Seeking Alpha

Court grants Vringo 6.5% royalty rate, shares halted

  • The Eastern Virginia district court handling Vringo's (VRNG) IP suit against Google, AOL, IAC, and others has granted the company a royalty rate of 6.5% on infringing products.
  • The ruling comes 25 days after the court awarded Vringo supplemental damages and prejudgment interest, and six days after a Google workaround was rejected.
  • Shares had jumped 13.4% AH before they were halted.
Comments (35)
  • Andrew Colburn
    , contributor
    Comments (138) | Send Message
     
    Should also be noted the stock is halted
    :P
    28 Jan 2014, 04:38 PM Reply Like
  • normandemma@hotmail.com
    , contributor
    Comments (13) | Send Message
     
    one of you bright guys. what does that mean in stock price??????
    28 Jan 2014, 04:44 PM Reply Like
  • Andrew Colburn
    , contributor
    Comments (138) | Send Message
     
    Probably opens up around 6-7
    28 Jan 2014, 04:47 PM Reply Like
  • RacerX1225
    , contributor
    Comments (126) | Send Message
     
    I expect the mother of all short squeezes tomorrow. If it hit double digits, I wouldnt be surprised. Plus on this news Russel Investments will be adding to their position big time. Wish I was still dating their VP of Investment Risk Analysis! ;)
    28 Jan 2014, 07:45 PM Reply Like
  • trexia
    , contributor
    Comments (165) | Send Message
     
    From J. Giles-SA Article

     

    "Scenario 4) Vringo receives the 7% royalty rate and 20.9% past damages from Google.

     

     Past Damages

     

    ($Royalties (7%)TotalG... BillionOther Defendants$14,700,000+  

     

    Again, Vringo has $60 Million in cash with no debt. Add in the $1.47 billion it will receive from the defendants + Google's royalties and that adds up to over $1.53 billion by 2016. Divide Vringo's 82.2 million shares (common stock) and you get $18.61 cash per share.

     

    Vringo's New Earnings Multiple

     

    A big question coming up now is how much of a multiplier can we apply to Vringo? It's clear now that once post trial motions are finalized, Vringo, proving that its patents can generate revenue,should be multiplied by some kind of a factor. You can put whatever factor you think is right whether it be 5x, 10x, or 20x. Let's go with a multiplier of 5x.

     

    Lets say that the post trial motions go in the direction of scenario 2. This would mean that Vringo receives the 3.5% royalty rate as well as the $118 million in past damages from Google and defendants.

     

    Vringo would have over $753 million through 2016. Add the $60 million in cash with a multiplier of 5x and that would give Vringo a market cap of $4.06 billion (5x $813 million). With a market cap of $4.06 billion and using Vringo's 82.2 million shares (common stock), Vringo's price per share would be between $49-$50.
    28 Jan 2014, 08:03 PM Reply Like
  • caddy311
    , contributor
    Comments (154) | Send Message
     
    would not be fun to be short right now
    28 Jan 2014, 04:52 PM Reply Like
  • Houston Energy Trader
    , contributor
    Comments (136) | Send Message
     
    Sweet. $8 to 9 seems likely this year, maybe even this week!
    28 Jan 2014, 05:16 PM Reply Like
  • Leont68
    , contributor
    Comments (1366) | Send Message
     
    nice!
    28 Jan 2014, 05:18 PM Reply Like
  • Crosstrain
    , contributor
    Comments (8) | Send Message
     
    ZTEEEEEEEEEEEEEEEEEEE NEXT
    28 Jan 2014, 05:23 PM Reply Like
  • Leont68
    , contributor
    Comments (1366) | Send Message
     
    nope finish off those 19+ million short interest first , starting tomorrow we will see a huge pop when @9.30 am.
    28 Jan 2014, 05:32 PM Reply Like
  • 26184
    , contributor
    Comments (4) | Send Message
     
    why is this news only posted here? Nothing on Bloomberg or other news sites as far I can see. VRNG website only listing news of settlement with ADT.
    28 Jan 2014, 05:44 PM Reply Like
  • Izeyll
    , contributor
    Comments (10) | Send Message
     
    That is very odd... you would think the company would be the first to report about their own victory on their website. I can't seem to find any other news of this anywhere else.

     

    The information is vague and doesn't link to anywhere else... also, what revenue does the 6.5% royalty rate apply to? Which specific "infringing products" does it refer to?
    28 Jan 2014, 06:28 PM Reply Like
  • Leont68
    , contributor
    Comments (1366) | Send Message
     
    Izeyll, check tomorrow on Vringoip.com it should be listed soon. lots of articles by justin giles and patent plays you can read up on that provide a lot of background info if your interested. good luck!
    28 Jan 2014, 06:37 PM Reply Like
  • Leont68
    , contributor
    Comments (1366) | Send Message
     
    @26184 SA is the best place for up to date news, Bloomberg and other sites have not even caught up yet that is all.
    28 Jan 2014, 05:46 PM Reply Like
  • Saltyman
    , contributor
    Comments (34) | Send Message
     
    Does anyone why Vringo was halted? Some kind of technical glitch, or other?
    28 Jan 2014, 05:50 PM Reply Like
  • Leont68
    , contributor
    Comments (1366) | Send Message
     
    It is halted because it is up 13.1 percent AAH and a fail safe was most likely triggered.

     

    Most likely some people found out about the news and rushed to cover. Tomorrow we will see a mother of all short squeeze. I wish them all luck trying to find shares to buy back.
    28 Jan 2014, 05:54 PM Reply Like
  • Saltyman
    , contributor
    Comments (34) | Send Message
     
    Thanks Leon.

