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SteveKimLaw
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I am an active husband, father, lawyer (more than 24 years, how time flies), and investor. I believe in contrarian investing, i.e., going where the crowd isn't. I believe that successful investing, like successful living, requires equal parts listening and evaluating, followed by independent... More
  • Vringo Vs. Google: Verdict Imminent, Trading Halted 51 comments
    Nov 6, 2012 12:43 PM | about stocks: VRNG

    Trading halted at the moment, it appears the verdict is about to be delivered. Good luck all.

    Check my free Vringo forum, vringo.freeforums.net for updates.

    Disclosure: I am long VRNG.

    Themes: GOOG Stocks: VRNG
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Comments (51)
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  • see punjabi
    , contributor
    Comments (351) | Send Message
     
    Thanks Steve,
    News coming out that vrng won 30 million past judgement and 3.5% for future royalties
    what should be price based on these numbers
    thanks
    6 Nov 2012, 01:24 PM Reply Like
  • jack37
    , contributor
    Comments (7) | Send Message
     
    I have another question, on running royalties, what if Google's engineers change their search engines and are no longer using the infringement patents does that end paying future royalties?
    7 Nov 2012, 07:47 AM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    highly unlikely

     

    they had 14 months to do it and did nothing
    7 Nov 2012, 07:48 AM Reply Like
  • CadillacKid
    , contributor
    Comments (17) | Send Message
     
    Do you believe the expected all in for VRNG to be $550-600M?

     

    Btw you called they were going to win all along, very well done. Hope you capitalized well
    6 Nov 2012, 01:26 PM Reply Like
  • see punjabi
    , contributor
    Comments (351) | Send Message
     
    No matter where stock opens but steve thanks for your articles and updates on vrng. I kept holding shares and some options irrespective of lot of noise and stock manipulation.
    thanks
    6 Nov 2012, 01:31 PM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    $30M in past damages plus royalties on its patents until they expire in 2016. The jury ordered Google to pay $15.9M, AOL to pay $7.9M, and others including Target and Gannett to pay the remainder.

     

    Future royalties is HUGE but how can it be only 30M past ?
    and GOOG just the same as the others 15+15 ???
    Don't understand how that's possible
    6 Nov 2012, 01:57 PM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    it really doesn't make sense at all that Google same amount as the others

     

    it should be 10x, not the same

     

    wasn't the judge and only him going to decide future royalties ?

     

    maybe it's $30M +3.5% for past and judge will decide future royalties, otherwise it doesn't make sense at all
    6 Nov 2012, 02:05 PM Reply Like
  • biosolar
    , contributor
    Comments (3) | Send Message
     
    Anyone have any idea how long before trading begins again?
    6 Nov 2012, 03:36 PM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    Steve, thanks so much for your insight and shared knowledge! I am very new to trading (like I just started THIS month type of new) and am hoping to make a nice win off one of my first investments. I initially got in too high, dumped my shares at a slight loss and got in at a better price later (although not as good as the prices on Monday!!). It's not as much as most of you guys have on the line I am sure but it will help me stay in the trading fight so to speak. You were a HUGE help on this one! Thanks again!!
    6 Nov 2012, 02:25 PM Reply Like
  • SecretlySavage
    , contributor
    Comments (29) | Send Message
     
    Why the hell is the share price dropping after a favorable verdict? It was trading higher on speculation of a win. This is getting ridiculous.
    6 Nov 2012, 03:21 PM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    The verdict was not what we all had hoped for as far as the sum of monies to be paid to Vringo. I suspect that everyone is panicing and selling (hopfully its the dumb money and not the smart money). However, I firmly believe the stock is still worth more than what it is currently trading at given the royalties that are to be received. I am hanging on (with a set price to sell if it falls below it) with the hopes that once the dust settles the price will gravitate to where it should be. I am definitely looking forward to hearing what Steve has to say. Today has been a CRAZY day with Election Day adding stress on top of this crazy stock!! ;-)
    6 Nov 2012, 03:54 PM Reply Like
  • hbaskerville
    , contributor
    Comments (44) | Send Message
     
