Patents firm Vringo, Inc.(NYSEAMEX:VRNG) is seeing a huge uptick in its shares with a spate of developments that are positive for the company.
On Friday a U.S. court turned down an appeal by Google to summarily dismiss a patent lawsuit filed by Vringo against the internet search firm. It also ordered Google and other companies involved in the suit such as AOL, Target among others to settle with Vringo out of court.
On Monday Vringo said that it had filed another lawsuit against Chinese phone maker ZTE alleging that it had infringed on three of its European patents.
Shares in Vringo rose 19.60 percent on Monday to $5.43 a share. The stock has risen about 905 in the past one week and made an all time high of $5.57 in yesterday’s session. Last week, the stock was up 58%.
On Friday the company also announced a $45 million fund raising programme via an offer of equity shares, to strengthen its balance sheet and be in a better negotiating position with Google.
The boost in the shares of the company was also partly due to Maxim Group maintaining its Buy rating on the stock while raising the target price to $10 from $6.50 a share.
John Tinker, analyst with Maxim said that Vringo appeared to have Google in a tight spot going into settlement negotiations and that the Internet search giant could be liable to pay hundreds of million to Vringo or simply buy the patents.
"Google is in a tricky position; if they pay a patent troll, this could open the doors to further cases. On the other hand, a company that professes to “do no evil” should pay a licensing fee for someone else’s idea that they are using, in our opinion. One possible outcome is that GOOG buys Vringo and then uses the patents in turn as a strategic weapon against Microsoft for similar infringement," Tinker wrote in his note to clients.
Tinker has estimated that damages paid out by Google could amount to $1.4 billion.