UPDATE: Vringo, (VRNG) Gets a New Bull, Maxim Starts at Buy
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Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 18 | Down: 15 | New: 9
Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 18 | Down: 15 | New: 9
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(Updated - August 7, 2012 9:54 AM EDT)
After getting a 15 percent charge on Monday on the back of news that it settled a portion of its patent litigation versus AOL, Inc. (NYSE: AOL), shares of Video-ringtone app start-up Vringo (AMEX: VRNG) are up another 10 percent Tuesday after an analyst is getting behind the story.
Maxim Group John Tinker changed their rating on Vringo from non-rated to Buy and introduced a $6.50 price target.
While the company has a limited track record and considerable downside if it loses its patent lawsuit against Google (GOOG), Tinker notes that yesterday's settlement with AOL on the standalone Advertising.com lawsuit "offers confirmation that there is validity to the Vringo/Innovate Protect search patents."
VRNG had two lawsuits versus AOL - the first in which AOL is a co-defender with GOOG, which is scheduled to go to trial on October 16, 2012. The second was on a standalone basis against AOL’s Advertising.com service. "Settlement of the latter suit cannot be pleasing to GOOG as it likely validates VRNG’s foundational patents," according to Tinker.
Vringo-Innovate/Protect's is seeking royalties for past and future damages, which begin up to six years prior to filing the complaint (September 2005, since the lawsuit was filed in September 2011) and end in 2016 (the remaining patent life), the analyst notes. Google generated $36.5B in advertising revenues in 2011 – 96% of its overall revenues of $37.9B. The company generated 46% of its total 2011 revenues in the United States, about ~$16.8B. A 0.1%-1.0% royalty rate range on Google's U.S. ad revenues for 2011 could translate into $17M-$168M in royalties for the year.
"Assuming the mid point of $92M a year could result in ~$924M in total royalty receipts for VRNG over the life of the patents," Tinker states.
For an analyst ratings summary and ratings history on Vringo, click here. For more ratings news on Vringo, click here.
Shares of Vringo are 9.5 percent to $3.92 early Tuesday.
After getting a 15 percent charge on Monday on the back of news that it settled a portion of its patent litigation versus AOL, Inc. (NYSE: AOL), shares of Video-ringtone app start-up Vringo (AMEX: VRNG) are up another 10 percent Tuesday after an analyst is getting behind the story.
Maxim Group John Tinker changed their rating on Vringo from non-rated to Buy and introduced a $6.50 price target.
While the company has a limited track record and considerable downside if it loses its patent lawsuit against Google (GOOG), Tinker notes that yesterday's settlement with AOL on the standalone Advertising.com lawsuit "offers confirmation that there is validity to the Vringo/Innovate Protect search patents."
VRNG had two lawsuits versus AOL - the first in which AOL is a co-defender with GOOG, which is scheduled to go to trial on October 16, 2012. The second was on a standalone basis against AOL’s Advertising.com service. "Settlement of the latter suit cannot be pleasing to GOOG as it likely validates VRNG’s foundational patents," according to Tinker.
Vringo-Innovate/Protect's is seeking royalties for past and future damages, which begin up to six years prior to filing the complaint (September 2005, since the lawsuit was filed in September 2011) and end in 2016 (the remaining patent life), the analyst notes. Google generated $36.5B in advertising revenues in 2011 – 96% of its overall revenues of $37.9B. The company generated 46% of its total 2011 revenues in the United States, about ~$16.8B. A 0.1%-1.0% royalty rate range on Google's U.S. ad revenues for 2011 could translate into $17M-$168M in royalties for the year.
"Assuming the mid point of $92M a year could result in ~$924M in total royalty receipts for VRNG over the life of the patents," Tinker states.
For an analyst ratings summary and ratings history on Vringo, click here. For more ratings news on Vringo, click here.
Shares of Vringo are 9.5 percent to $3.92 early Tuesday.
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