     

    That seems somewhat less than kosher to me, but it is legal.
    28 Jan 2014, 06:00 PM Reply Like
  • User 13608602
    , contributor
    Comment (1) | Send Message
     
    Actually, according to nasdaqtrader.com, the halt code for VRNG is "T1 - News Pending. Trading is halted pending the release of material news."

     

    This will not trade until VRNG gets out some sort of PR that reiterates the decision made by the judge this afternoon. My guess it won't be until tomorrow (Wednesday) morning.
    28 Jan 2014, 07:55 PM Reply Like
  • StepUp
    , contributor
    Comments (485) | Send Message
     
    Any idea what "infringing products" this will cover? It's impossible to understand the value of 6.5% until that is specified.
    28 Jan 2014, 06:42 PM Reply Like
  • Leont68
    , contributor
    Comments (1366) | Send Message
     
    The "infringing products" is Ad words... That is the bread and butter of Google search...
    28 Jan 2014, 06:45 PM Reply Like
  • husein zaidi
    , contributor
    Comments (5) | Send Message
     
    salty I love your sense of humour., looking into future and making the right judgement ofcourse it is kosher.
    28 Jan 2014, 06:44 PM Reply Like
  • Saltyman
    , contributor
    Comments (34) | Send Message
     
    You know "free markets" and all :)
    28 Jan 2014, 07:05 PM Reply Like
  • lais
    , contributor
    Comments (13) | Send Message
     
    It's about 1 B $ untill 2016. MSFT should pay 5% more.
    28 Jan 2014, 06:50 PM Reply Like
  • vpg999
    , contributor
    Comments (136) | Send Message
     
    the stock should now trade at 2x cash, assume $1.4BN cash x 2 = $2.8BN / 100MM diluted shares = $28, should open in teens maybe $20+
    28 Jan 2014, 06:57 PM Reply Like
  • caddy311
    , contributor
    Comments (154) | Send Message
     
    I would not bet the farm on vpg999's prediction
    28 Jan 2014, 08:13 PM Reply Like
  • WesternCiv
    , contributor
    Comments (23) | Send Message
     
    Here is HJJ's 6.5% RR ruling (Document #1088):
    http://bit.ly/1e5jnAQ
    28 Jan 2014, 07:30 PM Reply Like
  • winefan94920
    , contributor
    Comment (1) | Send Message
     
    6.5% Running Royalty on 20.9% of "Infringing AD Words" Rev will be about $950M.
    Minus Taxes and Legal fees, adding additional $50 M to VRNG from warrant exercise at $5 strike ( Yes, dilutive ) Plus $40m in bank PLUS $25 M from Microsoft
    EQUALS ABOUT $ 7 per share Cash fully diluted. (AFTER TAXES AND FEES) (You do math for NPV discount as it's not yet in bank.)

     

    ADD ADT
    ADD ZTE
    ADD ASUS
    ADD NOK Portfolio
    Add new patents from MSFT
    FB, MATCH.COM and E harmony coming.. That's worth another $500M, or another $5 per share in cash.
    $12 PPS at no multiple... And there are 19m shares short on a Free float of 50m.

     

    Hate to be the Hedgies short this baby on nothing more than a "Wink" from massive holders of GOOG... ( Yes, that's what I am saying) This game simply gets too costly to keep a $3 short position open at some time. This is a "hard to borrow" security with annual cost to borrow of 25% to 75%. The short thesis simply is broken here, IMHO.

     

    I am long VRNG. Do your own DD.
    28 Jan 2014, 07:43 PM Reply Like
  • RacerX1225
    , contributor
    Comments (126) | Send Message
     
    Its an "order imbalance" in all likelihood, which happens when there are too many orders for the automated trading systems to handle andalso if Google has expressed a buy out offer. If the laches thing could be huge upona reversal, perhaps they want to buy out Vringo? (conjecture)
    28 Jan 2014, 07:53 PM Reply Like
  • warfeloow
    , contributor
    Comment (1) | Send Message
     
    for news pending (T1)
    28 Jan 2014, 08:15 PM Reply Like
  • RacerX1225
    , contributor
    Comments (126) | Send Message
     
    19m Shorts start to cover at 8 AM and thats only if it doesnt re-open tonight before 8 PM.
    28 Jan 2014, 08:25 PM Reply Like
  • RacerX1225
    , contributor
    Comments (126) | Send Message
     
    Its a lil over $1 billion to Vringo and a lil under $12 a share in worth. Dont forget Microsoft has to add 5% of the Google damages to it additionally.
    28 Jan 2014, 08:25 PM Reply Like
  • Victoria70
    , contributor
    Comments (25) | Send Message
     
    CONGRATS to all the longs! Kevin Porter you did good. Great DD with this stock. You were right on the $$ with RR%. 6.5% is awesome and I am so excited for everyone. Have a wonderful morning. Great job everyone! :
    29 Jan 2014, 01:33 AM Reply Like
  • brant359@yahoo.com
    , contributor
    Comments (7) | Send Message
     
    Thank you WesternCiv for posting the link to the judgement.
    29 Jan 2014, 06:41 AM Reply Like
  • 615@SG
    , contributor
    Comment (1) | Send Message
     
    Wow, is the moment worth waiting for even I hold this baby for slightly more than a year, well done Vringo, way to go.
    29 Jan 2014, 06:43 AM Reply Like
  • lamsa
    , contributor
    Comments (4) | Send Message
     
    Glad I bought my Call option at .44
    29 Jan 2014, 06:44 AM Reply Like
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