VirnetX Shares Popped: What You Need to Know
Dec 19th 2011 4:02PM
Updated Dec 19th 2011 4:18PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of mobile security researcher VirnetX (ASE: VHC) jumped as much as 20% in extremely heavy afternoon action.
So what: Around 2 p.m. Eastern, the rumor mill and message boards ran hot with the idea that Apple (NAS: AAPL) had been denied a request to re-examine a VirnetX patent. If true, this gives VirnetX a stronger leg to stand on in a patent infringement dispute with the iPhone maker.
Now what: VirnetX investors should be ready for the other shoe to drop, sending the share price like a rocket -- in either direction. A victory or settlement in the Apple case would be huge, but a defeat would crush the stock. A valid patent is a good start, but not a guarantee of ultimate victory. The only safe play on this hypervolatile stock is to either stay away or place options bets on high volatility.
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