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If a settlement/buyout is reached today, I expect a halt in the early afternoon and a resumption of trading for power hour. GO VRNG
I don't see any problem here - the market is already valuing the shelf into the PPS and we've stabilized for the most part. I would be concerned if we breached 4.35/4.4, but the play is still for a settlement/trial win.
I ran the quick numbers of the market's valuation of the shelf:
Yesterday close: 5.25 * 58,200,000 O/S = 305M
Today's close: 4.54 * 68,544,000 O/S = 311M
I don't think we're going to see these 10 million shares be dumped into the open market. They will likely be held through the next significant event: settlement or trial win. The next event is now the settlement conference, which is where we could see some tree shaking IMO. If Vringo puts out a PR Wednesday morning that the settlement has been reached, though, all bets are off. GLTA
Ah, Columbus Day. I wish I received a day off for Columbus Day!
The more I contemplate this offering, the more I like it. Vringo seems to have a plan as to how this is going to go, while Google continues to flounder. If Vringo was desperate for money, why not empty the whole shelf right away? They're saving the last bullet for a settlement/trial win. By waiting until SJ was denied, they actually saved more shares from entering the market. I don't think they realized that the stock would continue to run the next day, or they could have saved even more shares.
There's only two reasons why Vringo wanted to unload another bullet from the shelf: they wanted to send Google a powerful message that they are ready to do what it takes OR they are also having more patent acquisition talks. Regardless, now is NOT the time to be out of this stock and, IMO, the price of this stock should not dip below $4 unless a Google miracle comes into play.
The wild card right now is this new filing from another company litigating against Google. If the judge grants their motion to unseal documents, Google is screwed and will be forced to settlement before trial. That's our ace in the hole right now, so hopefully there will be a quick ruling on it Monday to increase our leverage in the situation.
What happened today was surprising, but not unexpected. We all know the potential of the company, yet I figured that we would ascend slower than this. My main hope after we crossed $5 was that we didn't cross back under. I still hope that continue to hold $5 on strong volume, but a pullback would be healthy for the chart at this point. Still, we're running out of days before more substantial things happen in this trial. A move to $10+ is now easily achievable if settlement/buyout news hits the wires. We're also more likely to hold that number if we continue to churn this level. A 3rd day rise of this magnitude would be unprecedented for this stock, but it's completely possible that the market still hasn't found an equilibrium to balance at. Tomorrow's trading should be very telling as to the market sentiment for likelihood of upcoming news.
You see, this is the problem with idiots writing articles. As far as I'm aware (and I've been following Vringo for 6 months or more), there have never been options dated OCTOBER 12TH. There are options dated October 20 (which I hold) and November 17th. People are spread this type of disinformation should be held accountable.
The October 20th option holders have enough time to wait until trial begins, in which I think we will hear of a settlement. I said a week ago on this board that I thought we would see a settlement in the October 8-12th date range. Google will want to want to settle at the last minute, so these options are dated perfectly for settlement/buyout news. I realize that the people writing these article also cover a lot of other stocks, but that doesn't excuse doing five minutes of DD and proofreading their articles before submission.
I'm stilling holding all my options for the big payday down the road. The next step that will make this play feel even more secure is to churn the $5 for a while and build a new base, then move higher again. I'm a bit nervous that we might see a sell-off tomorrow due to momentum traders hitting their gain percentages, but I am extremely happy with the movement of the stock now. All we need is the settlement/buyout PR and we're golden!
We've reached a new base of roughly $4 IMO. I would love to continue churning in this area until Oct. 9th. We should know settlement details shortly after. It's my personal opinion that Vringo would gladly accept $500M before trial and I think Stout will play hard ball to this number. If this goes to trial, I think Vringo should see it through on the prospect of triple damages. A 500M settlement tag + 75M a year royalty would yield 400M (20% goes to lawyers) + 300M = $700M. Our market cap is roughly $230M right now, so it would effectively quadruple our current share price. I don't think Vringo will settle for much less than 500M.
Disclosure: I'm still holding all of my October calls. Long VRNG
This party is just getting started. It's not a coincidence that someone bought 4,500 $4 Oct contracts a couple days ago. I think a settlement has a 75% chance of happening before October 16th. This is a huge day for all VRNG stock/option/warrant holders and it validates months of research and patience on this board. If a settlement hits and this goes to $10+, I'll be printing out the PR and framing it with a 1 dollar bill to commemorate my largest options win ever :)
Good point. I was just playing with the NTP settlement number and it felt close to this current damage total so I thought I'd throw it out there. Your reasoning seems more plausible though.
Also, just a theory. Is the $696M in damages based off of Stout's settlement with RIMM? In 2006, they settled for $612.5M. Stout could be basing his damage amount off that number, building in 2.2% of inflation over a 6 year period (average inflation amount over that time. I think Stout is planning on modeling this entire trial after the one with NTP, which is a great strategy considering he won with it before. The parallels are certainly uncanny.
