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.

Interested in more info on VirnetX? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apple is a Motley Fool Stock Advisor pick, and the Fool owns shares of it. The Fool has written calls (bull call spread) on Cisco. Try any of our Foolish newsletter services free for 30 days.

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