 Michael Seto |
Cuban took a 7.4% stake in the company. If he paid the market rate when the stock was trading around $3 last week, then Cuban paid ~$3 million, which is pocket change for him. The stock shot up to $4 today on the news so he's already made some money.
But, we don't think he's in it for a quick, small return on his money. He's aiming for a much bigger payout.
In March, Vringo merged with Innovate/Protect, which is basically a patent troll. It ended up owning search-monetization patents from Lycos. It's using those patents in lawsuits with Google, AOL, Gannett, Target and IAC, according to a Vringo press release.
Suing Google over years-old patents that aren't being used is absurd. But that might be the appeal to Cuban.
When Yahoo decided to sue Facebook over patents, Cuban wrote that his initial reaction was "disdain." The more he thought about, the more he liked it, though.
It's such a terrible, and stupid lawsuit, he says, that it will do a good job of exposing how busted our intellectual property system is. He continued, saying:
Change is needed. However, its not going to come from our government. The lobbyists have taken over. One of the symptoms of the illness patents have caused the technology industry is the explosion of lobbyists pushing the agenda of big patent portfolio holders. They are not going to let our lawmakers give an inch.
Rather than originating in Congress, its going to take a consumer uprising to cause change. What better way to create a consumer uprising than to financially cripple and possibly put out of business the largest social network on the planet?
If Yahoo were to be awarded 50 Billion Dollars from Facebook, I think consumers may take notice. And don’t think that 50B should be an impossibility.
We've asked Cuban for a comment on his Vringo position, but haven't heard back from him.
However, it's not hard to figure out what's happening here. Rather than sit on the sidelines and cheer for Yahoo to blow up Facebook, Cuban is jumping in on his own. He's going to try and nuke Google and cause a big change in the patent law.
If it works, it makes him a little money, and he gets to change the world. If not, he could still end up breaking even.
