Recs

1

VirnetX Shares Popped: What You Need to Know

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 wireless security expert VirnetX (AMEX: VHC  ) jumped as much as 10.9% on above-average volume. That's on top of yesterday's massive-volume 12% bounce to make a very impressive week indeed.

So what: Yesterday, the big news was a bullish analyst note; today, the company was awarded a patent that was promptly used as ammunition in a fresh infringement lawsuit against Apple (Nasdaq: AAPL  ) .

Now what: So the ink is still fresh on that new patent, yet VirnetX claims that Apple "willfully" violated it. Also, the company chose to notify Apple of the violation by launching a lawsuit rather than starting a license negotiation. I don't know about you, but it doesn't sound like any attempt to reach a "fair and reasonable" business arrangement to me.

At the same time, you don't hear anybody talking about VirnetX's legal setbacks, such as the patent office invalidating (link to PDF) the supposedly vital '759 claim. This one-sided conversation is often a sign of impending collapse as investors cheer the good news and never even hear the bad stuff. For examples of this, see Crocs (Nasdaq: CROX  ) in 2007 and 2008 or SodaStream's (Nasdaq: SODA  ) much more recent moment of fad fame. Don't let this unbalanced reporting happen to you.

Interested in more info about VirnetX? Click here to add it to My 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 mentioned. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and SodaStream International; and 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 opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


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 November 01, 2011, at 2:56 PM, tjsimone wrote:

    "So the ink is still fresh on that new patent, yet VirnetX claims that Apple "willfully" violated it. Also, the company chose to notify Apple of the violation by launching a lawsuit rather than starting a license negotiation. I don't know about you, but it doesn't sound like any attempt to reach a "fair and reasonable" business arrangement to me"

    Lets talk about how it probably went down now.....

    VHC did not discover this technology last night, and get a patent today- They have had the patent pending over 2 years...

    The definitely notified Apple that they were violating a pending patent, thats why the have lawyers?

    So, you know for a fact that VHC never contacted Apple, and asked to negotiate, whats your source?>

    Maybe they tried to be fair and resonable, but Apple, who is not know as a " fair and resonable " in the business world, " shrewd" at best......

    You really do know how to slant a story now Anders..mis-represerting facts....hence " Basher "

  • Report this Comment On November 01, 2011, at 3:36 PM, rgrafstein wrote:

    The last paragraph of the above Motley Fool Article GROSSLY MIS-STATES A VERY KEY POINT:

    THE PATENT OFFICE CLEARLY STATES (read the PDA that YOU cited!) that they have agreed to "RE-EXAMINE" that VHC patent, NOT TO "INVALIDATE" IT!!!!

    (For one indication of the significance of a patent re-examination, consider this:

    It was DURING the process of a re-examination - requested by Microsoft - of a VHC patent, that Microsoft made the decision to settle the issue by paying VHC $200,000,000.)

  • Report this Comment On November 01, 2011, at 4:19 PM, eldoctoro wrote:

    Anders.....'but it doesn't sound like any attempt to reach a "fair and reasonable" business arrangement to me' You must have some knowledge of communication between VHC and the Apple regarding the patents. Otherwise you statement makes you look incredibly stoooopid...once again.

  • Report this Comment On November 01, 2011, at 4:35 PM, elias2626 wrote:

    What an ass...

  • Report this Comment On November 01, 2011, at 5:08 PM, GatorVest wrote:

    You really haven't looked at the history of VHC, their legal battles, their victory over MSFT, their attempts to offer reasonable and fair agreements over the past two years and the defiance of the likes of AAPL, CSCO and other large tech companies. Stop doing the Fool a disservice and do you're homework.

  • Report this Comment On November 01, 2011, at 5:13 PM, porkfriedrayrice wrote:

    Last time i checked Apple was never a "fair and reasonable" company, hence the ongoing Lawsuits filed against them by VHC. Motley fool can eat a fat one.

    and wat do CROCS and SODASTREAM have anything to do with VHC?!?!?!?!?!!? different sectors? What stock doesnt have bad news, remedial fools, sometimes i wonder how these authors can get away with bashing a Patent troll that has essential patents validated.

