VirnetX Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of security software specialist VirnetX (AMEX: VHC  ) surged as much as 13% in intraday trading today on above-average volume.

So what: The fuel for today's double-digit surge seems to be an extremely bullish Seeking Alpha article on VirnetX, in which contributor Dustin Moore taps the stock as a potent play on 4G security. I've highlighted the company as an interesting bet for its current patent suits against Cisco (Nasdaq: CSCO  ) and Apple (Nasdaq: AAPL  ) in the past, but Moore explains that VirnetX's real value -- worth "billions" -- lies in the 4G foundation it laid out many years ago.

Now what: I wouldn't be so quick to ride this latest wave of upward momentum. VirnetX is certainly intriguing, but as our resident tech expert Anders Bylund noted last week, the stock's crazy swings -- often based on no real news -- are just too wild for most investors to handle. While Moore brings up several bullish points, it's hard to believe that the company is legitimately worth 13% more today than it was yesterday.

Interested in more info on VirnetX? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apple is a Motley Fool Stock Advisor, and Motley Fool Options has recommended a bull call spread position on it. The Fool owns shares of and has written puts on Apple. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (5) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 29, 2011, at 2:44 PM, myboynick wrote:

    do some research and maybe you won't miss huge winners

  • Report this Comment On March 29, 2011, at 3:30 PM, Blindnomore wrote:

    I guess, no I know the Fools did not even read the SA article b/c if they did they might have a clue. I just can't believe the CAPS rating is only one star. The future licensing rights of the 4G tech alone will run this stock to AAPL levels. Is there a 5G in development anywhere? Is there something that will replace 4G anytime soon? If there is it is yet to have announced itself to the tele world. Fools will be fools and they also will lose.

  • Report this Comment On March 29, 2011, at 5:45 PM, daviducsb wrote:

    These useless "what you need to know," mf pieces are anything but. They appear to be a ploy for web traffic, targeting high performing stocks and serving up very little interesting info. I agree with comments above, looks like mf totally missed the train on this one...

  • Report this Comment On March 29, 2011, at 6:01 PM, titiles wrote:

    A very strong nerve is needed if you want to mess with a company like VHC.

    Compared to the September.2010's outbreak, this one is still normal.

    Sep.2010, Price = 19.98, Volume = 5 million +

    Now, Price = 19.77, Volume = 4 million +

    You must be well trained to survive VHC. Weak shorters have been blown out of the water.

  • Report this Comment On March 30, 2011, at 1:14 AM, benicetomeok wrote:

    Their "resident tech expert Anders Bylund" in the last post noted earnings coming out in 2 weeks. VHC already announced Q4 2010 earnings on Mar 16 and Q1 2011 earnings are expected in May 26 (see their website www.virnetx.com). I'm confused on what he is seeing happening in 2 weeks, or at this point, in 1 week? It doesn't take an expert to review the company's website.

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