Cloud communications and computing solutions provider 8x8, Inc. (NASDAQ:EGHT) sold part of part of its patent portfolio to an undisclosed bidder. In a press release issued by the company, Chairman and CEO Bryan Martin stated, "We are pleased to report a significant success in monetizing a subset of the Company's portfolio of patents." EGHT's regulatory filing discloses that the company "sold a family of patents to a third party for $12.0 million plus a future payment of up to a maximum of $3.0 million based on future license agreements entered into by the third party purchaser."
EGHT's press release was published Wednesday, June 27th, before trading opened, and by the end of the trading day, the company's shares were only up $0.02 per share, or 0.48%, closing at $4.16. Trading volume was more than 15% below EGHT's average. The market currently values EGHT at slightly under $300 M, but the sale may value the patent portfolio at more than double that amount.
Information disclosed indicates EGHT "has assigned a family of its United States legacy patents," and that it holds more than 80 U.S. patents. Of course, holding 80 U.S. patents is not equivalent to having 80 patent families. International patent databases indicate fewer than 50 worldwide patent families for EGHT, suggesting that today's announcement transfers about 2% of the company's patent holdings.
If the announced sale is representative, then EGHT's sale of 2% of its IP for $12 M (plus potential for additional future revenue) values the total portfolio at more than $600 M, indicating that, on patent value alone, the company is currently significantly undervalued in the market.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.