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Momo hasn't even begun. Have recommended VRNG to everyone I meet and without exception all react, "what's that?" They look at the typical pinky boilerroom website with the cheesy Justin Bieber ringtones and get spooked and scream WTF? But that's all about to change. Family members are in town now. To get an idea of what's about to blow, look at the VNDA chart from 5/4/09 and you'll have a better picture. GLTA
Uhhh...yeah. could be $10 a share buyout was already turned down shtiller haight. also appears nokia may be the new vehicle to roll out the next gen proprietary i/p engine technology of the company in development. glta
So if revs = $47.5b x .21 x .035 = ~$350m, then how come VRNG's market cap is still $126mil??? The S/P should be at least triple what it is now. And this doesn't even consider the ZTE settlement which may be as large if not larger. GLTA
Hear ya; was worried about paying capital gains until last thursday when i was given a $5k kick in the gut. I don't care how many affiliates get signed when they'll always be accompanied by a "oh snap, had to double the A/S and write myself a half billion share 'blank check.' Disgusting, f'n disgusting. Gltu
At least we can agree on that. I am also not a crook. Got robbed of $5000 one week ago today with icpa. Bought in here one week ago Friday morning at $3.41. Hoping to get my nest egg back together. We're really on the same team :) GLTU
"and thanks for another day of cheap thrills YEA and thanks for another day of cheap thrills you, whoever the F you are!" I just happen to take offense because you are clearly writing to a singular entity, and as it was a response to my post, it could be easily construed as directed towards me. I don't like being cursed at. I get cursed at every night when i get home, i sure as hell don't look forward to getting cursed at on ihub.
WTF? Learn how to string some words together in a coherent sentence.
You're probably correct, but what will it take to get this thing in the northernly direction? Unbelievable. :(
You said it. The extended trading is the only place to get fair value. Looking for $4.25 by 8:00pm. Glta
What up with the outrageous manipulation? This should be $5+
Just sayin'....Anyone here since July has seen NutraBars in the flesh and knows they're real and knows Duane Reade / Walgreens is just around the corner. Well now we are at the f'n corner and this baby is going to deliver major bank. Gltal
Let's get ready to ruuuuummmmble! :)
$5 is way too conservative; more like $8-$11. Glta
Thing that irks me is that the potential was staggering, but insider greed got out of control. Same thing happened with neom, a great technology with awesome potential shot down by the insiders flooding the market with shares. Oh well. Glta
Sorry. You were and are correct. This is really a boiler room share incubator. Better late than never. All the best.
Why didn't you post this two weeks ago and saved me $5000???
"why would I follow someone who has less of a stake than I do? someone who has less of a stake than I do?" Lmao yeah....you have more than 20 mil in vrng. Lol
That's what I'm talking about!!! YLLC $$$$$
Well....I'll take 100%, and we have nowhere near the float of bio-whatever, so I'm cautiously optimistic about a decent nearterm bounce. :)
I'm already in so no worries...glta
Last time the pumpers arrived yllc rocked 300% get ready to make $$$$ bank :) glta
Get over it. It's "patent tolls," not t**lls. Google stole their search engine from lycos, who probably took it from infoseek, but that's another story. Maybe Marc Andreesen should just sue everybody and we'll get to the end of the line. Bottom line vringo is in the RIGHT and google in the WRONG. Glta
Jackpot Stock Pick for 11/20!!! GLTA
Are you kidding? In biotech land companies wait two years from phase 1-3 trials until an fda decision. We're talking about 2 weeks! 12/10 is nothing. The only concern is the news is rarely as good as the rumor, so the lower the settlement expectations, the greater the chance of the stock launching northward when expectations are exceeded. Glta
It tells me that the manipulation is out of control. Eventually the flippers will find something else with a better margin to play with. Aapl was the same way friday, over the top manipulation by options trading. Now that's done for a while we can reset the market valuation of the actual company portfolio. We're very close to that point. Six more weeks max. :) glta
Vringo: Could It Be Worth $2 Billion?
November 16, 2012 | 162 comments | about: VRNG, includes: GOOG, MSFT, NOK, YHOO
Disclosure: I am long VRNG. (More...)
Finally! It's over. The binary event of a win versus loss against Google (GOOG) is now over. And Vringo (VRNG) won. So what should Vringo be worth right now? Now that they were the complete winner. Let's clear up all the misinformation.
