Justin Giles' Instablog/Why I'm Buying More Shares!
Justin Giles' Instablog/ Why I'm Buying More Shares Of Vringo
Mar 1, 2013 7:40 PM | VRNG
On Monday, I read an article from the Motley Fool (Is Now The Time to by Vringo) which talked about why Vringo (VRNG) is a bad investment and why investors should stay clear of it. I on the other hand completely disagree and would like to explain why I'm buying more shares of Vringo at these levels. I've previously made cases as to why Vringo is a good investment in the linked articles hereand here.
The article which went over some of Vringo's financials, was missing some bits and pieces to it. The article touched only on some of Vringo's financials while leaving several key areas out. Yes its true that Vringo is a video ringtone business, but there's a lot more to it than that. Most shareholders are buying and holding because of one thing. That is of course of the pending lawsuits against Google (GOOG), ZTE, Microsoft (MSFT) and future lawsuits to come.
The article implied that Vringo jumped 300-400% last year because of its ringtone business. This is a classic example of why it's necessary for investors to do their own due diligence so they are not misinformed. Today I would just like to clear up some misinformation and explain my reasoning's for buying more shares of Vringo.
Investors should know that Vringo and Innovate/Protect mergedlast year to help protect and profit from the patents and patent portfolios they own. The Markman hearing, secondary offerings as well as Mark Cuban's stake in the Vringo are the main reasons that propelled Vringo to the higher levels it achieved last year. Certainly not because of its ringtone business.
As you can see from the scenario's above, Vringo is not financial hindered as some say they are. During last quarters earnings report, Vringo's management reaffirmed it by saying that its $60 million in cash would be sufficient to support its operations and to allow timely execution of its current business plan.
Post trial motions are winding down to determine the final outcome of Vringo (David) vs. Google (Goliath). Remember the jury unanimously ruled in favor of Vringo, so it is unlikely that the judge would go against that.
Vringo still has pending suits against Microsoft and ZTE Corp. Last Thursday Vringo stated in its ZTE case, "In absence of an agreed settlement, a trial on the first asserted patent is scheduled on September 24, 2013." With the stock closing at $3.04 Thursday, I feel Vringo is trading extremely low at this point and not reflecting its current and future worth. Plus I haven't even added in the value of the 500 patents (which is really more than $22 million) that Vringo acquired from Nokia.