Vringo Inc. (VRNG), Unwired Planet Inc. (UPIP) and Marathon Patent Group (MARA) may be affected by the upcoming annual reconstitution of the Russell 3000.
Inclusion in the Russell can give a stock a boost by raising awareness and increasing the number of institutional shareholders. Exclusion from the Russell however can put downward pressure on a stock as investors exit stocks of companies tossed off an index.
New York-based Vringo and Reno, Nevada-based Unwired Planet made the Russell 3000 last year during the annual reconstitution in June.
To be sure, that was before a string of adverse rulings stunned the patent monetization business including the Court of Appeals for the Federal Circuit’s ruling tossing out a $368 million award VirnetX Holding Corp. (VHC) won against Apple Inc. and the same appellate court’s ruling throwing out a $30 million award plus royalty for Vringo from AOL Inc. and Google Inc.
The U.S. Supreme Court made matters worse by ruling in Alice v. CLS Bank that software was unpatentable because it was based on an abstract idea applied to a computer. The high court also allowed fee shifting in exceptional cases involving egregiously abusive tactics by so-called patent trolls in Octane Fitness v. Icon Health Systems.
According to the Russell U.S. Indexes Construction and Methodology, companies can be excluded from the indexes if their stock trades below $1, are quoted on the Pink Sheets or Bulletin Board and if they have a market value of less than $30 million.
Shares of Vringo are currently trading at 66 cents and have traded between 46 cents and $4.27 over the past year. Vringo had a market value of just $62 million.
Unwired Planet shears are currently trading at 62 cents and have traded between 55 cents and $2.44. Unwired Planet had a market value of $69 million.
Officials from Vringo and Unwired Planet declined comment.
Other publicly traded patent monetization companies on the Russell 3000 include Acacia Research Corp. (ACTG), Rambus Inc. (RMBS), RPX Corp. (RPXC), Tessera Technologies (TSRA) and VirnetX.
All five are much larger than either Vringo or Unwired Planet.
Acacia, based in Newport Beach, Calif., trades at around $11.35 a share, giving it a market cap of $350 million.
Rambus shares currently trade at $14.13 giving the New York-based company a market value of $1.63 billion.
Tessera shares currently trade at $37.38 giving the New York-based company a market value of $1.97 billion
RPX shares currently trade at around $16.68, giving the San Francisco-based company a market value of $905.4 million.
VirnetX shares currently trade at $6.77, giving the Zephyr Cove, Nev.-based company a market value of $352 million.
Los Angeles-based Marathon, which wasn’t on the Russell 3000 last year, may be poised to join this year. Shares of Los Angeles-based Marathon currently trade at $5.76 giving it a market value of $80.17 million.
Jason Assad, a Marathon spokesman, said the company was aware of the reconstitution but didn’t know whether it was up for inclusion. He said the company is focused on building value for investors and would be pleased if inclusion in the index increased that value.
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