Seeking Alpha

Vringo (VRNG -5.3%) is slipping on the second day of its big trial against Google. Shares are...

Vringo (VRNG -5.3%) is slipping on the second day of its big trial against Google. Shares are down 22% from their Oct. 9 high, but still well above where they were before Google's request for a summary judgment was denied. SA's Steve Kim recently estimated the trial is set to last roughly 2 weeks, and noted Vringo is aiming for the moon by seeking a royalty rate of 3.5% on Google AdWords revenue.
Comments (30)
  • it may not be moon, if patents in question are responsible for 95% of revenue Google gets.
    17 Oct 2012, 01:10 PM Reply Like
  • Let's translate what a royalty rate of 3.5% on Google AdWords revenue means.

     

    It has been reported that Google's AdWords revenue approximates $85 billion. The 3.5% claim equates to approximately $4 billion.

     

    Vringo has approximately 120 million fully diluted shares outstanding.

     

    You can do the math yourself if you wish to calculate the potential Vringo share earnings.

     

    Even if you assume a worst case scenerio -- Vringo is awarded only 1.5% of Google's AdWords revenue, plus forwad royalties plus what Googles custoners will be forking over -- and you still arrive at a pretty big number.

     

    WOW!!!
    17 Oct 2012, 01:23 PM Reply Like
  • yes

     

    even just 1% would be big ofr VRNG

     

    3.5% is reasonable actually

     

    Royalties usually go from 1% to 5%
    17 Oct 2012, 02:35 PM Reply Like
  • Can you give us an specific reason for the VRNG decline in price?
    17 Oct 2012, 01:11 PM Reply Like
  • Just weak hands that can't wait for settlement,buyout or verdict

     

    Normal
    17 Oct 2012, 02:37 PM Reply Like
  • Who's selling? Weak longs or impatient types? Or both?
    17 Oct 2012, 01:11 PM Reply Like
  • Who's selling? I would think those who bought heavily on margin expecting a quick settlement. Time is money, to say nothing of worry.
    17 Oct 2012, 01:23 PM Reply Like
  • Ah. I hadn't thought of that... the margin and quick settlement that is.
    17 Oct 2012, 03:34 PM Reply Like
  • looooooooooooooonnnnnn...
    17 Oct 2012, 01:23 PM Reply Like
  • If it goes down much more it only makes it that much more tempting to stock up. I believe the up and down motion of the last week is purely emotional. -e.p.
    17 Oct 2012, 02:07 PM Reply Like
  • The drop in stock price was in response to VRINGO announcing at trial a reduced demand of $493 million dollars from $697 million dollars. This was 30% less and the stock is trying to price that in that risk.
    17 Oct 2012, 02:10 PM Reply Like
  • and where are u reading that ?

     

    Claimed royalties up to 3.5% from pretrial estimate of 1%
    17 Oct 2012, 02:39 PM Reply Like
  • BS
    17 Oct 2012, 05:59 PM Reply Like
  • No that Is NOT the reason and your Numbers ARE INCORRECT as is your Misinformed Post. Please only post what you can confirm...NOT an Incorrect From a Seeking Alpha article written by a Wanabe reporter 5 cars back from pack . Knows cannot confirm Any factual info so instead feeds further Speculation right after doing 10 bong hits on their asking the Magic 8 ball ...Be patient and dont listen to anyone that cannot confirm what they conjure up out of boredom...Expect Volitility and either trade or accumulate accordingly
    18 Oct 2012, 10:32 AM Reply Like
  • The Vringo lawyers told the jury that they are seeking a 3.5% prospective and retroactive royalty which they say equates to approximately $1 billion. In addition, the Court could also award interest on past damages, plus attorney's fees.

     

    We have to function based upon facts rather than speculation or wishfull thinking.
    18 Oct 2012, 06:37 PM Reply Like
  • Is the judgement based only on Google's US revenue? Does anyone know what those #'s are?
    17 Oct 2012, 02:10 PM Reply Like
  • $4-5B

     

    My Estimate =0)
    17 Oct 2012, 02:53 PM Reply Like
  • People can be selling for any reason whatsoever but some may have gotten into it for the pre-trial settlement pop as a trade and have been trying to hold longer whatever their agenda is and now its quiet as trial begins and they cant hold longer and/or are taking profits after a nice move up. I'm long, I'm holding.
    17 Oct 2012, 02:54 PM Reply Like
  • I think the share price of VRNG will fall each day until some word gets out to what is happening in the court room. IMO no news is good news and I'm hanging tight. I'm long in VRNG. I agree, those that are selling can't handle the stress of waiting in fear or are worried and sitting on the fence post not knowing what side to take; wait it out or sell.
    GO VRNG!
    17 Oct 2012, 03:28 PM Reply Like
  • koski19,

     

    " those that are selling can't handle the stress of waiting in fear or are worried and sitting on the fence post not knowing what side to take;"

     

    Well said.
    17 Oct 2012, 03:36 PM Reply Like
  • I think a lot of people expected either a buyout or a settlement as there were a lot of bullish articles saying Google 'would never let this go to trial'...so once the MSJ was denied the 'expected' settlement or buyout seemed like a win/win scenario...now that we go to trial I would guess some investors are looking at it now as a 50/50 coin toss as to whether Vringo win or lose at trial and either are less confident and getting out or were looking for the quick pop with a settlement and don't now want to wait on a trial award and possible appeal, etc..

     

    I'm long VRNG and holding...
    17 Oct 2012, 03:42 PM Reply Like
  • As long as one does not buy on margin, the long will be rewarded eventually. That is my view.

     

    The huge dump before today's close may be due to bear raid unless there is a bad news before we knew it.
    17 Oct 2012, 05:40 PM Reply Like
  • Me too.
    17 Oct 2012, 05:47 PM Reply Like
  • worthwhile waiting for the piece of cake!! I work in licensing and I assure you the rate is between 2 to 5% or more depending on minumum upfront guaranteed royalties!!
    17 Oct 2012, 06:11 PM Reply Like
  • normal royalty rates are from 2 to 6% together with minimum guaranteed royalties paid upfront. and I work as a consultant!!

     

    We have to be patient ... and obviously it is a high risk situation with excellent probabilities of success LONG TERM!
    17 Oct 2012, 06:11 PM Reply Like
  • More DD from EXP: http://bit.ly/T1liua
    17 Oct 2012, 07:31 PM Reply Like
  • Thank you EXPstocktrader for giving us the background of Vringo's expert witness, his credentials and previous court testimoney as an expert witness.
    17 Oct 2012, 09:59 PM Reply Like
  • sell or buy more is that your fortune...
    18 Oct 2012, 12:40 AM Reply Like
  • I believe in patent licensing,
    18 Oct 2012, 12:43 AM Reply Like
  • The Vringo lawyers told the jury that they are seeking a 3.5% prospective and retroactive royalty which they say equates to approximately $1 billion. In addition, the Court could also award interest on past damages, plus attorney's fees.

     

    We should strive to communicate predicated upon facts rather than speculation or wishful thinking.

     

    I suggest that if you have an interest in keeping up with the trial first hand, go to Steve Kim's blog where you can purchase Steve's excellent synopsis of each day's trial. The cost is a bargain -- only $1.50 per daily synopsis.

     

    If more people would get Steve's daily synopsis, much of the misinformation that is being circulated will be alleviated.
    18 Oct 2012, 06:47 PM Reply Like
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