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Acacia Research Corporation Message Board

  • investora2z investora2z Apr 28, 2013 12:02 AM Flag

    Very difficult to cross $26

    The announcement of an investigation against Acacia and its directors for material misstatements is disconcerting. That puts a question mark in the mind of investors, and it is better that the doubts are resolved either way as soon as possible. The stock which is already reeling under the impact of poor earnings does not need more negative news flow. It has become a little stable with a decent rebound from recent lows. It is moving towards the 200 DMA of $25.99 and the volumes have been decent. However, this level will surely provide a lot of resistance. The fall from $29 to $21 was with massive volumes, and such cracks are not easy fill. The sentiment has been dented severely and all rallies are likely to be sold into. The fall in revenues from $99 million to $76 million was bad, and the near tripling of the cost of revenue from ~$16 million to ~$45 million was worse. Even on a QoQ basis, the net income fell from $9.82 million to $5.11 million. Total operating expenses doubled from ~$35 million to ~$70 million. It had earlier appeared that company was doing great and concentrating on enhancing its patent portfolios. Recently, its subsidiary had purchased 40 patents related to microprocessor and memory technologies. IPRs are very valuable assets now with companies putting in more and more focus to develop and monetize same. Spherix Inc. (SPEX) recently sold its consulting division to concentrate on building its IPR portfolio. Spherix is into drug development and its drugs are reporting good results in the trials. Acacia, should continue its efforts at acquiring more and more valuable patents which are available at decent valuations. Bad results have been digested but it will be difficult to absorb bad news related to misstatements in the financial reports. Investigation will take its due course, but the management has to come out and clarify immediately so that all doubts are dispelled.

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18.79+0.34(+1.84%)Dec 19 4:00 PMEST

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