From Edva patent blog
Our Three Investments: VRNG, WDDD, BCYP
I was asked the other day if we had our druthers (which fortunately we do) how would we apportion our investment dollars in these three companies. This is a very tricky question and frankly I could not find fault with people seeing this in a myriad of ways. I can tell you how we see it and what we believe, and perhaps more importantly, what we are willing to risk. Our two biggest investments at this stage are Worlds (WDDD) and Blue Calypso (BCYP). You might ask why given the fact that neither has won anything yet, not even a Markman hearing, and Vringo (VRNG) has won a jury verdict. True enough. The issue is a bit complicated because you have to ask yourself questions like… how long might you be willing to stick with an investment if it looks like the “winner” might not get paid for quite some time. The other thing to understand is that while wins are paramount, not racking up losses is equally important.
I have said before that Vringo was mortally wounded by Judge Jackson’s laches ruling and the company and its stock has not been the same since. We still have a good deal invested in Vringo but our mindset has now become one that has made peace with the very real possibility that we may be sitting on that investment for quite some time in order to get what we originally hypothesized internally. We continue to believe that Judge Jackson is likely to award somewhere in the neighborhood of a 5% running royalty but we cannot 100% rule out a surprise from him that would be negative for shareholders. The positive here is that the management team at Vringo is the best of the bunch (although I would say that Mr. Kidrin at Worlds is the hardest working guy in showbiz but unfortunately it’s just him) and they have set themselves up to continue to grow and thrive.
Worlds has an incredible opportunity in front of it from the litigation standpoint. They have as close to a sure thing willful infringement case that we have seen in a while and the IP that they own is clearly intrinsic to the MMORPG space. We think that the damages equation in the case against Activision is potentially quite large (and have said so) and that should excite investors very much. Worlds has had a problem recently in the perception of its financing with Iroquois, which has now been amended quite favorably we think, as well as in announcing its intention to up-list to a respectable exchange at a future date which would presumably require a reverse split.
Investors, unfortunately some ill-intentioned, have played ping pong with the facts. Worlds has had authority to enact a reverse split should it choose for quite some time and Mr. Kidrin, thinking long term, decided that if the litigation with Activision reached a successful conclusion the time might be right to enact a reverse split (if the share price at that time made it necessary) in order to up-list and attract institutional buyers. In order to do this Worlds would need continued authority to do so. Mr. Kidrin clearly felt the best way to go about this was at the annual meeting of shareholders, taking place today, so that a special meeting did not need to be called at a later date which would require that tens of thousands be spent just for that separate vote. As it turns out a vocal chorus has somehow been able to convince Worlds investors, many of them novice, that in fact a reverse split was right around the corner. This notion is of course absurd because a reverse split before it is determined what the judge thinks at Markman (or if there is a more significant value to Worlds) is simply inane and anyone paying attention would know that. In fact Mr. Kidrin has gone further in outlining, specifically, how and when he might use such authority and he has said for the record – not until a successful conclusion to the current litigation.
We think investors will figure this out and of course the sooner the better. It is high time to pay attention to the merits of this case. Anyone who read Susman Godfrey’s recent response to the MSJ by Activision should understand that a desperate move like that not only will not be rewarded, it says something about the case that Activision thinks they have. Here is the Activision telegraphed shorthand in case you’re wondering: If we can’t kill the priority date we can’t win on prior art. If we can’t win on prior art we are in deep you know what.
What about tiny little Blue Calypso? No one is talking about them or about the fact that their valid and issued patents certainly seem to describe, to a tee, exactly what Living Social, Groupon and others are doing in the daily deals space. And what about Amazon down the road? Don’t forget that Amazon owns a very large stake in Living Social and they also have their own daily deals site. This feels like the case that time forgot…only we haven’t forgotten it, we have increased our position by more than double since we first wrote about it a few months back. It is hard to get a gauge on the management team as yet but from what we have seen they haven’t made many mistakes and may well be learning from those who have gone before them. We have much more to add here but will be saving that until later next week.
Suffice it to say that we are very excited about how this litigation is taking shape. There are many chess moves to be made by multiple participants here and that means many possible opportunities. Vringo originally talked about multiple shots at the goal and it seems like this little company has set those shots up for this year.
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$ATVI, $MGT, $CYCC, $VHC, $PRKR, $GRPN, $YELP, $VRNG, $GOOG info related to $WDDD MSJ answer due next week: edvapatent.wordpress.com/2013/07/05/wor… 1 week ago
Big volume at end of day yesterday on BCYP. Worth watching for those in $VRNG, $PRKR, $VHC, $CYCC, $MGT, $GOOG, edvapatent.wordpress.com/2013/06/26/bcy… 3 weeks ago
Commented on: "Patent Juggernaut: The Damages Endgame" seekingalpha.com/a/wf7s $VRNG $WDDD.OB $ATVI 3 weeks ago
Commented on: "Patent Juggernaut: The Damages Endgame" seekingalpha.com/a/wf7s $VRNG $WDDD.OB $ATVI 3 weeks ago
For those following patent litigation-$ATVI, $GOOG, $VRNG, $CYCC, $MGT, $PRKR, $VHC, $BYCC, $MARA, $WDDD, $AAPL edvapatent.wordpress.com/2013/06/11/dam… 1 month ago
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