As far as the facetone business, it's not the money maker. Vringo was previous burning cash if I remember correctly, so I think their main focus for income will be through litigation of patents in their portfolio.
I believe Nokia gets 35% of the revenues above $22 million dollars if VRNG gets settlements from their patents, but that's still a substantial amount of money to pay for future court costs as well. I think with the money made, Vringo will look to add additional viable patents to their portfolio for future litigation, while also using those patents to revamp/evolve their facetones business.
Even if the rejections were somehow made final, VRNG can appeal that process and drag it out for years. Until the patents are completely invalidated, the court should assume that all the patents are valid and the claim of infringement should move forward on time.
I've done a little research on this non-final PTO issue, with regard to Stout's previous litigation win against RIMM, which also started in the Eastern District of Virginia. NTP won that case very similarly to the one being played out right now, but RIMM appealed the verdict and here's what happened during the appeals process:
NTP was dealing with non-final PTO rejections in their case against RIMM during the final three months before settlement, although the circumstances were slightly different at the time. Despite the non-final PTO rejections of their patents, the judge was planning to continue forward with his ruling and, if NTP won, they planned to order a cease-and-desist of the specific e-mail technology RIMM was using (affecting millions of people worldwide). As they approached this damages hearing, a settlement was reached.
Based on this timeline, the non-final rejections were just a settlement pawn between these two companies and it didn't stop the case from proceeding to its final verdict. As long as VRNG can get the information sealed from the jury, Google will once again fail to slow things down in their favor. And because of this conclusion, I will continue holding my October calls at a loss - a settlement will eventually come IMO. If not before the trial, then during. Google will not risk losing $1-2 billion dollars in damages awarded to VRNG, nor can they risk VRNG ordering a cease-and-desist against the technologies that Google infringes on.
If I'm VRNG, I make that point loud and clear - 'we don't care about future royalties, we want to send a message to companies that infringe on our patents. If you want to take this to a verdict, prepare to stop using your technologies when we win.'
Altucher was certain a while back that this would never even see trial, but now talks about the trial like it may actually happen. I can't understand why Google's taking this massive risk - I need to do more DD tonight. I may end up having to roll my VRNG Oct calls at a loss and start investing in some Feb calls.
I'm inclined to think that VRNG is right - the court has made it clear that no delays will happen. This could be leverage for Google to potentially lower their settlement offer before trial, though. It's an additional hurdle for VRNG to jump through but I think they will get re-confirmation.
The November 25th date strikes me a bit odd. I'm wondering now if this lessens the chances of settlement before trial. Regardless, I'm still 100% VRNG until the jury reaches a verdict (or settlement occurs). Just trying to figure out my options strategy at this point (buying calls).
S/he better be careful if he's putting out false information. Vringo may take him/her to court next LOL
I read VRNG Stocktwit updates and saw the same thing - PTO rejection of some or all of the claims on the patent would be a huge blow to this case. I'm trying to find some DD to support this individual's claims but I can't find anything either.
I appreciate your answers to my questions. Go VRNG!
Wow, tremendous story and an interesting read. Thanks for it! I still remain confident that Google will settle right before trial but I am prepared to load calls during trial as well.
Could a settlement or buyout occur DURING the actual trial? This is one aspect of trials that I'm unfamiliar with. It seems to me that being on the rocket docket, there would be extremely limited time to negotiate a settlement or buyout during the actual trial.
I do think that we will hear something on the week of October 8th regarding settlement, based on the pre-trial conference. That, combined with any last minute judge motion denials (SJ, etc.), should create an idea for both sides as to how the judge sees things. That's not to say that the jury won't see things differently, but all signs current point to VRNG having a huge advantage. I agree with your sentiment that there's too much for Google to lose by taking this to trial.
Disclosure: I'm loaded on October calls and I'm prepared to hold until expiration. If we head to trial, I will load on Nov/Feb calls (depending on how long I think the trial will last). I'm embracing the high risk/high reward scenario here.
You seem well-versed with how the law, specifically litigation, works. I still hold a strong opinion that Google will settle a few days before the start of the trial. Based on these long-shot filings, do you share the same opinion?
By that theory, though, it implies that eventually you come to a zero sum (a la buying stock, holding it, and selling it all for profit or loss). In this instance, our short interest #s continue to rise, which obviously means people are shorting at the highs but not covering at the lows. Some of these people might be hedging by buying oct/nov calls, but I'd like to think that they just don't think Google will lose. If/when they do lose, the short squeeze will be incredible.
Also, doesn't a 2nd lawsuit help our chances of seeing a settlement before trial? My thought is that it would be extremely tough for their patent litigation team to fight Google in court for an extended period of time while also fighting ZTE for licensing revenues.
