Yesterday, Wi-LAN Inc. (TSE:WIN), (PINK:WILIF) stock returned back on the released by the company funds raising news.
Maybe investors had a few reasons to be reluctant to support the shares’ further upward direction, though the announced by the company deal for gross proceeds of $21.75 million.
As the company stated, the funds raised have to be used for strategic acquisitions of patent portfolios.
Following the latest news by the company and reading WIN’s last financials, one gets the feeling that the majority of information there is related not to strategic patent portfolios, but to initiated litigation cases against companies that have infringed and continue to infringe WiLAN’s patents.
The latest financial reports for the three and nine months ended September 30, 2010 show that in both periods the largest share in WIN’s operating expenses belongs to costs related to the company’s litigation matters.
Furthermore, for the nine months ended September 30, 2010 Wi-LAN reports operating expenses for patent licensing of $4.6 million, while for litigation the company exhausted $17.76 million, which was 37% of the total operating expenses.[BANNER]
Considering the cash needs of the company and extrapolating the above given numbers, it is not difficult to assume that the above mentioned financing would be more useful to WIN to further cover its litigation expenditures than to buy more patents.
Referring to the other possible reasons of the downward move from yesterday, it is good to mention that during the last months the company has no news related not only to its strategic patents portfolio, but even to the so actual whitespace networking.
Yesterday, WIN shares lost 5.49% of their value, spinning within the range of the released by the company deal basis at a price of $4.35 per share.
