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  • VirnetX Holding: Decreased Earnings, High Price Signal Short Opportunity [View article]
    Shorts are covering, not adding, according to the latest figures.

    VirnetX Holding Corp (VHC) Short Interest

    Settlement Date Short Interest Avg Daily Share Volume Days To Cover
    6/30/2011 8,767,053 967,940 9.057434
    6/15/2011 9,402,349 1,647,684 5.706403
    5/31/2011 8,676,424 1,421,540 6.103538
    5/13/2011 7,539,718 1,015,185 7.426940
    4/29/2011 7,033,393 1,939,152 3.627046
    4/15/2011 5,910,488 3,539,909 1.669672
    3/31/2011 4,702,223 1,877,789 2.504127
    3/15/2011 4,361,985 480,592 9.076275
    Read more:

    Before anybody rushes out to short VirnetX they should consider the fact that institutional holders own far more of the company than the entire short position. 90 Institutions own 11,149,220 shares as of 3/31/11. Undoubtly that figure will be higher with the new figures out by the middle of next month.

    Here are the top five holder:

    VANGUARD GROUP INC 3/31/2011 1,586,003 (165,235) (9.44%) $60,839

    CANNELL PETER B & CO... 3/31/2011 1,504,875 19,600 1.32% $57,727

    BARCLAYS GLOBAL INVE... 3/31/2011 983,559 509,306 107.39% $37,729

    BLACKROCK FUND ADVIS... 3/31/2011 814,186 (30,950) (3.66%) $31,232

    DIMENSIONAL FUND ADV... 3/31/2011 722,558 121,268 20.17% $27,717

    Jul 14, 2011. 08:52 AM | 3 Likes Like |Link to Comment
  • VirnetX Holding: Decreased Earnings, High Price Signal Short Opportunity [View article]
    The hedge funds, and retail shorts, that are now in dire straights with their short positions in VirnetX tried to rationalize an apparently (to them) irrational valuation based on normally utilized valuation metrics.

    That has turned out to be a very costly mistake.

    The catalysts for the most recent run-up:

    First, VirnetX announced that at the request of the Alliance for Telecommunications Industry Solutions (ATIS), it agreed to update its licensing declaration to ATIS under ATIS' Intellectual Property Rights (IPR) policy. “This is a key and important event for us as ATIS is the North American Organizational Partner for the 3rd Generation Partnership Project (3GPP) and we are now listed in their database," said Kendall Larsen...More than 200 North American companies actively formulate standards in ATIS' Committees…As an American company, VirnetX is uniquely positioned to license its essential security patents to ATIS members as they move into 4G." That announcement, once again, focused attention on VirnetX’s patent portfolio and its success with ETSI and the 3GPP alliance.

    Then, the price paid for Nortel’s patent portfolio hit the shorts like a ton of bricks. It came out of left field and was completely off their radar. It also had the effect of drawing attention to how concentrated and limited the 4G LTE Advanced patents are and the valuable role they play in cross licensing among the major players in mobile communications. The auction placed an implied value on the patent portfolio that VirnetX holds that is much higher than the shorts were expecting (if they ever made that calculation or understood the import of the patents themselves).

    The Cowen upgrade was the next hit the shorts took. Just when, I presume, they were beginning to work out a plan to drive the price of the stock down once again Cowen blindsided them. Cowen and Company is a highly respected firm that no doubt has been closely tracking short interest in VirnetX. I have to believe they were cognizant of the effect on the shorts their report would have, and how it would benefit the funds and investors that they put into VirnetX stock.

    What the shorts now don’t know is what future development(s) will send them reeling further still, and elevate the pps to higher highs.

    While the original Cowen report discussed in detail the 4G LTE patents and the potential of VirnetX’s Secure Domain Initiative no value was placed on the two blockbuster lawsuits that are working there way through the courts. Maybe, VirnetX did not want to draw attention to that aspect of the company’s business strategy or discuss problematic valuations. But the fact is the Microsoft suit brought in 200 million. Also, equipment maker Avaya, is now positioned for an IPO and has not fully disclosed the hit it could take from a settlement or lose to VirnetX in its IPO filings. Have the shorts not taken into account the effect of a settlement, or new lawsuits, that are no doubt, waiting in the wings to be filed?