For instance, many articles make this erroneous quote: "Vringo won a $30 million settlement from Google." I was sort of hoping that the weak hands in Vringo would all dump VRNG into the $1s and maybe I would then buy up the entire company. Or something like that.
But unfortunately there are a few smart people who are preventing that from happening, so I might as well correct the mistakes.
Let's just break it down. I'm going to do the worst-case scenario, the middle-case scenario, and the best-case scenario of what I think VRNG is worth. I personally think VRNG is worth the best-case. But you can decide what you want.
Worst-case Scenario
Let's do a sum of the parts.
A) Cash in the bank: $60 million.
B) Cash awarded to them from Google: $30 million (see why I do not think it's less than that below). By the way, this is where the news reports discuss "VRNG won $30 million." Because $30 million is the "damages."
C) 3.5% royalty rate. The royalty runs from September for the next 4 years, until the patent runs out. Worst case, it's $30mm (equivalent to the damages). I say "worst case" because the jury sort of picked out that $30mm arbitrarily and it's actually much larger than that number as documented here and here. But forget those articles for a second. Let's just assume that it's $30 million per year. That's $120 million.
Most news reports have failed to report a number here. I am giving the worst possible scenario here. It's so unbelievably "worst case" that it's barely worth mentioning but I mention it in order to show the risk versus reward.
D) The Nokia (NOK) patents. I've written about this before. It's worth between $200 and $400 million. I give reasons in the above article. Let's take the worst case and say it's worth $200 million.
E) Vringo successfully sued Google. Now I'm assuming they would do what any other patent holder will do and sue Microsoft (MSFT), Yahoo (YHOO), and all of Google's customers. I'm taking the worst-case: let's say that's worth ZERO. Unlikely, but we're all about risk versus reward here.
F) Let's also assume Vringo never does meaningful with its pitiful life ever again. And just collects their money, dividends it all out to shareholders, and then everyone retires to the beach.
Worst-case scenario sum of the parts: $410mm. That's a share price of about $3.80. Maybe a little higher than where we are now. That's what I view as the cash value of the stock, worst-case. You have to discount that back a little bit since they don't get all the Google and Nokia money at once, but you can decide what you want that discount to be.
Medium-case Scenario
"A" and "B" from above remain the same.
"C" is changed to $120 million a year for four years. See here for a good explanation as to why. Essentially, it's a 3.5% royalty on 20% of Google's US revenues. So "C" now is $480 million.
If you want more evidence for that number, look at documents filed by both Google and Vringo during the court case. Essentially you want the part of Google's US revenues that their smart ads are applicable to. Here is one document describing it as 20% of Google's revenues: (go to slide 8)
"D" remains the same. I'm going to stay conservative on the $200 million. Why not? It's only upside and I care more about losing money than making money.
"E" What will they make from Microsoft, Yahoo, and all of Google's customers. I have no idea. MSFT + YHOO + the revenues of all GOOG customers is probably about half of Google's US revenues when all added together. There will be some litigation costs, but it will be minimal. Many will settle and Vringo, as investors who have done their research know, did not spend a lot on this litigation (about $5 million total). So we can take the $510 million number ("B" and "C" from above) and divide it in half. But let's even be more conservative. Let's divide it in half again. I like to be safe.
So that's $130 million.
"F" we will still assume is nothing. Assume those Vringo guys are a bunch of lazy bastards eating donuts and suing Google and that's about it.
So what's our medium case sum-of-the-parts: $700 million or about $6.40 a share. Almost double form here.
Best-case Scenario
"A" through "E" is about the same as above. You can be a bit more aggressive on "D" and "E" if you want, but I like to be conservative.
"F" is interesting and somewhat subjective. Let's look at the two actions VRNG has done since changing management a few months ago.
They bought the Lycos patents for $3 million, spent about $5 million on litigation and won about $510 million (so far. They will win more, as mentioned in "E" above). So about a 60x return on their cash. Probably more like an 80x return when all is done. But let's be conservative.
On the NOK portfolio, they structured a deal that was cheap for them ($22 million) to buy a portfolio by which they will have about 10x benefit. Why did NOK sell for so cheap? For reasons already explained, Nokia benefits by having Vringo own the portfolio rather than Nokia. So Nokia wins huge in this deal, as does Vringo.