    If you followed the updates on Twitter, people were expecting a grand slam home run. While of course i would have liked a bigger number in past royalties, the important part is that the Judge will calculate future royalties and the patents have been deemed valid. The potential downside from a Google appeal is off-set by an appeal of the laches ruling by Vringo. VRNG is not going to $100 tomorrow, but it's only going up from here.
    6 Nov 2012, 03:50 PM Reply Like
  • SecretlySavage
    , contributor
    Comments (29) | Send Message
     
    Yeah the 30 million for all the defendants combined is laughable. The jury deemed a 3.5% royalty right acceptable yet they didn't apply that to the past damage figure. I wasn't one of the dreamers expecting a $100pps but I figured $10 was definitely a reasonable expectation. This has really soured my outlook on patent plays though. Too many factors that can't be accounted for like sheeple panicking and dumping shares after a positive verdict.
    6 Nov 2012, 04:04 PM Reply Like
  • hbaskerville
    , contributor
    Comments (44) | Send Message
     
    I intend to hold my VRNG stock. It's patents have been deemed valid. It gets a 3.5% royalty from Google until 2016. And this case sets the tone for future cases against Yahoo, Microsoft, and others. By the way, Reuters seems to think the future royalties could be worth $500MM:
    http://yhoo.it/SLmQIc
    6 Nov 2012, 04:11 PM Reply Like
  • Prescient Investment Analysis
    , contributor
    Comments (260) | Send Message
     
    The Reuters article cites courtroom sources and they could be some of the same people who post on web sites like this.
    6 Nov 2012, 04:54 PM Reply Like
  • mitigate
    , contributor
    Comments (14) | Send Message
     
    At present, the shorts have run through the stops set by the longs. In my opinion, this is a classic play: sell the news buy the rumor. The judge still has to rule on future damages and by all accounts will be substantial if he uses the 3.5% royalty rate. One news report indicated this could be as much as $125 million for each of the next five years, (through 2016) which would total above $600 million. Based on the questions the jury was asking over the last few days, it became clear they were going to rule in favor of VRNG. With that in mind, I took off all my downside stops yesterday so I would not be stopped out of this stock. I am glad I did. Going forward, when the judge announces his decision on damages, I am of the opinion the stock should see a nice bounce. I am still long VRNG.
    6 Nov 2012, 04:11 PM Reply Like
  • Alpha0990
    , contributor
    Comments (23) | Send Message
     
    What if the judge decides the 3.5% was the mistake made by the Jury and not about the 15 million dollar verdict from Goog. What if the judge divides 15 million with the billions of gross revenue amount google submitted to court and comes up with a 0.35% royalty rate instead of 3.5%?
    24 Mar 2013, 06:07 PM Reply Like
  • Droney
    , contributor
    Comments (100) | Send Message
     
    So when will the future royalty rate be announced? Reports say 3.5% rate was recommended. So that not being fully confirmed must be the reason for the slide right?
    6 Nov 2012, 04:29 PM Reply Like
  • SecretlySavage
    , contributor
    Comments (29) | Send Message
     
    Man I hope you guys are right. I've been into VRNG for about 8 months and I've made some money here and there but I'm definitely looking forward to getting out with some profit and moving on to the next deal. Thanks for all the great insight SA readers.
    6 Nov 2012, 04:36 PM Reply Like
  • mitigate
    , contributor
    Comments (14) | Send Message
     
