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 mobile security researcher VirnetX (AMEX: VHC  ) jumped as much as 20% in extremely heavy afternoon action.

So what: Around 2 p.m. Eastern, the rumor mill and message boards ran hot with the idea that Apple (Nasdaq: AAPL  ) had been denied a request to re-examine a VirnetX patent. If true, this gives VirnetX a stronger leg to stand on in a patent infringement dispute with the iPhone maker.

Now what: VirnetX investors should be ready for the other shoe to drop, sending the share price like a rocket -- in either direction. A victory or settlement in the Apple case would be huge, but a defeat would crush the stock. A valid patent is a good start, but not a guarantee of ultimate victory. The only safe play on this hypervolatile stock is to either stay away or place options bets on high volatility.

Interested in more info about VirnetX? Click here to add it to My Watchlist.

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 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.


Read/Post Comments (4) | Recommend This Article (3)

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 December 19, 2011, at 4:33 PM, tjsimone wrote:

    Anders doesnt want anyone buy because he missed the boat on VHC....

    We will see 50 and never see 20 again...

  • Report this Comment On December 19, 2011, at 4:42 PM, lbi4ever wrote:

    I believe that if you are going to disparage a company as a troll like you have in your past writings maybe it would be appropriate to have someone do your diligence for you. This writing speaks of rumor. If you had made a phone call to VHC or referenced the USPTO and even pulled the 21 page document from the examiner Karin Reichle which were all available to you before this article was published your article would have a level of credibility. But you use the phrase "if its true" which tells me your investigative skills need some improvement.

  • Report this Comment On December 19, 2011, at 5:01 PM, SDTrond wrote:

    Reporting rumors now? Is it *really* that much trouble to check the USPTO website?

    It is true, by the way, to save you the effort.

  • Report this Comment On December 19, 2011, at 7:04 PM, atrain0220 wrote:

    I agree w/ the comments above Motley Fool should first check all available sources before published work. I personally read the legal court document on patent 180 a Fact the court backs VHC. Nothing is guaranteed, but those involved like the writer of this article should understand it does give an advantage in any patent case as with the previous one won by VHC vs Microsoft that settled out of court. Gives a nice lead in for a settlement over the same patent now VHC vs APPLE.

    Please read

    http://us.rd.yahoo.com/finance/external/pssa/SIG=13spvo2cb/*...

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11/21/2014 4:02 PM
VHC $5.26 Down -0.18 -3.31%
VirnetX Holding Co… CAPS Rating: *
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