Has this been talked about yet?
http://www.nasdaq.com/symbol/vrng/short-interest
Total short interest as of 9/14: 7,432,484
Out of a O/S roughly 58.2M, that represents 12.77% of the stock. In fractional terms, approximately 1/8 shares are short right now. Based on a 2.45M avg share volume day, that's approximately 3 days worth of covering, a sharp increase from previous dates. While short interest continues to grow, the number of days is skewed based on a lack of volume coming in right now. Our volume over these periods has dwindled since 8/15.
Now I have a theory on these short sellers. I think they are more in tune with these proceeding than we may think. If we start to see heavier volume and the price begins to rise, I think this is an indication that people are covering for an impending settlement. I'm still of the opinion that we're going to see a settlement before October 16th, so we should start seeing this type of covering next week. I do think Google will wait until the last few days before trial before settling, which will give those that have shorted this stock a couple of weeks to cover slowly. I'm expecting a rise in PPS as we move closer to trial on this premise, but I wouldn't expect 9/30's data to reflect a smaller short interest. Thoughts?
S&P down .5%, AAPL down 1.7%.
AAPL will rebound. I'll re-evaluate then. If it doesn't, I guess my calls will be worthless. I still think AAPL will make a move north this week, but it has to rebound from this shake first.
I'm waiting it out and holding my calls. Gonna see what AAPL wants to do power hour and tomorrow.
I'm in 6 AAPL 700wc @ 1.11. Hoping to see an EOD push and gap open tomorrow. I don't think this bull rally will stop for a while!
Jimmy, AAPL back to 700 soon? Thinking about jumping into AAPL weekly 700c right before power hour and holding into tomorrow.
LVS increase a good sign for WYNN. 120 is a strong possibility, anything else is gravy!
I/P's patent portfolio, Nokia's patent portfolio (that we just acquired) and the Facetones business provide all the current valuation that is needed. There is no "baked in price" - the market clearly expects this to go to trial and from Vringo to lose. Google has a strong track record against these types of trials, but they are facing a litigation team that originated the patent (Lang) and beat RIMM in a major lawsuit years ago. You'd be a fool not to recognize the potential value here.
Well I was just citing numbers from Altucher's article. It's obvious that they are growing at a large pace and that 6.7 billion a year is probably no longer feasible. I was just trying to build my valuation along extremely conservative estimates. I also think the royalty could be 1% and the multiple could be 3-5x. It's just really hard to say, but the point of my calculations was that I still think we're looking at a $15-18 range estimate on a settlement before trial. And given what a lot have paid in share price and/or options, that would be a HUGE payday for anyone in VRNG at the news of settlement.
so $696mil X 3 = $2.088 billion dollars if the jury sides with Vringo in the case (willful infringement..triple damages).
Assuming a .5% royalty for the next 4 years, based on previous numbers of $67 billion in revs from Google as of 2001 (10 years, 6.7 billion a year on average). .5% on $6.7 billion a year is $33,500,000 X 4 = $134,000,000. Vringo will probably want their damages in the settlement ($700 million ish) + the $134,000,000 over the next 4 years. Out of that $700 mil, Vringo gets 80% (lawyers get 20%) so we're looking at a true-ish value, based on my estimate, of $694,000,000.
On share value alone (91mil shares), that represents a $7.62 per share value. Add that to today's current price of $3.25 and we're looking at $11 before any multiple is applied. I am still of the opinion that Google will settle out of court before the trial begins, probably the weekend before. Vringo could also end up settling for a bit less if they thought Google would cave more quickly, so I see Vringo's settlement range at this point being $500-700 million. At the low end ($500mil), the math still points to Vringo getting $535mil or so ($5.88/share). Apply a 2x multiple to either of these outcomes (before adding in current share value) and I'm looking at $15-$18.5 as a settlement range for Vringo. This is all just my opinion.
PS: James Altucher referenced VHC's win over Microsoft in his Sept 4th article on SA - he recalled that VHC obtained a 10x multiple when they beat Microsoft. So I think a 2x multiple is very low but I want to keep things realistic. I'm with James - if we get a 10x multiple on a huge settlement, I might die of a heart attack too lol.
Someone bought 50,000+ ORCL Oct20 $32p...
Is this a sign?
Any earnings plays tonight that people are looking at?
QCOR seems to be range bound or heading south. Conf Call was their last chance to trigger a short squeeze and they failed. Oh well, on to more plays!
QCOR conf call isn't really moving - I expect a sell-off after the conf call. I'm out with a big loss to my options but a gain in my stock.
QCOR conf call in 3 min - get ready for a roller coaster ride!
I'm long atm - still holding 3 QCOR Sept 32c from yesterday and I've also grabbed stock @ 28.5. I'm 50/50 on whether I should sell for a loss before conf call or let it ride through and potentially see another sell-off (and my options become worthless)