mara - february 11, 2015
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MARA - February 11, 2015TRANSCRIPT
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MARATHON PATENT GROUP (MARA)
February 11, 2015
David Hoff Founder
First Legal Setback, a Settlement, and a Board Resignation
IP HAWK
David Hoff [email protected]
@theiphawk http://theiphawk.blogspot.com
I am long MARA. I have not been paid to prepare or disseminate this report by Marathon or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.
Thoughts From the Hawk
Key Data
Price $6.70
TTM Revenue $24.06mm
Enterprise Value $93.12mm
Shares Outstanding 13.64mm
Shares Fully Diluted 19.56mm
Float 9.35mm
52 Week Range $2.78-9.73
3 Month Avg. Volume 112,253
Marathon Patent Group (MARA) issued a press release yesterday afternoon announcing an adverse ruling in their subsidiary
TLI Communications. The Virginia court granted defendants motion to dismiss the cases based on the patent being found
invalid due to an abstract idea and lacks an inventive concept and also cited the SCOTUS decision Alice. A copy of the
opinion can be found here. The cases in Virginia are now dismissed. The company in the press release stated they plan to
appeal the decision. MARA also announced they filed suit in Germany on Monday February 9th, likely in conjunction with
the US dismissal. The German court is not impacted by the SCOTUS Alice decision.
My opinion of the development: MARA is not going to win every single legal decision. By diversifying their patent
holdings they are able to mitigate the effects of a negative decision. The company will be faced with more negative
decisions in the future. Like baseball, a one for three average is great and will get you inducted into the hall of fame. A one
for three average in their cases should yield a substantial amount of revenue to MARA in the future.
There was a filing yesterday in the East Texas case with subsidiary Vantage Point and defendant Texas Instruments, which
shows a successful mediation between the parties. Texas Instruments filed an IPR challenging the patent claims at the patent
office, which was not instituted for review on January 6th, 2015. A Markman hearing was held on January 29th, 2015, which
I anticipate an order construing the claims within the next 3 months. I view this as an excellent development and is right in
the sweet spot where MARA is able to negotiate agreements with parties. It is further proof that Markman hearings and
positive developments at the patent office will derive settlements. It could be the first of many in the Vantage Point
subsidiary.
In an 8K filed this morning John Stetson tendered his resignation from his positions Secretary, EVP and a member of the
Board of Directors. A resignation letter was also attached, in which he was confident in the company due to the recent
$50mm funding and company’s execution over the past 2.5 years. He also wrote he will remain a large shareholder and
accessible to the company in the future. I view the development as a non-event. I expect the company to upgrade their BOD
with a new addition within the next few weeks. John is fairly young and likely wants to pursue other opportunities on a full
time basis. Replacing him with a industry veteran will be a welcome addition to the BOD.