The VirnetX Holding (VHC) Rocket Ship: Failure To Launch
by Sonya Colberg, TheStreetSweeper Senior Editor, 2/10/2016 9:59:42 AM
Shares of VirnetX Holding (VHC) have ridden an unfortunate rocket to the moon based on a court decision that Apple infringed on VirnetX’s patents. But we believe the share price will crater as soon as the market understands the massive risks:
1. The Trend: No Settling
Patent trolling firms used to nab larger companies by the tail. But now these companies are beginning to fight - and win - these lawsuits filed by patent trolls. Case in point is Better Mouse Company's patent suit against SteelSeries.
Better Mouse apparently attained the title of “patent troll” because the company began buying up patents and launching patent lawsuits shortly after it was formed, according to Forbes. Before long, Better Mouse's chewing paid off as companies eager to push aside the pesky little troll coughed up $1.2 million just to settle matters.
But jurors jerked away Better Mouse's cheese on Jan. 14. They rejected the company's patent infringement claims against SteelSeries.
So will Apple really meekly hand VirnetX $625 million? That's unimaginable.
In fact ...
2. Many Years Before VirnetX Pockets A Dime – If Ever
Apple immediately filed for a mistrial after last week’s verdict of infringement on four VirnetX patents in products such as FaceTime and VPN services. And VirnetX’s attorney said he thinks it could take several more years to resolve the case that began six years ago, not near VirnetX's Nevada headquarters but in Tyler, Texas, "the patent litigation capital of America."
Meanwhile, VirnetX knows all too well that after spending countless hours and dollars litigating, cases sometimes go the wrong way. The company filed a $258 million patent lawsuit against Cisco in 2010 with what may have seemed to VirnetX astonishing results. In a stinging 2013 verdict, jurors determined Cisco had not infringed on VirnetX patents. VirnetX investors raced to the exits and shares plunged 28 percent.
3. Microsoft Outcome Disappointing
Even when a lawsuit ends up being settled to VirnetX's favor, the results aren't as beneficial as we would hope. VirnetX won a March 2010 $200 million settlement against Microsoft. Yet, the lead counsel whacked away $20 million plus expenses; taxes took $34 million; and partner Science Application International Corp. $59.24 million, with more obligated.
Ultimately, the Microsoft windfall turned out to be a gentle breeze resulting in VirnetX receiving only about $63 million... Though the settlement did manage to push the negative earnings into a positive 91 cents, the company ended up with just 31 percent of the settlement.
Amedica Corporation: More Painful Drama To Come
by Sonya Colberg, Senior Editor, 2/3/2016 9:53:03 AM
Amedica Corporation’s (AMDA) reverse stock split is the latest and perhaps the most desperate measure taken thus far. But more painful drama will follow.
On the verge of getting delisted from the NASDAQ, so it pulled as desperate 1-for-15 reverse stock split on Jan. 25 with the stock trading at just 11 cents per share.
The split technically propped up the stock into compliance for now, much like another desperate stock TheStreetSweeper just warned investors about … Authentidate Holding Corp. (ADAT,$5.04/share on publication date, $2.94 now). But Amedica’s desperation is even more palatable with its higher cash burn, nearly as severe accumulated losses and more frequent recent promotions.
Just last November, professional stock promoters were paid to conduct a two-day promotional blitz of Amedica stock. Paid stock promotions have always provided one of the surest, quickest tipoffs that a company is desperate … and likely doomed to take a trip to penny stock land.
Real companies with real products and real promise simply don’t need the hype….unlike Amedica.
Investors may find other viewpoints here. Meanwhile, let's proceed with the jaw-dropping risks aching to pummel this stock.
*Bought And Paid For Hype
In Amedica’s case, a third party paid cash through a wire transfer to hype the company for a two-day campaign.
The more desperate the company, the greater the hype and tens of thousands in hype-money is just the opening act. The greater danger to investors is that stock promoters can buy huge quantities of potentially worthless stock and pitch it to their subscribers. Those subscribers’ purchases rocket the stock price, triggering the promoters to dump the stock … and the stock price dives.
Investors can see details of the Amedica hype-fest below:
*Amedica Promoters’ Record
Still tempted to follow promoters’ advice to buy Amedica?
Let’s check their track records first.
Penny Stock Locks, responsible for the majority of the Amedica campaign, cites two recent “winners,” Golden Star Enterprises (GSPT, no revenue, $207 cash, $-119,500 operating cash flow), which was heavily promoted this weekend and Monday by another newsletter writer, and Excalibur Resources Ltd. (EXCFF, no revenue, $3,620 cash, $-142,700 operating cash flow).
The promoter discloses: “PennyStockLocks.com and its officers, partners, affiliates, employees, etc. are compensated for covering and profiling these companies in cash and/or stock and as such there will be a conflict of interest and our profiles and other dealings are not arms length transactions. The party that pays us usually has a position in the stock they will sell at anytime without notice. Their selling and our selling of shares could have a negative impact on the price of the stock, resulting in losses to you.”
Even humor can’t deflect the risk: “We will not be held liable for any investment decisions you make when that is the case. (Hey Folks, these are high risk stocks).”
If the financials and disclosures aren’t eye-popping enough, check out the stock charts of the promoter’s self-proclaimed winners:
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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Investors must be properly armed in order to protect themselves against the dangers of Wall Street. To help out, The Street Sweeper has mined the Internet for the most powerful weapons available to investors researching publicly traded companies. In our “Loaded Weapons” section, you’ll find direct links to corporate documents filed with the SEC, conference call transcripts published by Seeking Alpha, insider stock sales tracked by Insider-Monitor.com and popular investment tools offered by Yahoo! Finance. You can also identify the promoters behind current penny stock campaigns – and the compensation they are receiving – by connecting to StockPromoters.com. You can link to other websites that are conducting topnotch stock investigations as well. Click here now.