One Man's opinion of the potential for VRNG's stock price....
Outstanding shares : ~100 mil
Award: ~500 mil
Current price per share :~ 3.75
To attain what the price per share will be adding in the 500 mil $ award;
500mil / 100mil shares = $5
You then add that number to the current price per share;
5+3.75 = $8.75 a share.
Multipliers are then given to companies who can prove their business models are sustainable and can generate substantial revenue. A multiplier can range from 1,2,3,4,5,etc.
8.75 x 1 = $8.75 pps
8.75 x 2 = $17.50 pps
8.75 x 3 = $26.25 pps
8.75 x 5 = $43.75 pps
8.75 x 10 = $87.50 pps
Keep in mind, I rounded up to 500mil from the 496 mil that Vringo is asking (legal costs will be covered by google, not the award). This number that they are asking does not include future royalty fees, and interest. Vringo is asking for a 3.5% royalty fee. At the beginning of the trial, Vringo was asking for a 696 million dollar award from Google, for just backdated revenues. Google has profited 69 billion. It seems that Vringo was asking for 1%. It was then announced that Vringo was only asking 496 mil. Google's ad revenues immediately increased by about 20% by infringing on Lang's patent. So they are asking for 3.5% of the 20% increase, which comes out to be 496 mil. But lets just use the original 1% royalty rate to be conservative and safe.
In 2011, Google earned 37.9 billion in revenues, 96% of which came from advertising. So Google made 36.38 billion from advertising in 2011. If revenues remain CONSTANT for the next 3.5 years, that is 109.14 billion in revenues for the next 3.5 years. Keep in mind, Google has a pretty constant growth of advertising revenues. 2009 to 2010, growth of 23%, 2010 to 2011, growth of 29%, and for the first 3 quarters of 2012, average growth of 20%. My numbers do not take google's growth into account.
Google revenues for the next 3.5 years: 109.14 billion
Vringo royalty percent: 1%
109.14 billion x .01 royalty fee = 1.1 billion in future revenues.
Then lets add in the initial 500mil award
1.1bil + 500 mil = $1.6bil
$1.6 billion / 100 million shares = $16 a share including future royalty fees.
This number does not include a multiplier, which will most likely be awarded. It also does not take into account google's growth for the next 3 years. And it also only uses a 1% royalty fee.
16 x 1 = $16 pps
16 x 2 = $32 pps
16 x 3 = $48 pps
16 x 5 = $80 pps
16 x 10 = $160 pps
Cameron Trial
