This time last year, we published this piece on VOIP PAL COM INC COM NPV (OTCMKTS:VPLM).
At the time, the company was trading for less than $0.05 a share and we took a look at it in an attempt to inject some clarity in what was – at a glance – an incredibly complicated situation. We will get into the situation in a little more detail shortly but, first, take a look at our conclusion from that coverage:
“We think the decline on the UP IPR application tips the scales in favor of the bull case. It’s not going to be a smooth ride for a shareholder, but the reward on offer is very large, and those willing to get on board could take home a sizeable chunk in added value when the decisions finally come in.”
This week, the decisions we allude to in the final sentence of this conclusion have just hit press and they have done so as favorable for the company and its shareholders. On the back of the development, Voip-Pal has run to $0.11 a share – a 120% increase on the price at which we drew the above conclusion.
So what’s happened and what’s next?
For those new to the situation, Voip-Pal is a patent enforcement company that has pending suits against some of the biggest names in technology – Apple Inc. (NASDAQ:AAPL), AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) and Twitter Inc (NYSE:TWTR).
The patents in question relate to the technology that underpins direct messaging systems and, as we outlined in our previous coverage, we believe they are highly enforceable.
The problem was, back at the end of last year, the courts that were put in place to judge this enforceability made some conflicting decisions, voting in favor of enforceability in the Verizon case but against enforceability in the Apple case
This, of course, is counterintuitive and, as expected, Voip-Pal got to work trying to overturn the negative Apple decisions.
And this is what the latest news relates to.
Basically, the court has reversed its initial decision and now states that the patents are open to enforcement and this paves the way for Voip-Pal to command some degree of compensation from Apple for its continued use of the technology that said patents cover in its devices and software.
Which brings us to what’s next.
Take a quick look at this quote, pulled directly from the press release outlining the above-detailed decision, published on November 21, 2017.
“Our strategy remains to pursue an amicable settlement in order to achieve monetization of our patent portfolio; we will keep everyone informed of our progress.”
This is a quote from Emil Malak, CEO of Voip-Pal.
Essentially, then, the company is expecting to pick up compensation in the form of a settlement as opposed to dragging out the cases any further and relying on a jury award for long-term monetization.
This means both that we should see some sort of decision sooner rather than later and that it will probably involve either an initial upfront payment, a royalty agreement that dictates that Apple must pay Voip-Pal a certain percentage of revenues on a regular basis going forward, or a combination of the two.
The vast majority of shareholders would likely prefer to see a combination of the two given that this would not only inject some immediate upside momentum into the company’s share price and reduce any near-term dilution risk but would also serve to provide an ongoing revenue stream with which the company can foot the bill for any future enforcement cases.
Such a settlement would also serve as precedent for positive outcomes in the remaining cases (those against Verizon and Twitter) and, in turn, would strengthen the long-term bull case for Voip-Pal.
Going forward, then, we are looking for any step forward and/or news that relates to a settlement rooted in this case as indicative of further upside momentum for Voip-Pal.
We will be updating our subscribers as soon as we know more. For the latest updates on VPLM, sign up below!
Image courtesy of Davidlohr Bueso via Flickr
Disclosure: We have no position in VPLM and have not been compensated for this article.