Motions, motions and more motions. Anything new show up on PACER (Public Access to Court Electronic Records) yet? Most Vringo (VRNG) longs have heard and asked about this a million times. But can you blame them? Millions and billions of dollars are at stake in the patent infringement case of Vringo vs. Google (GOOG), AOL (AOL), Target (TGT), Gannett (GCI) and IAC/InterActive (IACI).
With so much talk about Vringo lately, I decided to put together a list to show you why I'm bullish about VRNG and consider it a strong buy. This will hopefully sort out the truth from the all the lies that are out there. Hopefully this helps everyone out, especially those sitting on the fence debating about whether or not to start a position in VRNG.
The VRNG Facts
Last quarter institutional purchases in VRNG are up over 262%.
Watching what big money is buying is almost always a good indicator for longs. With a number of teams and analysts at their disposal, as well as access to market and corporate data, they are able to perform in-depth analyses to decide where they can maximize their profits. Does this guarantee that they will make money? No. But it does greatly enhance the probability that they will book profits and put themselves in a better position than most retail investors can imagine.
If the institutional investors are buying a stock, that is an endorsement of sorts that the stock has good prospects. If they are selling, it could mean something is wrong. The fact that institutional investors are buying shares and building their positions points to the fact that Vringo has evolved from a speculative patent litigation play and into a solid institutional-ready investment.
Before institutional investors get involved and risk their clients' money, they need to be sure that investment risks are mitigated and Vringo seemingly now meets that criterion. This is great news for owners of Vringo and for those looking to start or add to their position.
Vringo issued a $45 million secondary offering @ $4.35.
Heading into the trial against Google, Vringo had around $10 million in cash. Vringo knew that Google would drag out the trial (which we can all see now) and so they needed to raise more cash in order to show Google that they could fight to the end. By having a secondary offering, Vringo raised over $45 million dollars. This showed Google that they would not be able to drag out the trail in hopes Vringo would run out of cash. Vringo was locked and loaded.
Last quarter Vringo strengthened its balance sheet with over 60 million in cash and zero debt.
Since last year Vringo has had a remarkable run. With a recently completed merger with Innovate/Protect they are now debt free and have over 60 million in cash. Not bad for a company that had only a couple million dollars in cash and in debt. Then last summer they acquired over five hundred patents and patent applications from Nokia (NOK) in relation to its telecom infrastructure.
Vringo issues stock trading plans: $4.25 - $30.00
Last summer Vringo issued a stock trading plan for its insiders. Although it was a trading plan for insiders to sell their shares, it was interesting to note they said they would sell their shares between the prices of $4.25 - $30.00. Remember insiders have access to every bit of company information that you could ever want. I interrupt this as a positive sign for longs, as insiders believe their stock will be trading within that range. With a closing price of $2.87 on Monday, that means the closing price is around a 50% discount from the minimum selling price that insiders can sell at and over 1,000% from the maximum selling price. Risk vs. reward. At these depressed levels it seems like a whole lot more reward than risk to me.
The 8-K Form...
The trading plans are designed to align the interests of directors and officers with the company's investors by allowing them to monetize a portion of their equity positions when the market prices of the company's common stock are between $4.25 and $30.00 per share...
Vringo requests 7% royalties from post-judgment (motions) Google.
Because Google has been playing games (delay after delay) Vringo decided to play hard ball and requested 7% in royalties... that is twice the amount 3.5% in royalties that had been given to them by the court. It will be interesting to see what the judge rules on coming up shortly.
Vringo updates ZTE case... (Moving quickly)
Andrew Perlman, Chief Executive Officer at Vringo said, "We are pleased to see our case in Germany moving along quickly as we anticipated. We are confident in the foundational nature of our Telecom Infrastructure patent portfolio and intend to pursue additional enforcement actions when infringing companies choose not to take a license." ZTE now has until January to file a reply to Vringo's complaint.
Quinn Emanuel loses another case.
Lawyer firm Quinn Emanuel first lost a landmark case against Apple (AAPL) when they represented Samsung. Samsung was ordered to pay over a billion dollars in damages. Then just recently they lost in the Marvell (MRVL) case in which Marvell was ordered to pay over a billion dollars in damages to Carnegie Mellon University. Is it just me or does anyone else see a billion dollar pattern here?
Vringo has already beaten Google!
Last but not least we all must remember that Vringo has already beaten Google. Vringo has already won! The jury found that Google infringed and awarded Vringo the victory. The only outcome left now is to determine how much the Vringo victory is worth.
Disclosure: I am long VRNG.