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: Internet security software specialist VirnetX (AMEX: VHC) saw its shares drop as much as 11.5% in intraday trading Friday on slightly above-average volume.

So what: November continues to be a brutal month for VirnetX shareholders, with the stock now having shed 30% over the past three weeks alone. Of course, VirnetX is up a massive multibag amount in 2010 -- fueled largely by its $200 million patent win over giant Microsoft (Nasdaq: MSFT) -- so this kind of profit-protecting shouldn't come as a huge surprise.

Now what: If you believe, as many other stock sharpies do, that VirnetX's patent portfolio and $74 million war chest of cash make it an ideal takeover target, today's plunge offers an attractive entry point. VirnetX still has patent suits out against tech behemoths Cisco (Nasdaq: CSCO) and Apple (Nasdaq: AAPL), giving its shares plenty of upside potential left. The patent-trolling business might not be for you, but as my fellow Fool Anders Bylund recently noted, the possible windfalls are becoming increasingly tough to ignore.

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