  • Report this Comment On November 01, 2011, at 5:21 PM, weneedthetruth wrote:

    Wow Anders did you get caught short or what!!

    Can't believe they pay for your ill researched drivel..

    You provided a link to the .pdf why didn't you read it? That's called research, next time due the DD quit surmising.

    No wonder MF is looked at in a questionable manner in most investing circles.

  • Report this Comment On November 01, 2011, at 5:37 PM, TMFZahrim wrote:

    Why didn't I read the PDF? How about I toss that accusation right back.

    If you read through the whole thing, you'll see a point-by-point rundown of how each request to reject a claim was adopted. This PDF is not the start of a re-examination but the end of one. And of course you won't see VHC itself telling you any of this.

    As for SODA and CROX, I'm referring to how gung-ho enthusiasm took the place of research, and their charts paint a scary template for VHC to follow.

    Oh, and that MSFT settlement? AAPL was also a party in that lawsuit, but never settled the case. As in many other murky legal proceedings, there is nothing open and shut about any of these victories.

    Anders

  • Report this Comment On November 01, 2011, at 5:43 PM, TMFZahrim wrote:

    "So, you know for a fact that VHC never contacted Apple, and asked to negotiate, whats your source?"

    Here's the AAPL suit filing:

    http://www.scribd.com/doc/71137835/VirnetX-vs-Apple

    From the doc:

    "13. Apple has received actual notice of infringement by virtue of the filing of this lawsuit."

    Anders

  • Report this Comment On November 01, 2011, at 7:31 PM, tjsimone wrote:

    You really do not know much about our legal system either...

    "actual notice"..is a legal term...

    2 parties, can sit down, negotiate, and talk about agreements, if they dont agree, and one party is looking for a settlement, the serve "notice"

    Legally, you need to file a lawsuit to serve notice, as you are deciding to legally persue a claim of right..

    Holding meetings, or a phone call, saying I am going to sue you, does not meet the " notice" needed legally...

    What do i know though...I am just in the industry..but i will confirm with my GF, you guessed it..a lawyer..

  • Report this Comment On November 01, 2011, at 8:03 PM, sparx89 wrote:

    Yet again another MF article that bashes VHC, IMO the only "unbalanced report" is your own. How someone who (should be) doing the volume and quality of analysis to write articles to try and "help" other investors can turn this patent victory for VHC into a warning is troubling and really displays your lack of disciplined research and knowledge of VirnetX. Their moment(s) of fame are yet to come.

  • Report this Comment On November 01, 2011, at 8:32 PM, bacatcha wrote:

    OMG! Anders Really? REALLY??? I can see why Netflix has caught your eye. A two beer analyst... Thanks for your expert help here.

  • Report this Comment On November 01, 2011, at 8:44 PM, norril wrote:

    Anders.... sigh. You are certainly opinionated about VHC. Did you lose a ton by shorting them on the run to 40? I suspect so, since you were bashing VHC way back then.

    Not much more for me to say, since the others have covered the big points in your inaccurate article. Just know that you are losing all street cred in the industry. I would not be surprised if MF cuts you loose. Maybe you can get a job as a paid basher on the Yahoo boards?

    If you are going to print something for the public to read, Please try to check your facts first, or you will get called to the carpet like this every time.

  • Report this Comment On November 01, 2011, at 9:06 PM, waterworksjeff wrote:

    Is your middle name Terp?

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1581501, ~/Articles/ArticleHandler.aspx, 5/26/2012 11:24:42 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 12,454.83 -74.92 -0.60%
S&P 500 1,317.82 -2.86 -0.22%
NASD 2,837.53 -1.85 -0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/25/2012 4:01 PM
VHC $30.12 Up +0.22 +0.74%
VirnetX Holding Co… CAPS Rating: *
SODA $33.03 Up +0.30 +0.92%
SodaStream CAPS Rating: **
CROX $17.44 Up +0.35 +2.05%
Crocs, Inc. CAPS Rating: *
AAPL $562.29 Down -3.03 -0.54%
Apple CAPS Rating: ***

Advertisement