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VASCO Data Security International Plunged: What You Need to Know

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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 information security specialist VASCO Data Security International (Nasdaq: VDSI  ) look cracked today, falling as much as 15.8% on moderately heavy trading volume.

So what: VASCO's first-quarter earnings merely matched analyst targets rather than blowing them away, and the company stuck to its earlier full-year guidance. For a stock that doubled over the past seven months and gained 81% since the last earning report, that simply won't do. Only mind-blowing excellence could have satisfied Mr. Market at this point.

Now what: The IT security sector has been overheated since the buyout binge of last fall that culminated in Intel (Nasdaq: INTC  ) inexplicably buying McAfee. Corrections like this one are necessary to bring these stocks back to reality now that the acquisitive mood appears to have faded. In particular, online security expert VirnetX Holding (AMEX: VHC  ) had absolutely no business quintupling over the last 12 months and won't get any buyout offers until its valuation aligns with business reality. You have been warned.

Interested in more info on VASCO Data Security International? Add it to your watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Intel is a Motley Fool Inside Value pick. VASCO Data Security International is a Motley Fool Stock Advisor selection. Intel is a Motley Fool Income Investor choice. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended a diagonal call position on Intel. 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 Motley Fool is investors writing for investors.


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 April 26, 2011, at 1:40 PM, stevebozeman wrote:

    I get it...MF doesn't like VHC or wants to see it's price rise stopped for some reason. Please just post the truth and quit with the bullsh*t article so you can bring it up. The article is not about VHC yet you say you have been warned. Thank you so much for your

    caring.

    You have done zero due diligence on VHC or you would be very bullish. MF is trash..

  • Report this Comment On April 26, 2011, at 1:58 PM, norril wrote:

    Um... are you for real? Can you explain how much time you have spent researching VHC? Do you know what VHC's business goals are? At what point did you make the decision for VHC that they should be bought, rather than follow the business model they have mapped out for themselves?

    There are about 50 people in Yahoo Finance boards and Investor Village, that have done 100 times the research as you have, so I consider you completely unqualified to post anything about VHC for public consumption.

    I think MF should be ashamed (yet again) for allowing garbage like this to get posted. There is a reason why "Fool" is part of the title.

  • Report this Comment On April 26, 2011, at 3:28 PM, myboynick wrote:

    tell me aqbout the company and why you came to this conclusion please. i appreciate your expert opinion.

  • Report this Comment On April 26, 2011, at 3:32 PM, moseywood wrote:

    i agree with these other guys. You bias is suspect. While a ton of other stocks are truly overvalued garbage you choose to pick on a company that has "the goods". it seems you are just too lazy to do the work. Or you are helping some shorts. Whatever the reason, you should feel embarrassed as a start!!!

  • Report this Comment On April 26, 2011, at 3:48 PM, tjsimone wrote:

    IF the Motley Fool does not like a stock, thats one thing...

    However, the manner in which VHC is slammed in this article, , only tarnished the name of the Motley Fool, not just the writer...

    " You have been warned" is typical lingo for over-zealous, uninformed shorts, that try to strike fear in investors, based off of misguided threats.

    Is this really the way Motley Fools want to represent themselves?

    There is also a clear immaturity to the whole article in gerneral, written from the view point on an un-educated college drop-out.; Definitely not a season financial veteran behind the wheel of this one....

    Motely Fool-this is where you lose credability with the general public- your suppossed to be helping investors BUILD wealth, not tear it down- leave that to the slime of the world....

  • Report this Comment On April 26, 2011, at 4:16 PM, BigSwingingAlpha wrote:

    the outcome of the MSFT case potentially suggests VHC's IP portfolio is both essential and valuable and damages for other infringement along with royalty streams could result in an annual cash flow stream that exceeds VHC's current enterprise value resulting in a future equity value multiple times larger. BUT determining the timing and gauging the probability of signing a royalty arrangement and then pinpointing an acceptable royalty % rate is an EXTREMELY difficult proposition. to me this implies VHC equity is analogous to a call option and i have to say there aren't many equity derivative contracts listed or otherwise with a carrying value in excess of $1b. i feel a valuation of this magnitude needs to be respected and helps to somewhat offset the black-box nature of this situation. the risk profile is understandably too high for many on the long side but one can simply and swiftly get his face ripped off shorting this stock. i'd be careful

  • Report this Comment On April 26, 2011, at 8:21 PM, mntwst68 wrote:

    Thanks for your BS review of VHC I will cancel my subscrition ASAP!! You have no credibility! No wonder you call youselves Motely FOOLS!!

  • Report this Comment On April 28, 2011, at 9:04 AM, elias2626 wrote:

    Anders?

  • Report this Comment On April 28, 2011, at 3:48 PM, astrofan3158 wrote:

    Ouch....jumped the gun a little bit didn't we Anders?

  • Report this Comment On April 28, 2011, at 4:35 PM, tjsimone wrote:

    Anders is a contrarian indicator in my eyes..

    He has made me $$$ now in VHC and SIFY..

    He gets it wrong all the time!

  • Report this Comment On April 30, 2011, at 11:19 AM, eldoctoro wrote:

    I'm gonna contact MF when the first licence is signed for VHC security patents package and demand he be fired for posting a recommendation to sell or stay away from VHC. He clearly DID NOT perform DD. Only FOOLS would give his opinion credence.

  • Report this Comment On April 30, 2011, at 11:24 AM, eldoctoro wrote:

    Bylund says "won't get any buyout offers until its valuation aligns with business reality." The business reality is that the VHC security patents are worth billions. I guess we are supposed to wait until the PPS reflects that fact.

  • Report this Comment On May 09, 2011, at 3:08 PM, elias2626 wrote:

    Hey 'Anders' (hahahahahahahahahaha) PPS is $25 right now.

    Sorry about your short position (hahahahahahahaha).

  • Report this Comment On May 27, 2011, at 11:28 AM, elias2626 wrote:

    Anders you piece of s*it.

  • Report this Comment On July 06, 2011, at 3:38 PM, elias2626 wrote:

    HAHAHAHAHAHAHAHAHA 36$

    HAHAHAHAHHAHA.

    Apologize.

  • Report this Comment On July 06, 2011, at 3:38 PM, elias2626 wrote:

    VHC $36

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Related Tickers

5/25/2012 4:00 PM
VDSI $7.09 Up +0.12 +1.72%
VASCO Data Securit… CAPS Rating: ****
VHC $30.12 Up +0.22 +0.74%
VirnetX Holding Co… CAPS Rating: *
INTC $25.74 Up +0.09 +0.35%
Intel Corp CAPS Rating: *****

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