Will Vringo Bounce Back?

Shares of Vringo (NYSEMKT: VRNG  ) plummeted 36% yesterday, after an unfavorable development in the company's patent infringement lawsuit against Google (Nasdaq: GOOG  ) , AOL (NYSE: AOL  ) , and other players in search.

Vringo hasn't lost. Heck, closing arguments start today. However, the case's district court judge ruled yesterday to limit any potential damages. Instead of calculating potential damages to as far back as Sept. 15, 2005, only damages from Sep. 15, 2011 will be considered under the equitable doctrine of laches.

Was this enough to shred more than a third of Vringo's value on a whopping 31 million shares of trading volume yesterday?

Vringo still has a shot here, it just won't be collecting as much in past damages as the nine-figure judgment that it was hoping for. There's a reason the court was trying to steer Google and Vringo into an amicable settlement last month.

However, Vringo bulls need to be realistic here. Vringo didn't pay much for Innovate/Protect -- the holding company behind these old Lycos patents that basically detail the ad targeting process -- back in March. If they were worth more than the eight figures that Vringo paid to acquire the patents this year, you can be sure that Google or Microsoft (Nasdaq: MSFT  ) would've snapped them up to bludgeon its rival.

Again, Vringo still has hope. This is no longer the fringe upstart it was when the year began, carving out a meager living as a smartphone app publisher for a program that generates video ringtones. Any potential payday won't be realized overnight. No matter how this ends, you can be sure that the losing party will vow to fight another day.

However, there's at least less risk in owning Vringo now at less than half of its peak value set just four weeks ago.

This saga is ongoing, and the volatility will continue.

You say you want a revolution

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services recommend Google and Microsoft. 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.


Read/Post Comments (4) | Recommend This Article (1)

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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, 2012, at 2:36 PM, StockMarketStud wrote:

    We gotta be realistic here... Manhatten was purchased for $24.

  • Report this Comment On November 01, 2012, at 2:40 PM, PrincetonAtty44 wrote:

    Unfortunately very few people on this board realize that the Laches ruling was incorrect and amounts to a "fast track" appeal by the Appellate Court. Judge Jackson effectively granted a Motion on Laches by Google where none existed. I repeat there was no filed motion. Any 2rd year Law Student would have caught that one. Then to follow it up not allowing the Plaintiff rebuttal outside of Proffer is frankly, unbecoming of a Federal Judge. This one comes back. No question. No doubt. No Argument

  • Report this Comment On November 01, 2012, at 3:04 PM, StockMarketStud wrote:

    What happens when it comes back? Is it handled by judge or jury?

  • Report this Comment On November 01, 2012, at 10:45 PM, athenahk wrote:

    PrincetonAtty44, Why did the Vringo attorneys address 'content' issues prior to your suggestion addressing 'procedural' issues? Could you please clarify? Thanks, AthenaHK

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