    Any hint of talks between VirnetX and a possible suitor would be an accelerant of explosive potential to the stock price. Have the shorts ignored the recent beating Google took at the Nortel patent auction and the pressure it is facing to beef-up its 4G LTE patent portfolio thus allowing it to cross license to the other major players, most of which are its competitors in the 4G mobile market. Google also needs leverage in the many lawsuits it is embroiled in with its Android platform. VirnetX could be Google’s best bet to acquire a significant patent portfolio.

    Any short not tracking VirnetX’s patent applications needs to pay more attention. VirnetX has many applications in various stages of the approval process and by the end of the year should have close to 100 U.S. and International patents approved or applied for.

    Finally, there is the question of licensing. All I will say is to quote what Kendall Larsen CEO said at the Annual Stockholders Meeting: “I can assure you we are working on licensing deals”. The shorts should apply some logic to the consequences of what happens when the 1st deal is signed.

    The above is a public service wake-up call to the short community.
    Jul 14, 2011. 08:09 AM | 4 Likes Like |Link to Comment
  • No Security in VirnetX Stock [View article]
    David, I don't think you have the ability to research a company in a competent manner.

    Your article is a hit piece and a hatchet job that is a disservice to Seeking Alpha.

    Looking ahead to the next 90 days what developments can we expect that will impact VirnetX’s stock price?

    Patents: flyersdh over at the IV board has been tracking VHC’s patent applications and he has indicated that one patent will be official on April 5th and two others appear to be close.

    Clarification on VirnetX’s 4G patents and licensing from the 3GPP or one of its member organizations - ETSI or ATIS: Anyone who has not read mkarstens post should. On April 19 and 20th ETSI is going to take up issues critical to VirnetX with documents provided from the ETSI General Assembly Chairman and from the ETSI General Director, concerning VirnetX to the ETSI General Assembly, (which is held twice a year).

    Institutional Holdings: now that the 1st quarter has ended all funds are required to update their holding within 45 days. It is my belief that there has been a significant participation by funds in the recent rally. Consequently, I would expect that we will see a large percentage increase in the fund’s holdings of VirnetX stock.

    Analyst coverage by a major firm could come at any time: 4G is heating up and Release 10 of the 3GPP alliance is focusing interest on companies that have foundational patents crucial to 4G. VirnetX has the 4G security patents. Possible updates from Konlin, Dawson James, and Oakley’s Wall Street Corner, who have all covered the stock in the past, are also a possibility.

    Russell 3000 rebalancing: The 2011 reconstitution of the Russell Indexes will take place after the market close on June 24, 2011. VirnetX is currently included in the Russell 3000 Index and the Russell Global Index. Now that VirnetX has a capitalization of around one billion it could very well move up to the Russell 2000 or be included in some other Russell Index. The rebalancing will make for a couple of exciting days with massive volume and possible price spikes.

    Annual Stockholders Meeting May 26th at the offices of Wilson Sonsini Goodrich & Rosati will focus interest on current developments with the company. (Note where the meeting is being held).

    Developments out of left field that could happen at any time:
    --settlement with any one of the six companies that VirnetX is suing…most likely Apple, imo as they are right now designing and signing production agreements for their 4G compliant devices due out next year.
    --new lawsuit(s) filed by McKool Smith the premier IP litigation firm in the US on
    Virnet’X behalf.
    --licensing agreement(s) signed with any of the hundreds of members of the various
    mobil telecommunications standards bodies.
    --establishment of the Secure Domain Name Registry by VirnetX.
    --an announcement to the mobile industry by VirnetX that Gabriel Software
    Development Kits (SDK) are available.
    --International Telecommunication Union industry wide announcement to
    telecommunication and mobile companies that the International Mobile
    Telecommunications- Advanced (IMT-Advanced) standards are available for 4G.
    ETSI, ATIS, 4GPP are all working on this. VirnetX will supply the 4G security.
    --Cyber Security Bill gets passed into law requiring a Secure Domain Name Registry
    which Virnet’X 504 patent covers.

