Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

What's the real value of VHC?


If a buyout is in order, what is a fair price?.  Here's what we know.

One: the current patent infringement lawsuits are estimated at $1 billion.

Two: the estimated annual licensing revenue for VHC is $1 billion annually.

Three: the price tag that I am hearing on the street for a buyout is $50 per share.

Four: Siemens, Apple, and Cisco are sitting on about $75 billion in cash (about $25 billion each).

Many longtime shareholders believe, a $50 price tag is too low.  That puts the value of the company at about $2.5 billion, or one half times potential annual licensing revenue.

We have to keep in mind that right now we are only looking at potential revenue.  If VHC were earning $1 billion annually now, the price tag would probably be closer to $100 per share. But the good news is that the companies that they are negotiating with now, do have the cash to buy VHC, and if that happens, shareholders will definitely benefit.

On a side note, take a look at today's options, particularly May calls.  Very aggressive buying!  If this is the result of an information leak, it looks like there could be an announcement before May expiration.