Seeking Alpha

Vringo (VRNG -9.9%) closed with losses as investors digested the Google verdict. Equity Brief...

Vringo (VRNG -9.9%) closed with losses as investors digested the Google verdict. Equity Brief reports "sources in the Virginia courtroom" (no details on which faction, if any, they support) believe the jury's recommended 3.5% royalty rate would translate into payments of $125M/year until 2016 if upheld. (earlier: I, II, III).
Comments (8)
  • Vringo current market cap is approximately $300M with enough dilution available to send this to around $400M. You're using old share counts based on the 2Q report, in advance of two equity raises. You're also incorrectly comparing pre-tax, pre-expense REVENUE to a market cap, $125M a year after legal fees and taxes is around $65M per year in NET INCOME. Multiply $65M by 4 years until 2016 and it comes to $260M, which is in line with the current market cap.
    6 Nov 2012, 05:41 PM Reply Like
  • I highly doubt legal fees is going to be taken out of the royalties every year.
    6 Nov 2012, 06:22 PM Reply Like
  • Of course the lawyers get their piece of the future royalties. Otherwise the lawyers would have 0 incentive to go to trial. They would instead just do a pre-trial settlement at any amount so that they could collect their 20%.
    6 Nov 2012, 06:33 PM Reply Like
  • The legal fees are not payable every year. Not sure why you included those for all 4 years while calculating your $65M "estimate". Did not take the time to verify your other numbers since I have no dog in this case. But your estimate of $65M should be revised to $81M per year at least. Also, I'm not sure if they are going to sue others in the search market which may hike the amount of money they will be getting in future. Mixed feelings about this one. Smells like a "patent troll", am surprised they won the case.
    7 Nov 2012, 12:11 AM Reply Like
  • At least Reuters got it right: "Early Reports Indicate Vringo's Court Victory Worth Over $500 Million. Rources in the Virginia courtroom who saw a jury award Vringo`s (VRNG) subsidiary I/P Engine $32M in past damages plus 3.5 percent royalties on its patents until they expire in 2016 say the deal will total more than $125 Million per year for five years. The federal jury awarded judgements against a handful of technology giants, including Google Inc (GOOG),AOL (AOL), Target (TGT) and Gannett (GCI) in the widely publicized lawsuit.

     

    Wall St. Cheat reported: "VRNG was awarded $16 million (??) in damages and a royalties. Vringo was originally seeking nearly $500 million, but U.S. District Judge Raymond A. Jackson limited damages to just the past year."

     

    CNBC reported live on TV VRNG only received $30MM award

     

    Jury awarded Vringo $500MM.
    7 Nov 2012, 12:52 AM Reply Like
  • I wonder what the Judge's cut is from Google
    7 Nov 2012, 12:57 AM Reply Like
  • stock will plummet
    7 Nov 2012, 08:36 AM Reply Like
  • Yes, stock in the company that just won against Google is going to plummet. Google, who makes everyone else Vringo will sue look like ants. Just my opinion of course, as is everyone else's comments at this point without an actual judges ruling. And obviously, I'm being sarcastic. But I'll clarify anyways, the level of intelligence I have seen in most people over the past few weeks warrants that.
    7 Nov 2012, 05:54 PM Reply Like
DJIA (DIA) S&P 500 (SPY)