    If you read the above you will understand why you do not want to be short or out of your long position. This is the real deal.

    (p.s. a thanks to flyersdh for his help in compiling this list.)
    Apr 13, 2011. 07:53 AM | 10 Likes Like |Link to Comment
  • VHC's new patent provides leverage in potential buyout negotiations. [View instapost]
    johnford, you have written about a possible settlement and/or buyout but have you any idea if we will see Analyst coverage by a major Wall Street firm?

    4G is heating up and Release 10 of the 3GPP alliance is focusing interest on companies that have foundational patents crucial to 4G.

    VirnetX has the 4G security patents.

    While possible updates from stock pickers and investment letters like Konlin, Dawson James, and Oakley’s Wall Street Corner, who have all covered the stock in the past are a possibility, a major firm would certainly focus attention on VirnetX.
    Apr 8, 2011. 07:18 PM | Likes Like |Link to Comment
  • VHC's new patent provides leverage in potential buyout negotiations. [View instapost]
    Thanks for your update.

    Johnford you write:
    "The word on the street is that VHC is currently in negotiations with potential buyers at a share price of between $40 and $60."


    "Another rumor among Wall Street investors is that a number of patent infringement settlements will be announced soon, meaning within the next three months."

    Could you add any more details as to who are your sources and comment on their credibility?

    Apr 5, 2011. 10:42 AM | 1 Like Like |Link to Comment
  • VirnetX Opens Door to Licensing Its Multi-Billion Dollar 4G Patents [View article]

    Sorry you missed out on the huge move in the last 2 weeks…you left a ton of money on the table.

    Not sure what you mean by the ‘value’ being “capped at a price target lower than here.” Who or what is capping the value?

    The Russell Index funds managers do not deem a company worthy of inclusion in their indexes as you assume. It is based on a formula that looks at the market cap of the stock outstanding (or float) in a ranking system of the top 4000 companies in the U.S.

    When funds like the Vanguard Group which owns 1.7 million shares and Cannell Peter B Company which bought-up a million and a half shares in the 4th quarter alone, throwing down a twenty million dollar bet, it should be obvious to even the most novice of investors that these investment firms did their homework, and did profoundly more in-depth research than you are capable of.

    My target price for 2011 is $45.00 share. You should consider buying back your position now or don’t look back…you would just feel terrible.

    Apr 3, 2011. 10:43 AM | Likes Like |Link to Comment
  • VirnetX Opens Door to Licensing Its Multi-Billion Dollar 4G Patents [View article]
    Articulator, you seem good at asking questions.

    I have one for you. I have been accumulating VirnetX stock from $1.19 and continue to do so.

    Along the way there have been a parade of people criticizing VirnetX saying that they were not short the stock, only trying to prevent investors from being separated from their money

    You state “Having one biased voice being echoed across the investment community will lead to a lot of people losing money in the process” in response to Dustin’s article. So my question is:

    If all of you fears about VHC’s patents, court cases, 3GPP etc. were valid why has institutional ownership risen to over 20% of the company in the period I have owned the stock?
    Apr 2, 2011. 09:29 AM | Likes Like |Link to Comment
  • VirnetX Expands Scope of Patent Case [View article]
    Dustin, I am hoping you are going to follow-up your previous posts on VirnetX in light of VirnetX’s coming out Declaration.

    In the March 16th press release Kendall Larsen makes it crystal clear that VirnetX has now announced to the LTE/4G member companies that it expects ATIS and ETSI to publicly recognize its patents as essential. I feel very few who read this press release understand its import.

