VirnetX Shares Popped: 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 VirnetX Holding (AMEX: VHC  ) surged close to 18% today on what appears to be increasing speculation that Apple (Nasdaq: AAPL  ) , Google (Nasdaq: GOOG  ) , or another entity will bid for its patents related to 4G technology.

So what: We've seen this sort of behavior before. This time, speculative articles at Seeking Alpha and elsewhere suggest a bid isn't far off. How big a bid is unknown at this point, but considering that Google was willing to pay what amounted to an $8 billion premium for Motorola Mobility's (NYSE: MMI  ) intellectual property, bulls are expecting a significant offer.

Now what: Fools should nevertheless be careful. Thanks to bullish speculators, the stock has more than tripled over the past year and is up more than 40% year-to-date. As such, much of the premium they expect could already be cooked into the price. Do you agree? Would you buy at these levels? Weigh in using the comments box below.

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

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Google, as well as creating a bull call spread position in 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 Motley Fool has a disclosure policy.

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10/25/2016 3:11 PM
VHC $3.10 Down -0.10 -3.12%
VirnetX Holding CAPS Rating: *
AAPL $117.79 Up +0.14 +0.12%
Apple CAPS Rating: ****
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MMI.DL $48.08 Down -1.05 +0.00%
Motorola Mobility… CAPS Rating: *****