    What will happen next is this: The judge will most likely today have instructed counsel for both sides to file any motions in regard to the verdict. He will review said motions and then rule on them and make his decision in regard to damages going forward. He can modify the jurys verdict but in most cases, unless there is clear and compelling evidence that the jury got it wrong, the judge will go with what the jury has decided. Steve should jump in here and give us an idea of what to expect in the next few days regarding civil procedure after a verdict has been announced.
    6 Nov 2012, 04:52 PM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    Sheeple!! That's awesome!! Nice one SecretlySavage and VERY true!! Glad I hung on. Like Mitigate, I also deactivated my stop loss this afternoon as I felt the "sheeple" out there would do exactly what they did if the verdict wasn't as high as we were hoping for (which we all knew was going to be the case last night so why was everyone else so surprised and panicked?!). Thank God I did as it went slightly below my preset loss limit but then bounced back up. I would have been kicking myself later!! Based upon what I have learned so far, I have decided to hang on for the ride a bit longer. I have learned a lot about the market's unpredictability on this one for sure. I know I have many more bumps and bruises yet to come but at least I am feeling confident that I am in fact learning. Thanks again to Steve but also to you guys who post your comments and share your knowledge!!!
    6 Nov 2012, 04:59 PM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    STEVE
    it seems that jurors clearly made an error

     

    GOOG damages are 159M, not 15.9M

     

    can the judge fix it tomorrow ?
    6 Nov 2012, 11:04 PM Reply Like
  • Alpha0990
    , contributor
    Comments (23) | Send Message
     
    What if the judge decides the 3.5% was the mistake made by the Jury and not the 15 million dollar amount. What if the judge divides 15 million with the billions of gross revenue amount google submitted to court and comes up with a 0.35% royalty rate?
    24 Mar 2013, 06:12 PM Reply Like
  • CadillacKid
    , contributor
    Comments (17) | Send Message
     
    KevinPorter I've heard that as well here http://yhoo.it/RGjDIx

     

    where did you hear damages were miscalculated?
    6 Nov 2012, 11:35 PM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    it's 99.999% sure they miscalculated

     

    Very likely the judge can fix it

     

    it's probably 173M past damages + 750/850M future = about 1 B

     

    HUGE
    7 Nov 2012, 12:01 AM Reply Like
  • SecretlySavage
    , contributor
    Comments (29) | Send Message
     
    Yeah I've been reading the same thing about the miscalculated damages. I can't believe the math wasn't double and triple checked before they halted the stock for "imminent news pending". If this clusterfu*k doesn't get cleared up first thing in the am I swear to god.
    6 Nov 2012, 11:43 PM Reply Like
  • mitigate
    , contributor
    Comments (14) | Send Message
     
    It appears the jury made a mistake in the math. If this is the case, the judge will correct it. Now keep in mind the judge after reading the verdict page by page very careful asked for it back after it was read aloud by the court clerk to double check something that he obviously didn't see the first time. He recessed for 5 minutes and then decided to recess for the rest of the day and gave instructions to counsel to file any motions that are appropriate. It does appear that the jury miscalculated googles damages at 15.8 million. It should have been 158 million.
    7 Nov 2012, 12:03 AM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    yes 158M + other defendants + future royalties = HUGE
    7 Nov 2012, 12:11 AM Reply Like
  • jesseimes
    , contributor
    Comment (1) | Send Message
     
    So we won, but why hasn't the stock went up at all. If this is such great news shouldn't the stock increase atleast a little bit? How can the stock sky rocket it to $5.00 on speculation, but then we win the case and it goes down?
    7 Nov 2012, 12:19 AM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    past damages reported 30M.... it should have been 173M...

     

    it will be fixed tomorrow very likely
    7 Nov 2012, 12:21 AM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    Recap

     

    GOOG infringed on all claims and both patents

     

    royalties awarded 3.5% as expected

     

    calculations correct for all defendants BUT Google

     

    Judge must only fix that

     

    it's 158M, not 15.8
    173M total past damages

     

    Future royalties projections jump to 750-850M which is HUGE

     

    173Mx4 years (+ growing revenues and 50months not 48 so more than 4 years)

     

    Total award (past+future) about 1 Billion

     

    This is easily a $10 pps
    7 Nov 2012, 12:31 AM Reply Like
  • jjstc4
    , contributor
    Comments (15) | Send Message
     