So we've established that Vringo knows what they are doing when it comes to patents. Plus they have Don Stout on the team. David Cohen, who was Nokia's chief litigator in the US, is the chief litigator for Vringo, and a technologist like Ken Lang to pick through the patents and see where the value is. Now that they won this case, my guess is they are being pitched non-stop by patent companies and they will have their pick of the litter on who to buy.
So the question is: what is the value of the $700 million in cash they will eventually have in the bank. It's clearly not $700 million, based on how successfully they've been able to put their cash to work. Is it 60x? Probably not. The Google outcome is probably an extreme. Is it 10x. That's probably more likely.
Do I think VRNG is a $7 billion company in the making? That seems too unrealistic at this point. Too many unknowns. So let's discount that down 70%. Instead of putting a 10x multiplier on their cash (which, by the way, the market put a 10x multiplier on patent company VirnetX's (VHC) cash) let's just put a 3x multiplier on it.
$2 billion.
Or about $18 per share. Discount that back however you want. I was already being pretty conservative.
I think the ultimate risk-reward on the stock is between the medium case scenario above and the best-case scenario. Or about $6.50 to $18. You can even take the worst-case scenario above and you still have almost no risk on shares at this point.
So, some basic Q&A:
- Why did the shares go down? I called several retail investors who owned the stock right before the verdict. I asked them, "Are you going to buy more on a positive verdict?" 100% of them said they were going to sell. They all wanted to sell "the pop."
In other words, everyone who was an investor for the court case, had ALREADY BOUGHT their shares and were waiting to sell. It was a classic "sell the news."
Now the shares are trading hands and going in the hands of long-term shareholders. How do I know? Because when I look at the $45 million they raised before the verdict, I see it was an institutional round and not a retail secondary. Institutions were buying this at higher prices while retail was selling it at lower prices. The weak hands are getting out and the stronger hands are getting in now.
- What if Google appeals? If Google appeals, then Google might have a problem. Vringo can appeal the laches rulings (which limited the past damages) and Vringo can appeal the jury verdict, which it now appears was a mathematical error that won't be corrected. (More on the laches rulings here). Meanwhile, the cost to Vringo on any appeal is close to zero. Some people have said that "Google can appeal this for years…" And my response: change that to "year." That's the law. Look it up. The Supreme Court won't take this, so there's only one court to send this to.
- Is there any other upside? Yes, huge. If VRNG sues MSFT, YHOO, etc., the laches which limit damages no longer applies. Damages can go all the way back to 2001. And if we avoid any mathematical errors, the numbers can be much larger. In the above, even in the best-case scenario, I took a very conservative estimate. It might not be so conservative in the real world. But better safe than sorry.
When I first wrote about this stock, it was about $1.80. Now it's $3.67. It's been as high as $5.75. People played this with various strategies. I hope people made a lot of money. But, now we are here and we have to decide what to do. I like the risk-reward a lot. I think there is very little downside now.
We are past the binary event of a jury verdict. It's over. Vringo won. And it wasn't a $30 million settlement. It was more like a $500 million verdict. Figure out the exact cash Vringo is going to have. Figure out what they will continue to make. Compare with the current market cap.
Good luck investing.
You can research the art of trading options through google....lmao, oh, the irony. :)
True, true...definitely a good bet :) gltu
Looks like the calls won over the puts, but both didn't work out; p. .01 c. .05; lets get back to trading stock. Lol
No genius....i lost half my money on icpa yesterday and i'm gonna make it all back here. Lol
$3.80
$3.63
Are you kidding me? The stock is at 0039 or exactly half the wed close of 0078 b/c the ceo doubled the a/s w/o giving a heads up to the shareholders first. Not too classy.
Ditto....hold on for the ride. Will touch 4 before settling back at 3.50. Daytraders paradise. Glta
It's fairly simple; everyone is greedy and wants to get in at the lowest possible price to maximize the greatest potential gain following the judgement. It's a game of chicken and eventually one car will veer off into the ditch while the other will drive away with a ten 3-5 bagger. Once the numbers are released, everyone else will rush to settle instead of relying on a judge's award. This is a money producing factory. It's going to get really fun next month. VRNG $$$$$
Well, good to hear its in the pipeline. I believe traveltech would be a good fit for greyhound and amtrak. Please consider it. Right now they have nothing. Its a no brainer. Gltu
and Do you plan on signing with direct tv and expanding traveltech to greyhound stations?
Do you plan on signing with direct tv and expanding traveltech to greyhound stations?