespan on average of 6.7 years
Vringo has basically flown below the radar of most major
, which initiated coverage with a Buy rating and $6.50 price target
on August 7.
The stock has been a daytrader's dream with daily average volume
around 3.17 million shares, almost 10 percent of the stock float.
In early trading Vringo shares were up eight percent before trading
down six percent on heavy volume. Volume as of 12:00 PM EST has
surged to almost 5 million shares and will surely double the daily
average by the close.
Today's extreme volatility can possibly be attributed to
that the company has entered into a subscription agreement to sell
an additional 9.6 million shares of common stock for $3.25 per
share. Of the $31.25 million raised, 90 percent will have come from
three institutional investors. Vringo conducted the offering
directly to the investors and used an underwriter.
The ringtone specialist shares have been on quite a roll of
late, trading up over 56 cents (17 percent) a share from July 31
and have blown through its 50 day moving average before Thursday's
announcements. In fact, the shares have quadrupled this year and
have caught the eye of tech investor and owner of the Dallas
Mavericks Mark Cuban.
Back on July 19, Vringo completed its merger with
Innovate/Protect, an intellectual property software company. The
firm had filed suit against AOL (NYSE:
), Google (NASDAQ:
), IAC/Interactive (NASDAQ: ), Gannet (NYSE: ) and Target (NYSE: )
over eight patents Vringo bought from Lycos in 2011.
AOL agreed to settle its patent dispute with Vringo, but no
details of the settlement were made public. However, a March
article on TechCrunch
that the Google patent infringement suit alone could net Vringo a
large portion of the $67 billion Google has earned since 2001 using
Ken Lang's patent (former owner of Innovative/Protect). The Motley
that the Maxim Group stated the AOL victory, "offers confirmation
that there is validity to the Vringo/Innovate/Protect search
There are many moving parts to Vringo, especially for a company
with a market cap of $119 million. If Google decides to settle for
10 percent of the patent suit it would add 50 percent to the value
of Vringo. This is a stock that seems to find itself always in the
headlines. Good, bad or indifferent, Vringo is worth keeping an eye
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