George Soros' fund buys some Openwave
After previously investing in the mobile software maker without much success, the fund tries again.
George Soros, founder of the second-best-performing hedge fund of all time, the Quantum Fund, bought 6 million shares of Openwave (OPWV) on April 10 at approximately $2.41 per share, as reported by GuruFocus Real Time Picks.
Soros had previously built up a position of 176,100 shares in the first quarter of 2010 around the price of $2.50, and gradually sold out as the price never substantially increased.
On April 16, Openwave announced that it would sell one of its three core units -- the mediation and messaging products business -- to a private equity firm. The company had announced that it was positioning itself for such a sale in its second-quarter fiscal 2012 results issued February 1.
Openwave makes innovative software for the rapidly expanding mobile industry, but it has struggled to sell its products. In second quarter 2012, it reported revenue of $35.9 million, compared to $52.4 million the previous quarter and $39.9 million the same quarter the previous year. Bookings were $20.4 million, down from $23.7 million the previous quarter, which included a significant intellectual property licensing agreement.
The company's primary focus is creating software that streamlines data architecture to help mobile operators capture more revenue than it will if 4G networks continue to expand on current mobile network carrier design, which Openwave calls "cluttered."
The market is enormous: Nearly 70% of time spent on smartphone devices now involves mobile data, and the number of 3G users rose 35% year over year. CEO Mike Mulica said in the first quarter that the company was working closely with customers and partners to "demonstrate the value of our products and technologies."
The company now believes that its primary strength lies in its intellectual property portfolio, which it will rename Unwired Planet. The portfolio consists of approximately 200 U.S. and foreign patents and another approximately 75 pending applications.
On August 31, the company went up against Apple (AAPL) and Research In Motion (RIMM) in a lawsuit claiming that various editions of no less than the iPhone, iPad and BlackBerry Curve and Blackberry PlayBook infringe on Openwave's patents.
Openwave stock closed at $2.50 on Thursday.
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