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Wednesday, July 30, 2014 7:52:01 AM
Marathon Patent Group, Inc.
MARA: Price: $11.65; Market Cap (MM): $65
Rating: Buy; Price Target: $17.00
Amit Dayal
Pursuing A Diversified Patent Monetization Strategy; Initiating With A Buy
Overview We are initiating coverage on Marathon Patent Group, Inc. (MARA) with a Buy rating and a 12-month price target of $17.00. MARA is a patent acquisition and licensing company, which acquires and monetizes intellectual property through both the prosecution and licensing of its patent portfolio. We believe management’s emphasis on generating stable cash flows from its diversified portfolio through actively managed concurrent licensing campaigns, rather than a reliance on the unpredictable outcome of any specific lawsuit differentiates it from other competitors.
Leveraging Broad Patent Acquisition Strategy Investors should expect MARA to cast a wide net for its patent acquisition to include all providers and owners ranging from individual inventors to Fortune 500 companies. The company’s patent supply pipeline is supported through its relationships and network within the industry ecosystem that includes patent brokers and dealers, inventors, patent owners and entities that own patent portfolios.
Combining Licensing and Litigation MARA typically avoids approaching infringers (potential defendants) in an antagonistic fashion. Management’s initial view is to approach potential defendants as potential licensees with the objective of executing a license agreement by demonstrating evidence of its claims and the value of MARA’s patented technology within the defendant’s product offering. If this friendly approach does not gain traction, management then moves forward with litigation. Using this approach management hopes to reduce time to monetization.
Opus Analytics Could Create Material Revenue Diversification Marathon has been working towards building a commercial version of an internal IPNav platform that streamlines the workflow for undertaking IP diligence. A successful market adoption of this service could be a very important catalyst for MARA and also provide a major differentiating factor in an industry that the World Intellectual Property Organization estimated was generating $180B in licensing fees in 2009 alone.
Valuation We believe MARA provides investors with an opportunity to benefit from the monetizing of a diversified portfolio of patents through actively managed concurrent licensing programs. Management’s friendlier strategy of pursuing licensing first and then litigation enables quicker monetization of assets. Its strategic relationship with IPNav allows for multiple licensing campaigns without substantial increase in overheads. We believe future growth will be driven by the company’s ability to continue building a relevant portfolio of monetizable patents and the success of initiatives such as its Opus Analytics platform for IP and finance professionals (expected launch in 4Q14). The company’s recent up-listing to the Nasdaq should allow the stock to be considered more easily for inclusion in institutional portfolios. Because, MARA is in the early stages of commercialization, we use a DCF analysis for our valuation. Our analysis leads us to conclude that MARA should be fairly valued at $17.00 per share (pls. see Valuation section for DCF assumptions).
Risks – 1) Evolving regulatory environment; 2) Acquisition Risks; 4) Execution and partnership risks.
Recent MARA News
- CleanSpark Acquires GRIID, Marathon Digital Mines Kaspa, VanEck Proposes Solana ETF • IH Market News • 06/27/2024 07:45:08 PM
- Marathon Digital Holdings Announces Kaspa Mining Operations • GlobeNewswire Inc. • 06/26/2024 08:05:00 PM
- Standard Chartered Launches Bitcoin and Ether Trading Desk; Marathon Digital Heats Finnish City • IH Market News • 06/21/2024 06:36:31 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 06/20/2024 01:00:13 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/15/2024 01:43:48 AM
- Robinhood Acquires Bitstamp for $200 Million, Binance Reactivates Mastercard Purchases, and More Crypto News • IH Market News • 06/06/2024 07:37:01 PM
- Bitcoin Surpasses $71K Mark as US Bitcoin ETFs See $886 Million Influx, and More in Crypto • IH Market News • 06/05/2024 07:24:57 PM
- Marathon Digital Holdings Announces Bitcoin Production and Mining Operation Updates for May 2024 • GlobeNewswire Inc. • 06/05/2024 12:05:00 PM
- Form 10-K/A - Annual report [Section 13 and 15(d), not S-K Item 405]: [Amend] • Edgar (US Regulatory) • 05/24/2024 08:57:52 PM
- Marathon Digital Holdings Enters into Agreement with the Ministry of Energy and Petroleum of the Republic of Kenya To Enhance Kenya’s Energy Sector • GlobeNewswire Inc. • 05/24/2024 03:23:00 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 05/15/2024 07:50:51 PM
- Inactive BTC Wallets Transact $62.8 Million, Degen Chain Faces Shutdown, and More Crypto News • IH Market News • 05/13/2024 05:04:14 PM
- Weekly Surge for Render and Toncoin, US Bancorp Expands Bitcoin ETF Investments, and More in Crypto • IH Market News • 05/10/2024 07:32:06 PM
- JFrog and Akamai Drop Over 10% Despite Strong Profits; Sweetgreen, Array, SoundHound Surge, and More in Earnings • IH Market News • 05/10/2024 11:58:39 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 09:00:09 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/09/2024 08:17:02 PM
- Marathon Digital Holdings Reports First Quarter 2024 Results • GlobeNewswire Inc. • 05/09/2024 08:05:00 PM
- U.S. Index Futures Dip, Bank of England Holds Interest Rates at 5.25% • IH Market News • 05/09/2024 11:47:20 AM
- Tellor Tributes Skyrocket 104% in May, Marathon Digital Set to Enter S&P SmallCap 600, and More Crypto News • IH Market News • 05/07/2024 06:48:02 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/06/2024 01:05:36 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/06/2024 01:05:29 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/06/2024 01:05:26 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/06/2024 01:05:22 PM
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