Do I think VRNG is a $7 billion company in the making? That seems too unrealistic at this point. Too many unknowns. So let's discount that down 70%. Instead of putting a 10x multiplier on their cash (which, by the way, the market put a 10x multiplier on patent company VirnetX(VHC) 's cash) let's just put a 3x multiplier on it.
What if Google appeals? If Google appeals, then Google might have a problem. Vringo can appeal the laches rulings (which limited the past damages) and Vringo can appeal the jury verdict, which it now appears was a mathematical error that won't be corrected. (More on the laches rulings here). Meanwhile, the cost to Vringo on any appeal is close to zero. Some people have said that "Google can appeal this for years…" And my response: change that to "year". That's the law. Look it up. The Supreme Court won't take this so there's only one court to send this to.
- Is there any other upside? Yes, huge. If VRNG sues MSFT , YHOO, etc the laches which limit damages no longer applies. Damages can go all the way back to 2001. And if we avoid any mathematical errors the numbers can be much larger. In the above, even in the best-case scenario, I took a very conservative estimate. It might not be so conservative in the real world. But better safe than sorry.
When I first wrote about this stock it was about $1.80. Now it's $3.67. It's been as high as $5.75. People played this with various strategies. I hope people made a lot of money. But, now we are here and we have to decide what to do. I like the risk-reward a lot. I think there is very little downside now.
We are past the binary event of a jury verdict. It's over. Vringo won. And it wasn't a $30 million settlement. It was more like a $500 million verdict. Figure out the exact cash Vringo is going to have. Figure out what they will continue to make. Compare with the current market cap.
Good luck investing.
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