Unwired Planet (UPIP) Stock Surges on Lenovo Patent Deal

By: , dated March 21st, 2014

Shares of Unwired Planet Inc. (UPIP) were trading up +1.08 or +83.08 percent to $2.38 per share in pre-market trading on Friday, after announcing that Lenovo LNVGY would be buying a portfolio of patents from the company for $100 million. The deal includes a term-based license to Unwired Planet’s patent portfolio. Unwired Planet stock closed at $1.30 per share, down -0.08 or -5.80 percent in Thursday’s regular trading session.

Reno, Nevada based Unwired Planet, formerly known as Openwave Systems Ltd. was originally founded as Libris Inc., by Alain Rossman in 1996 and is considered the inventor of the mobile Internet. In 2001 the company changed its name to Openwave after merging with and began providing mobile operator customers with a software infrastructure to carry mobile email and other messaging services.

Chinese based Lenovo, is the world’s largest maker of PCs after buying IBM’s (IBM) personal computing division. The company, which technology company is focused on PCs and mobile devices including servers, workstations, tablets, smartphones and a host of mobile internet devices. The company has offices in Yamato, Japan, Shanghai and Shenzhen, China and Raleigh, North Carolina.

Due to litigation between Apple (AAPL) and Samsung, many companies in the mobile industry have been increasing their patent portfolios to avoid lawsuits. Lenovo recently bought Motorola from Google for $2.9 billion, taking a big position in the mobile industry.

The deal for Unwired Planet’s patents will have Lenovo purchase 21 patent families from Unwired for $100 million in cash. Included in the deal are patents for 3G and LTE mobile technology, along with other important patents.

In addition, the terms of the agreement will have Lenovo license Unwired Planet’s portfolio of intellectual property for several years. The deal will cover standard essential, implementation and layer technology for applications on mobile devices.

Philip Vachon, Chairman of the Board of Directors and chief of its Intellectual Property Committee for Unwired Planet said, “We are pleased to have reached an agreement with one of the world’s leading global technology companies, we wish Lenovo continued success going forward.”

Jay Clemens, General Counsel for Lenovo stated that, “This investment is an extension of Lenovo’s existing intellectual property portfolio, it will serve the company well as we grow and develop our worldwide smartphone and mobile PC Plus business in new markets.”

After the deal, Unwired Planet will be left with 2,500 pending and issued foreign and domestic patents, after the acquisition of 2,400 patents from Ericsson last year. The patents include 2G, 3G and 4G technologies and cloud based mobile applications and services. Other key patents Unwired Planet owns include mobile search, push notification technology, mobile application stores, maps and location based services, mobile gaming and social networking to name a few.

Investors are signaling their approval by almost doubling the price of Unwired Planet stock. With the stock trading at such a low dollar amount, the opportunities for small investors could fuel a further rally. Nevertheless, the company is still showing a loss of -$0.36 per share and the stock could meet with resistance after news of the deal fades.

Other News About UPIP
Unwired Planet Files Mobile Patent Suits Against Google, Samsung, Huawei, HTC In The UK, Germany
Company seeking damages for $42 million in Germany.
Short Interest In Unwired Planet Jumps 40.4%
Short interest jumped to over 2 million shares.

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Jay Hawk Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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