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Acacia Research Corporation Message Board

  • investora2z investora2z Jul 25, 2013 7:21 AM Flag

    Sentiments have become extremely negative

    Several analysts have downgraded or reduced the price target of the stock the stock recently. Barclays Capital has reduced the PT from $28.00 to $23.00 and JP Morgan from $40.00 to $34.00. The last quarter results were much below expectations as the company posted a revenue of $23.11 million, which was down 54% on a yoy basis, and the net loss was $12.5 million compared to a net income of $6.5 million on a yoy basis. The litigation and other expenditures increased substantially, which added to the problems caused by drop in revenues. The last two quarters have been bad, but over the years the growth in revenues has been exponential. Even the bottomline has shown improvement over the last 3-4 years. Still, the sentiments have been dented by the recent performance, and it is difficult to remain positive about the stock. The main reason is the lack of consistency in the performance during the last few quarters. While there is always room for some variations, wild fluctuations like this are not taken very well. The crash in the stock price reflected the sentiments. It has taken support around $21, and a sustained drop below those levels can lead to a much deeper cut. The company manages hundreds of patents, and is in a fast growing business segment. IPR monetizing business has attracted several players, with companies like Spherix (SPEX) getting aggressive with numerous patent acquisitions to pursue monetizing opportunities. While the second quarter was crucial, the next two quarters will be critical for Acacia. There may not be room for further decline in revenues. Thankfully, there is no debt on books and the liquidity is good. The company still has a good amount of cash, and it will be good if it is put to work to change the fortunes.

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