The Bittersweet Victory for VirnetX (VHC)
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Earlier in the session, VirnetX (AMEX: VHC) said it won a decision against Apple (Nasdaq: AAPL) over infringement on four patents (U.S. Patent Nos. 6,502,135, 7,418,504, 7,921,211 and 7,490,151) and was awarded $368 million. Shares of VirnetX are higher amid the good news, rising as much as 30.5 percent on the session to a new high.
Amid the delight of investors is a bigger issue: VirnetX only got about half of what it wanted. According to a report yesterday following Vringo's (AMEX: VRNG) victory over Google (Nasdaq: GOOG), AOL (NYSE: AOL), and others, we expected that VirnetX wouldn't be awarded nearly what it was after. Prior reports had VirnetX seeking about $708 million from Apple, but the jury granted just $368 million, or 52 percent of what was asked.
Fast forward to Wednesday. Maxim Group issued new commentary on Vringo's victory, saying that about $500 million or so should be coming the Company's way over the next few years given the 3.5 percent royalty run rate. That means that Vringo will end up with more than the $493 million it was asking for when it initially filed the suit many years ago. Of course, Google may appeal the decision (and is likely to do so).
Still, similar language wasn't given with VirnetX's release, meaning its stuck with only 52 percent of its total request. That's a failing grade in most American classrooms.
The addition of $368 million will boost VirnetX higher, dumb logic pegs a per-share addition of $8 or $9 from Tuesday's close of $26.29. In the long run, VirnetX will have to do a little more to get back to its 52-week high of just under $42. Shares are up about 20 percent Wednesday morning.
Amid the delight of investors is a bigger issue: VirnetX only got about half of what it wanted. According to a report yesterday following Vringo's (AMEX: VRNG) victory over Google (Nasdaq: GOOG), AOL (NYSE: AOL), and others, we expected that VirnetX wouldn't be awarded nearly what it was after. Prior reports had VirnetX seeking about $708 million from Apple, but the jury granted just $368 million, or 52 percent of what was asked.
Fast forward to Wednesday. Maxim Group issued new commentary on Vringo's victory, saying that about $500 million or so should be coming the Company's way over the next few years given the 3.5 percent royalty run rate. That means that Vringo will end up with more than the $493 million it was asking for when it initially filed the suit many years ago. Of course, Google may appeal the decision (and is likely to do so).
Still, similar language wasn't given with VirnetX's release, meaning its stuck with only 52 percent of its total request. That's a failing grade in most American classrooms.
The addition of $368 million will boost VirnetX higher, dumb logic pegs a per-share addition of $8 or $9 from Tuesday's close of $26.29. In the long run, VirnetX will have to do a little more to get back to its 52-week high of just under $42. Shares are up about 20 percent Wednesday morning.
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