    But with the news out and the shares of both companies reacting as they had, will the judge risk the backlash if he were to come out and say "oops, the jury left off zeros in their MIS-calculation, they REALLY meant XXX"?
    7 Nov 2012, 08:29 AM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    he HAS to fix it, are you joking ?
    7 Nov 2012, 08:50 AM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    Steve, where are you man?! Sure would like to know what you think of all this. You've been very quite lately and that concerns me a little bit. Did you dump your shares yesterday?! lol I'm sure you didn't.
    7 Nov 2012, 10:17 AM Reply Like
  • SecretlySavage
    , contributor
    Comments (29) | Send Message
     
    I think an investigation needs to be launched by the SEC. This is the second major screw up on the judicial end (first being the laches motion) that has had a huge effect on the share price. This stinks of stock manipulation and I really think its something that needs to be looked into. The fact that the damage calculation was not corrected first thing this morning is another indication that the powers that be have a vested interest in keeping the pps on the ropes. I think we need to get a petition going.
    7 Nov 2012, 11:14 AM Reply Like
  • SteveKimLaw
    , contributor
    Comments (461) | Send Message
     
    Author’s reply » Hi, guys. Crazy ride on this case, and then yesterday, nothing but disappointment after what was a really positive verdict. The verdict was obviously great for Vringo, although the particular damage award against Google was shamefully low. Given how everything went so strongly in Vringo's favor, I have to think their calcs were mistaken in some manner. The reason I have been relatively "quiet" since the verdict is because I have been trying to evaluate Vringo's options for (1) verifying whether a mistake was made; and (2) addressing the mistake, if such is proven. It certainly will not be a simple matter such as just asking the Judge to "fix" it.
    7 Nov 2012, 11:30 AM Reply Like
  • Alpha0990
    , contributor
    Comments (23) | Send Message
     
    What if the judge decides the 3.5% was the mistake made by the Jury and not the 15 or so million dollar amount. What if the judge takes the 15 million as a guide for his decision and adjusts the royalty rate to a 0.35% instead of 3.5%?
    24 Mar 2013, 06:18 PM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    Tell me where to sign SecretlySavage!! I agree. I can only imagine the traders who have lost tons on this deal!! Fortunately I have an amount that I can spare to lose since I am basically a first month trader and am dabbling right now. None-the-less this one STINKS TO HIGH HEAVEN of stock manipulation even from a novice trader's view point!!! I just hope it gets fixed soon. However, even if it does it doesn't change the outcome for those who traded this week. Lawsuit for those losses due to outside manipulation? This is just plain crazy. It's a roller coaster ride with people falling out of their safety restraints with the rest of us watching and wondering when the damn thing will stop!!
    7 Nov 2012, 11:33 AM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    Thanks Steve. Was hoping you would give us your thoughts. Thanks!! I figured it would't be as easy to fix as we all hoped. Please keep us informed as much as you can. It sounds like you are saying a miscalculation has not been positively verified and there is a chance the numbers released yesterday could be correct (despite being extremely low considering). I was under the impression a miscalculation was confirmed. This is making me stay put for now so I certainly would like to know if I am taking undue risk based on bad info. Thanks a ton!!
    7 Nov 2012, 11:40 AM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    BTW, the whole damn market is taking a beating today due to the election results. I expected this if Obama won (still scratching my head how....Benghazi wasn't enough?). The VRNG stock is taking a hit as well and my opinion is it has nothing to do with the stock and more to do with the market as a whole (rising/lowering tide thing). I'm not panicing.....yet!! Need to know if miscalculation info is accurate tho.
    7 Nov 2012, 11:44 AM Reply Like
  • JBfilms
    , contributor
    Comments (8) | Send Message
     
    this wrong math rumor is puzzling to me, the presumed "correct" calculations are based on 35% not 3.5% in that post ie http://bit.ly/RWPmU9, sounds like wishful thinking to me, anybody care to prove otherwise?
    I'm long VRNG
    7 Nov 2012, 02:58 PM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    it's 100% clear at this point

     

    The error comes from the coincidence that the last 13.5 months of revenues (Sept 15 2011- Nov 06 2012)
    are exactly 35.0% of the total of the 6 years of past damages.
    This 35% is a ''similar'' number to 3.5%.

