VirnetX Holding Corporation (NYSEMKT: VHC)
VirnetX Holding Corporation has had an incredibly strong time in the market over the past 2 trading sessions, and for good reason. The company recently won a lawsuit against Apple, and the judgment is a big one. Today, we’ll talk about the suit, how the market reacted to the news, and what we can expect to see from VHC moving forward.
VirnetX Holding Wins Case Against Apple
The case revolved around patents that VHC held with regard to virtual-private-networking technology. Essentially, this technology is being used in the FaceTime function on the iPad, iPod Touch, iPhone, and Mac computers. As a result of the patent infringement, Apple has been ordered to pay VirnetX in the mount of $368.2 million. This judgment comes three years after the filing of this case and the judgment was made by a federal jury, meaning that Apple cannot appeal the decision further.
VHC Stands To Gain Far More Than $368.2 Million
While the judge ordered Apple to pay VHC in the amount of $368.2 million, the decision could yield far more money for the company. That’s because the verdict proves that VHC owns the technology and the patents associated with it. With that said, the company now has the ability to demand payments from Apple as well as other companies that use the technology, for the use of the patented functions. If structured properly, VHC could yield hundreds of millions in royalty payments from the large companies that are taking advantage of the patented technology.
How The Market Reacted To The News
As investors, we’ve come to learn that the news moves the market. When positive news comes out with regard to a publicly traded company, we can expect to see gains in the value of that company. Yesterday, upon the announcement of the news, the stock realized gains of more than 50%. Today, those gains are continuing. Currently (11:50), VHC is trading at $3.96 per share after a gain of 7.32% so far today.
What We Can Expect To See From VHC Moving Forward
Moving forward, I’m expecting to see overwhelmingly positive news with regard to VHC. The reality is that after three years in court, the verdict that came down the line yesterday is incredibly positive for the company. As mentioned above, they will receive more than $300 million from Apple as a result of the patent infringement, but it doesn’t stop there. The reality is that Apple isn’t likely to stop using the technology, and that other companies, including giants like Cisco Systems also use this technology. Therefore, VHC has the potential to rake in hundreds of millions of dollars in royalties if agreements are structured properly. Because of this, I’m expecting to see massive gains in earnings reported by the company, which will naturally excite investors. As investors, we know that when a stock gets exciting, we can expect to see gains in the value of that stock. With that said, I couldn’t imagine that we would see anything less from VHC moving forward!
What Do You Think?
Where do you think VHC is headed moving forward? Let us know your opinion in the comments below!
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