Investing Background with Vringo
When we first met...
Before Facebook (FB) IPO'd in late May, I had been searching for ways on which to play the rising hype. Zynga (ZNGA) was a contender, as a considerable portion of FB's revenue was derived from ZNGA. SVVC was another pick. Firsthand Technology Value Fund (SVVC), owned a considerable amount of the social media giant and had been on my radar for a while. But I wanted something even more risky.
Soon enough I came face to face with Vringo (VRNG) after a late night researching smaller social media companies in February. VRNG was (and still is) a very small company and I thought it would be a great play on the upcoming FB IPO.
I first bought in at $1.21/share, planning to sell close to FB's IPO into the hype. Little did I know this small gamble on hype would have been such a good long bet today.
When we needed some space...
One day VRNG's price skyrocketed from a blog post by James Altucher (here) and I sold out mostly. To be honest, I don't see much value in the video ringtone market or in VRNG, and a large gain like that on such a speculative play was enough for me.
I bought into SVVC when it fell back into the $20s after its huge run up into the high $40s. Close to FB's IPO, the price peaked. I held and hope for a big show after the IPO, but boy was I wrong. I bring SVVC back up because I lost a good amount (for a college student) that day, but it was a gamble, and gamblers play for the risk.
Our relationship now:
Point being, investors are pushing prices up in VRNG for the litigation win against Google. Another article I read earlier in the Chicago Tribune (here) speaks to VRNG and companies like it. We could go on and on about small companies purchasing patent portfolios for litigation gains and speculative investors driving the price, but savvy investors already knew that.
Playing this stock is a highly speculative bet and I would not consider this an investment by any means. I've read so many of these Seeking Alpha articles, these no name blog articles and all that jazz hyping up the case (here, here and there) and I feel like someone needs to give it to you straight. VRNG, at least currently, is just a gamble. VRNG could see a large price jump if the court decision lands in their favor, but be aware that price fluctuations are heavily reliant on good and bad press. If they fail, I would imagine an equally large price decline.
I bought in again in the $3.30 range, and like you am hoping for a big win from the upcoming trial. VRNG is, like SVVC was, in my speculative play portfolio. The value it has to me is the enjoyment of the risk.
In all, I would consider myself a value investor at heart and would not invest in a company of this nature but I sure do love a martini and a gamble from time to time, both of which this time are on the rocks.
Disclosure: I am long VRNG.