     

    They had a table of damages which was ALREADY SET at 3.5% royalty for all the 6 years of past damages

     

    Google $451.1M 35% = 158M (jury decimal error 15.8M)
    Aol $22.7M 35% = 7.9M correct
    IAC $18.9M 35% = 6.6M correct
    Target $282k 35% = 98K correct
    Gannet $12k 35% = 4K correct

     

    So THE ONLY THING they had to do was to calculate 35% for each defendants (a few minutes job),
    and that's what they did for all defendants BUT Google.

     

    For Google they used 3.5% not 35%....
    that's the error...

     

    They never had to use 3.5% since that table was already taking into account the 3.5% Royalty

     

    Google past damages are 158M, not 15.8M
    7 Nov 2012, 03:03 PM Reply Like
  • Droney
    , contributor
    Comments (100) | Send Message
     
    The most sensible post I've seen on this issue in the past 24 hours. Great work Kev. I think you are correct 100%.
    7 Nov 2012, 03:08 PM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    thank you, much appreciated
    7 Nov 2012, 03:13 PM Reply Like
  • SecretlySavage
    , contributor
    Comments (29) | Send Message
     
    I found this earlier. Has anyone else heard that the verdict was redacted today?
    http://bit.ly/RJ6Hlc
    7 Nov 2012, 05:52 PM Reply Like
  • Droney
    , contributor
    Comments (100) | Send Message
     
    Interesting
    7 Nov 2012, 05:56 PM Reply Like
  • mitigate
    , contributor
    Comments (14) | Send Message
     
    The only thing that was redacted was the forepersons name.
    9 Nov 2012, 02:34 AM Reply Like
  • "Captain" Jack Sparrow
    , contributor
    Comments (68) | Send Message
     
    Well...after all the kinda not so bright questions it seems to follow that the one running the calculator was probably a retired accountant...and being married to one they always misplace the decimal...not sure why but it is evidently true...??? lol
    8 Nov 2012, 02:29 PM Reply Like
  • brentchong
    , contributor
    Comments (9) | Send Message
     
    Steve,

     

    Any word on final ruling from JJ?
    9 Nov 2012, 10:02 AM Reply Like
  • Kevin Porter
    , contributor
    Comments (1727) | Send Message
     
    From EDVACOURT this am

     

    A few things quickly this morning. I have spoken with attorney's with both corporate and patent litigation backgrounds. This is for informational purposes only however and I am not suggesting anyone trade on this information. First, since there has been no final ruling the judge can absolutely change the faulty verdict math. If a ruling had been made it could still be done but is considerably more complicated. I'm looking for an all in number of $173M in past damages to be awarded by the Judge. I am also expecting that the judge has or will order the two sides to attempt to settle again. He may hold the the future royalty number back and keep the "threat" of injunction in his back pocket while he gives them a short time frame to work it out. Google will want a number that gives them a paid up license and authorizes its use by their clients. I'm guessing this number will be around $600M. I think Google will cover expenses on top of that.

     

    This would work well for both sides. Vringo gets the payment now and there are no appeals. Vringo can also seek to litigate against non-Google partners. For Google the matter is over and is not outstanding when/if there is an FTC lawsuit against them. This stock is considerably undervalued here and I think we will see that as the ruling comes out hopefully at latest by the middle of next week. I would imagine that Vringo counsel has already illustrated the damaging effect a "win" has had on their company. I think the Judge recognizes and seeks to rectify this in short order. I still consider a buyout to be remote but others have illustrated reasonable rationale for this. I don't think it happens primarily because Vringo would like to continue to roll out their own company.
    9 Nov 2012, 10:14 AM Reply Like
  • ricorivera
    , contributor
    Comments (18) | Send Message
     
    Thanks a TON Kevin. It's been so damn quiet today! Have you guys noticed the severe lack of volume today?! Looks like the more rational traders are FINALLY back in control!! Good grief the past few days were NUTS! ;-) Good luck to us all still in this for the long haul.
    9 Nov 2012, 01:36 PM Reply Like
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