RPX Corp (RPXC) Shares Plummet After $232 Million Cash Acquisition


RPX Corp (NASDAQ:RPXC) shares are down huge in early morning trading after the company announced late yesterday that they have agreed to acquire Inventus Solutions Inc. for a whopping $232 million in cash. Additonally, the company has also announced the execution of agreements which secure licensing rights for over 20 companies to the patents owned by Round Rock Research, LLC.

RPX Corp (NASDAQ:RPXC), founded in 2008 by John A. Amster, Geoffrey T. Barker, and Eran Zur is a provider of patent risk management services such as acquisition syndications, advisory services, patent intelligences and defensive buying. They are known for helping those company who have issues with dreaded patent trolls.

“We see this acquisition as a natural extension of RPX’s expertise in mitigating patent risk and lowering legal costs for our clients,” said CEO John Amster. “With our business posting its third year of solid cash generation and steady progress toward our vision of a patent clearinghouse, it is the right time to expand the services we can provide to mitigate risk and lower costs for corporate legal departments. Adding new services related to litigation and compliance discovery does this, while profitably accelerating our revenue and cash flow growth,” Amster continued. “At the same time, the acquisition expands the total available market we address with our services to lower legal costs and risk. Finally, it will also help increase our footprint inside our clients’ legal departments, which will strengthen our ability to achieve RPX’s long-term goal of establishing a broad, de facto patent clearinghouse.”

Interestingly enough investors of RPX Corp (NASDAQ:RPXC) don’t seem to be all that fond of this news. The stock is down 13.84% or $1.87 following the news, hitting $11.64 per share. Approximately 156,099 shares traded hands. RPXC shares have declined 13.12% since May 13, 2015 and are currently downtrending. It has underperformed the S&P500 by 9.44%.

From a total of 2 analysts covering RPX Corporation (NASDAQ:RPXC) stock, 1 rate it a “Buy”, 1 a “Sell”, and 0 a “Hold”. This means that 50% of the ratings are positive. The highest target price is $17 while the lowest target price is $15. The mean of all analyst targets is $16 which is 37.46% above today’s ($11.64) stock price. RPX Corporation was the topic of 2 analyst reports since August 20, 2015 according to the firm StockzIntelligence Inc. Barclays Capital downgraded shares on August 20 to a “Underweight” rating.

The institutional sentiment decreased to 0.99 in Q2 2015. It’s down 0.22, from 1.21 in 2015Q2. The ratio turned negative, as 24 funds sold all their RPX Corp shares they owned while 52 reduced their positions. 9 funds bought stakes while 66 increased their total positions. Institutions now own 44.58 million shares which is 10.10% less than the previous share count of 49.59 million in 2015Q2.

Mangrove Partners holds 1.31% of its total portfolio in RPX Corp, equating to 415,899 shares. Killen Group Inc owns 816,865 shares representing 1.05% of their total US portfolio. Moreover, Tealwood Asset Management Inc has 0.91% of their total portfolio invested in the company, equating to 152,424 shares. The Missouri-based Piermont Capital Management Inc. has a total of 0.83% of their portfolio invested in the stock. Baltimore, a Alabama-based fund reported 187,888 shares owned.

Since March 13, 2015, the stock had 0 buys, and 9 selling transactions for a total of $1.56 million in net activity. Yen Mallun sold 15,000 shares worth $210,000. Scola Paul E sold 4,486 shares worth $60,336. Swank Steven S sold 5,363 shares worth $72,147. Barker Geoffrey T sold 10,000 shares worth $163,496. The insider Heath Robert H sold 5,000 shares worth $79,852.

RPX Corporation helps companies reduce patent-related risk and expense by providing a subscription patent risk management solution. The company has a market cap of $633.06 million. The Company’s patent risk management solution facilitates exchanges of value between owners and users of patents compared to transactions driven by actual or threatened litigation. It has 14.93 P/E ratio. The core of its solution is defensive patent aggregation, in which it acquires patents and licenses to patents that are being or may be asserted against its and prospective clients.