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VirnetX Holding Corp Message Board

  • investora2z investora2z Apr 19, 2013 2:57 PM Flag

    More of a dead cat (trying to) bounce

    VHC is extremely weak and the current recovery from recent lows is not supported with volumes. The dead cat bounce from ~$16 to ~$21 lost steam pretty quickly, and the stock is tottering around $18 with relatively low volumes. Still, the 10 day average volume (1.3 million shares) remains slightly higher than the 3 month figure. On 14th March, when there was a massive fall, the volumes were nearly 10 million. The stock has crashed on the news of the loss in its patent infringement lawsuit with Cisco. Though VirnetX has declared that it may seek a new trial, not all are convinced. Instead of catching a falling knife, it is better to let the stock settle down in a new range, and consolidate quietly for a few weeks. In any case, the stock is likely to remain under pressure for some time. JP Moreno, in his recent report on Document Security System (NYSE:DSS), had pointed out this risk in the patent infringement lawsuits. He had expressed his preference for companies like DSS. DSS has an operational business ($17.1 million turnover in 2012) and is also into IPR acquisitions to further its strategic objectives. DSS subsidiary filed a patent infringement lawsuit against big companies like Facebook (FB), LinkedIn (LNKD), Broadvision (BVSN), Jive Software (JIVE) and Novell (NOVL) etc. which is potentially worth hundreds of million. The Markman hearing is due shortly, and the stock is extremely active. For VirnetX, this loss will be a major setback and it will be difficult for it to find favor of investors soon. The next trigger could be the licensing negotiation with Apple. Unless there are a few days of price rise accompanied with huge volumes, traders or investors may not get convinced with any reversal. Of course, if the motion for a new trial against Cisco is admitted, there could be some short term optimism.

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    • You think the court verdict is worthless? Why we need the court then?
      You think the recent VHC motion on raising the royalty rate to 1.52% is not right?
      You think Apple's "walkaround" will let Apple AVOID paying Nothing for the $368 millions fine?
      You think 4G techs is worthless?
      You think you buy stock for TODAY or for FUTURE?

      Sentiment: Strong Buy

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