Why Vringo, Inc. Shares Popped Today

Is Vringo's jump meaningful? Or just another movement?

May 27, 2014 at 6:06PM

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 Vringo (NASDAQ:VRNG) jumped more than 12% early Tuesday, then settled to close up around 4% after a Seeking Alpha contributor suggested a recent U.S. Supreme Court decision could result in a significant additional damages owed to Vringo by Google in an existing patent infringement case.

So what: The U.S. Patent and Trademark Office already upheld the validity of Vringo's patents last November. Then, after Google's proposed workarounds were deemed insufficient, a U.S. District Court increased the ongoing royalty rate owed to Vringo based on legal standards of willful infringement, which resulted in a total judgment value of over $1 billion.

However, in a separate May 19 Supreme Court ruling (Petrella v. MetroGoldwyn-Mayer,), laches were effectively removed as a defense in copyright litigation. According to the SA contributor, this "strengthened the rights of US copyright holders and by extension Patent Holders and Patent Assertion Entities." Google previously used a laches defense to convince a Federal Judge to prevent Vringo from collecting past damages prior to Sept. 2011. So, based on Google's earnings during the period in question, and given the previous jury verdict 3.5% royalty rate set in November, Vringo could stand to collect as much as an additional $460 million.

Now what: These are huge numbers for a company whose total market capitalization sits under $300 million, so I can certainly understand Vringo's appeal to value seekers. However, we also need to keep in mind Google has made it clear it fully intends to continue appealing these rulings, so long-term investors would be wise to recognize Vringo still has plenty of work to do before it actually sees this money in its coffers.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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