Vringo: The Good, the Bad, and the Lawsuit

Mobile-technology company Vringo (NASDAQ: VRNG  ) announced its 2012 earnings last week, and as Charles Dickens would say: It was the best of times, it was the worst of times.

Vringo, which specializes in mobile entertainment applications and application patents, aggressively set out to make its name known last year and pulled off a number of impressive feats as a result. Sadly, its final numbers didn't do much to reflect this hard work. Here's a closer look at the state of Vringo, and whether it deserves your investing dollars.

The good
As you'd expect from any corporate conference call, Vringo CEO Andrew Perlman was quick to announce the company's high points of the year. The company's Facetone product, which creates a photo slideshow on a phone screen whenever a friend calls, became available on both Apple's iPhone and Google's Android, snagging a huge new audience.

Vringo also joined forces with company Innovate/Protect, a company that aims to get the most bang out of a company's intellectual-property buck. The resulting subsidiary won a fierce patent lawsuit against tech heavyweights Google and AOL, to the tune of $30 million. As if that wasn't enough of an accomplishment, Vringo also snagged 500 copyright patents from Nokia. These all seemed like events worth celebrating, but in this case, there's a darker side to success.

The bad
This company made some great strides in terms of working with high-profile companies, but you'd never know it by taking a look at Vringo's financial statement. In 2012, Vringo's overall revenue tallied up to $369,000, a 48% drop from last year's total. The value of Vringo's EPS dropped, too, from $1.17 to $0.53, because of an increase in the amount of shares.

Vringo investors may not approve of the company's move to multiply its shares, since the fewer there are, the more they're worth. By increasing the amount, however, Vringo is extending an invite for even more shareholders to hop on board.

The verdict
It's never a good time for a company's revenue to slice in half, but it's an even bigger problem when that company is still a relative newbie to the market. Vringo has been on the scene for barely two and a half years, and for the moment its financials are in a huge slump.

The gears are fiercely moving behind this struggling company, however, and by expanding its scope to include patents, the company could be more valuable than it appears. Even though its stock is ridiculously cheap, it might be best to wait and see how Vringo's latest strategies pan out before you think about buying.

Nokia, for its part, has been struggling in a world of Apple and Android smartphone dominance. However, the company has banked its future on its next generation of Windows smartphones. Motley Fool analyst Charly Travers has created a new premium report that digs into both the opportunities and risks facing Nokia to help investors decide if the company is a buy or sell. To get started, simply click here now.


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

Comments from our Foolish Readers

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  • Report this Comment On March 30, 2013, at 6:38 PM, MFMotleyStool wrote:

    Honestly, are you serious with this article? Why even write it as this company is waiting for rulings on it's case with Google which could mean a windfall to the company that will no doubt be appealed (the $30M is not the end of that case by any stretch since running royalties has still not been settled but the jury did include them in their verdict and there are other rulings which could ultimately drive other monies to the company) and they are in settlement discussions with Microsoft as of Friday for infringing on the same 2 patents that Google was found GUILTY of infringing on.

    Good luck on future articles.

  • Report this Comment On March 30, 2013, at 7:50 PM, clifffiscal wrote:

    The dilution you mentioned was done to raise money to pursue litigation on the IP that Vringo owns and is continuing with the additional results pending as mentioned above. In addition to those, will be suits against ZTE involving some of those from Nokia. Clever title but there is much more to the story and it should have read Lawsuits as in plural.

  • Report this Comment On March 30, 2013, at 9:01 PM, NOTAFOOL1000 wrote:

    Very incomplete article, made no mention of the settlement discussions taking place with MSFT.

    Article like this is inaccurate, incomplete and misleading!!!!

  • Report this Comment On April 01, 2013, at 9:35 AM, taishiba wrote:

    what a junk garbage article caroline bennett what is your track record on companies written about???

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