I hate to be the one to say I told you so, but, I told you so. It's Vringo, Inc. (NASDAQ:VRNG) all over again. What's that? The euphoria - the certainty - that drove ParkerVision, Inc. (NASDAQ:PRKR) shares from a price of $2.46 to a high of $7.78 in just seven trading days, only to see it all come crashing down on the 8th day. PRKR plunged to a close of $2.90 on the 8th day (yesterday) when the gamble didn't pan out for speculators who were sure it would. Score another one for not picking stocks like you were tossing a coin.
The prompt for the pullback from ParkerVision was a rather disappointing settlement award from yet-another patent-infringement lawsuit. The hopeful were talking about amounts anywhere from $400 million to as much as $1.3 billion. What PRKR got from the judge-n-jury was less then $200 million. Ouch. Of course, ParkerVision, Inc. technically 'won' the case, so what the judgment lack in substance is made up for by the fact that it's a moral victory, right?
If the story seems familiar, it may be because it's the same one that unfurled for Vringo about a year ago in its patent suit against Google; VRNG 'won' the case, in as far a the jury decided Google had infringed on a key patent owned by Vringo, which meant Google owed VRNG some cash. But, dreams of half a billion to billion dollar settlement were dashed when the total award (so far anyway, but that's a long story) only came in at $30 million. The chatter of VRNG becoming a $10 stock was immediately quelled. Shares now stand valued at $2.73, and are acting as if they're looking for a reason to go lower...
....even though there's a shred of hope that total could be increased in November as part of the follow-up evidentiary proceedings. It's not looking encouraging though. Traders were willing to bid Vringo up to $5.73 right before the trial's official end. The company officially won the case - a very good legal position to be in when it comes time to hammer out the final tally - yet the market's lack of interest in buying this stock now suggests traders have little confidence in anything significant above and beyond that $30 million.
Lesson learned: Traders, gurus, and pundits love to hypothesize big numbers, but when all is said and done, juries don't like to hand out big awards unless the reason for doing so is crystal clear. In the case of ParkerVision and Vringo, while the infringement was technically evident, the intent (from all angles) was a gray area.
I don't come here to gloat about my call on PRKR, however, nor the similar call I made about VRNG about a year ago (though I'll confess the Vringo bulls put up a heckuva fight). I come here to suggest ParkerVision is a buy at this depressed price.
Yes, you read that right - I'm advocating you try and catch this falling knife.
It's still a speculative trade, and not intended to be a long-term one. Like Vringo, ParkerVision, Inc. doesn't actually make anything; its business model is patent infringement suits, and it doesn't even seem to do that as well as Vringo has and can. But, with a fund-raising on way, PRKR has something planned. Though we don't know what it is, we do know it's ready and willing to fight it out in court, and that alone is enough to draw a crowd of buyers to bid the stock up again. Just don't get married to the stock - this is all just a chess match against the rest of the market's speculators.
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