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What: Shares of mobile technology researcher VirnetX (NYSE:VHC) lost 26% of their value in May, according to S&P Capital IQ data. The plunge erased most of the share price gains VirnetX investors had enjoyed in February and April, and the stock dropped back to a 70% one-year decline.

So what: Last month, VirnetX shares dropped more than 6% overnight when the purported expert in intellectual property marketing hired outside help for its patent licensing operations. The damage deepened when VirnetX launched the Gabriel Collaboration Suite, a secure communications package, to a distinct lack of positive feedback. And when the results of shareholder votes at this year's annual meeting were released, it turned out that independent director Thomas O'Brien and Chief Technical Officer Robert Short received support for their boardroom positions from less than half of VirnetX's shareholders. That's a pretty clear vote of no confidence.

Now what: These wild market swings only underscore the speculative nature of VirnetX and its rickety business model. The company depends on successful lawsuits to monetize its patent portfolio, as regular licensing deals provide almost no revenue. Over the last year, VirnetX has recorded regular sales of $1.4 million but more than $27 million in selling, general, and administrative expenses.

In short, VirnetX is more like a poker chip than an investment. The company claims to hold the essential keys to running secure communications for 4G LTE wireless networks and the Internet of Things, which would be a guaranteed cash machine for many years to come. Ultimately, these lofty claims fall flat and VirnetX's share prices simply follow suit.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.