VirnetX tumbles after columnist says stock overvalued

theflyonthewall.com

A wildly optimistic "fairy tale" about patent holder VirtnetX (VHC) is circulating around various web sites, a Seeking Alpha writer identified only as "Special K" contends. According to this "fairy tale", Virtnetx will make its shareholders rich by successfully extracting 1% royalty payments on all worldwide 4G LTE-Advanced sales. Contrary to the assertion of VirtnetX bulls, Special K doesn't expect Cisco (CSCO) or Apple (AAPL) to settle the lawsuits that VirnetX has filed against them. Furthermore, VirnetX may lose the cases or win them, but receive small amounts of damages, the author contends. Finally, even if the company wins large verdicts and it prevails on appeals, its current valuation still would be unattractive, according to the columnist, who disclosed that he is shorting shares of VirtnetX. In a separate column that was also published today, Special K mentioned Web.com cautiously, causing that stock to drop sharply from its high of the day. In mid-afternoon trading, VirnetX sank $4.31, or 14.79%, to $24.84.

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