    VirnetX Updates Patent Declaration to 3GPP for LTE/4G Security
    Posted on 16. Mar, 2011 by admin in Press Releases
    Declares “RAND” Licensing

    SCOTTS VALLEY, Calif. – March 15, 2011 – VirnetX Holding Corporation (NYSE Amex: VHC), an Internet security software and technology company, today announced that it has submitted a Statement of Patent Holder with the Alliance for Telecommunications Industry Standards (ATIS) and European Telecommunications Standards Institute (ETSI), supplementing its prior statement of December 1, 2009, identifying patents and patent applications that may be relevant to the following specifications in the 3GPP LTE, SAE project:
    1. 3GPP TS 33.203, “3G security: Access security for IP-based services,” Release 10 or Prior Release
    2. 3GPP TS 33.210, “3G Security: Network Domain Security; IP network layer security,” Release 10 or Prior Release
    3. 3GPP TS 33.328, “3G Security: IP Multimedia Subsystem (IMS) media plane security,” Release 10 or Prior Release
    4. 3GPP TS 33.141, “3G Security: Presence service; Security,” Release 10 or Prior Release
    3GPP TS 33.222, “3G Security: Access to network application functions using Hypertext Transfer Protocol over Transport Layer Security (HTTPS),” Release 10 or Prior Release
    VirnetX has indicated that it is willing, upon request, to make available a non-exclusive license under what is commonly referred to as RAND (reasonable terms and conditions that are free of any unfair discrimination) with respect to necessary claims that may issue from VirnetX’s identified patents and patent applications for the above specifications to the extent adopted as a final standard, subject to the conditions set forth in the Statement of Patent Holder.
    “This Statement of Patent Holder is a significant step for VirnetX that has come about from our 4G pilot and Secure Domain Name Initiative efforts,” said Kendall Larsen, VirnetX CEO and President. “It identifies the 3GPP Series 33 security specifications that we believe our patents and patent applications pertain to. Furthermore, we have announced the availability of our RAND licensing to ATIS and ETSI and are now willing to entertain licensing discussions for these 3GPP security specifications.”
    Mar 23, 2011. 01:09 AM | 1 Like Like |Link to Comment
  • VirnetX Expands Scope of Patent Case [View article]
    Thanks again Dustin,

    Do you have any idea of why Judge Davis asked the parties if they would consent to a trial before Judge Love? Any thoughts on Judge Love?

    Also, It would be helpful if you could post the CISCO infringement info. I am looking for a connection between CISCO's SA 500 Series Security Appliances and its use of VeriSign's Identity Protection (VIP) in light of today's following news:

    Feb. 9, 2011 (Marketwire) --

    MOUNTAIN VIEW, CA -- (Marketwire) -- 02/09/11 -- Symantec Corp. (NASDAQ: SYMC) today announced that it has worked with Intel Corporation to integrate Symantec's VeriSign® Identity Protection (VIP) credential into the Intel® Identity Protection Technology (IPT) found in 2nd Generation Intel® Core™ processor platforms including Intel® Core™ vPro processors. Used in tandem with a username and password, this credential enables strong authentication to enterprise, partner and consumer applications. Intel IPT with VIP strong authentication will be available in March 2011 on select systems that include 2nd Generation Intel Core processors.(1) ...

    Info on Cisco SA 500 Series Security Appliances:

    All-in-one device: Combines firewall, email and web security, and secure access in one box.
    Secure wireless and remote access: Easily allow mobile workers and branch offices to remotely and securely access the network with flexible and easy to use built-in VPN support.
    Low overhead: Reduce costs associated with deployment and ongoing management and monitoring of the security solution by using a single, easy-to-install, easy-to-use solution.
    Affordable service coverage: The Cisco Small Business Pro Service delivers service value and peace of mind at a price you can afford.
    Optional email and web security capabilities provide additional layers of security:
    o Trend Micro ProtectLink Gateway is a cloud-based service that provides strong, automatically updated email and web security to help block spam, viruses, spyware, phishing, and inappropriate web browsing.
    o The optional VeriSign Identity Protection (VIP) support provides an easy and effective second level of authentication before granting remote network access.
    Feb 9, 2011. 08:23 PM | Likes Like |Link to Comment
  • VirnetX Expands Scope of Patent Case [View article]
    Thanks Dustin for the update.

