inuvo just received a patent that might be worth 10x the value of the entire company. the technology and in process patent application were acquired in 2006 for $32 million. It patents a process that was designed for detecting fraud in search and affiliate networks. the company has used it for a small ad network, but the money use of it is by the affiliate networks where every big player is using components of it in some aspects of the patented process including valueclick, rakuten and the one who seems to be the biggest infringer who is none other than microsoft. a customized version of this technology was created for msft soon after inuvo acquired the technology. it seems that msft took it and tweaked it a little and then just quit paying inuvo for it. the money the owner of this can make if they enforce it could be in the hundreds of millions over time. If you just look at valueclicks commission junction merchants, that includes almost every major retailer, discounter, deal a day seller and the only big ones it doesnt have are in the rakuten program. that means that you could see the owner of this patent getting some fraction of a percentage of nearly every affiliate transaction going forward and that would be worth hundreds of millions if not billions of $$. inuvo calls it valid click and even though its got a patent now they probably cant afford to enforce it. vclk could buy the whole company for 3x the trading price and it would be cheaper than paying 1% of its affiliate revenue the next few years. rumors flying that vrng is already looking at it and they will pay more. they have the guns and backing to enfore the patent, they are already about to rock msft's world on the search side and they see ecommerce transactions as the third leg of the stool (search, mobile, ecommerce). this patent was awarded last week and since inuvo has been real quiet about it, probably out jet shopping. people close to this company say management probably will not sell the whole company because they would be out of a job, more likely they will figure out the way that they can make the most money from this. either way, bet the stock pops like a rocket when the word gets out or management feels like they have reached the limit of when their fiduciary duties will require them to announce it.
if it was worth $32 million with a pending patent, what is it worth with a valid enforceable patent? Maybe $100m or more which is more than $4 a share for this company thats trading at $1.15. dude posted earlier this stock to $5 or $10 in a few months might be in a few days instead, once everyone finds out about this
Another thought, when they paid $32m to acquire this (2005), the market it covered was less than 1/3 of its current size. Now the technology has an enforceable patent behind it and the market is much much larger.
I-Hub is nothing more than a chat board like this one. A major flaw in the argument is that, if indeed the value of the patent is so substantial, the company is required to disclose that fact immediately via Form 8 SEC disclosure, not sit on the information. And if there was anyone primed to pay 3x current price for this pig, that information would be in the market and you would be seeing greater volatility in the stock price. Shorts are looking at this company burning through its financing with few white knights to turn to.
You are wrong about almost everything you wrote, but right about 1 thing - an 8k will have to be filed, but it is not required to be filed "immediately", they will have to file an 8k within a reasonable time frame, 5 - 7 business days since it was awarded would mean a filing sometime today, Monday or Tuesday. As for the information being in the market and causing greater volatility in the stock price, hasn't this stock traded as high as $2.12 and hasnt the volume been at least 20x normal since the day it was awarded? It looks like some traders caught wind of the patent and bid up the stock, then saw a chance to bring it back down to get more shares before the 8k was released. I think you are short and hoping to cover before the word gets out, which puts you squarely on the WRONG SIDE OF THE TRADE. Oh yeah, you said the company was burning through its financing - you missed the filing for the most recent quarter because this company posted $1.5m in EBITDA.
If you are as short as it sounds, you should just box your position until after the 8k is filed. Then you can be short at a much higher price if you are so inclined.
This is extremely helpful info that I'm fairly sure the holders of 186,000 shares short would prefer you had not broadcast. The good/bad of a microcap like INUV is that key information like this is not commonly known by the retail investor until someone like you gets the word out...
Yeah, it will be painful to be one of those shorts this week in Inuvo. When the 8k hits, everyone will know instead of just the hard core message board traders. With what is at stake (a tiny percentage of billions in sales per year), the move could make last week's big jump to $2 look small.