    Could you add a few key quotes from the court filing on the expanded scope of the lawsuit?

    By the way, any new information on the Pacer "NOTICE REGARDING A SCHEDULING CONFERENCE" that should set a date for the Markman hearing and possibly a trial date?
    Feb 9, 2011. 09:35 AM | Likes Like |Link to Comment
  • Trial Update: VirnetX vs. Cisco et al [View article]
    Dustin, thanks for the update:

    You write: "In the current litigation, Cisco et al argue that the examiner threw out Aventail after being unable to successfully find a specific date to pin down Aventail as ‘prior art’".

    Could you provide a link or cite a reference to your review of the legal pleadings.

    Nov 1, 2010. 09:21 AM | Likes Like |Link to Comment
  • VirnetX Holding Corporation: Wireless Security Giant or Mere Troll? [View instapost]
    VirnetX is the best performing Russell 3000 year to date.

    Too bad Saul did not follow-up on this company...he missed a real winner.

    You have not missed the boat it is still a buy. The stock has still not met my short term target of $25.00. Should happen by the end of the year.

    One year target $50.00 share.
    Oct 1, 2010. 01:33 PM | 1 Like Like |Link to Comment
  • VirnetX Holding Corporation: Wireless Security Giant or Mere Troll? [View instapost]
    I would not wait for Saul's next article on VirnetX.

    Buy the stock now, this company has a lot of irons in the fire and I expect some interesting developments in the near future that will further validate VHC's business model.

    This stock should be one of the top tech gainers this year.
    Aug 12, 2010. 01:32 PM | 1 Like Like |Link to Comment
  • VirnetX Holding Corporation: Wireless Security Giant or Mere Troll? [View instapost]
    My comments on SaulK’s instablog critique:

    1. “Reverse merger”: don’t see that as a negative. VHC cut a deal with a shell company to get listed and it allowed them to raise capital. An IPO was out of the question for a company battling for IP and patent rights.

    2. “No real Venture Capital”: they avoided stockholder dilution and loss of control that would have entailed.

    3. “No revenues or contracts (except MSFT now-- a big plus) in over 4 years”: well SaulK
    overlooks the fact it took VHC that long to prove in court that its patents are valid. No infringing companies were willing to start paying for what they were already using until the patents were confirmed.

    4. “Gigantic competitors”: true, but I see that as a positive. When VirnetX get bought out it is going to take someone with really deep pockets.

    5. “Nothing but the CEO's word that "they own the technology" and have "no competition": If anyone knows of a competing set of products or patents I would like to see them.

    6. “ The only analyst who seems to be covering the company is an unknown whom they had to pay”: I intend to call the company to confirm that statement.

    7. “12 employees total”: add to that those under contract or on retainer: IP Capital; and the Mc Kool Smith legal team (the number one rated IP litigators in the country).

    8.“Hundreds of thousands (or maybe even millions) of 4G devices already sold, with no apparent need for their technology?”: SaulK already answered that when he quoted Kendall Larsen: “The Cybersecurity Act calls for the use of a secure domain name system, which is what VirnetX’s technology provides. VirnetX and our SDNI [Secure Domain Name Initiative] partners can deliver what the government is mandating for a secure Internet using secure domain names. Existing domain names will be able to move to a new secure domain name and devices will have their own secure domain name so owners and operators can transmit data securely and in real time – safe from hackers and thieves,” says CEO Larsen.

    9. “They are Beta testing their Gabriel product with a tiny .OB company”: not sure that is still the case. The
    collaboration SaulK is referring to was announced last year. There very well could be others.

    10. “SAIC, the company from whom they licensed their patents, seemingly gave away the patents for next to nothing”: SAIC made tens of millions on the MSFT settlement.

    11. “share price is lower than it was 2 years”: that will take care of itself with the next licensing agreement

    Sentiment : Strong Buy
    Jul 20, 2010. 01:36 AM | 1 Like Like |Link to Comment