Last week, Microsoft paid $1.06B to purchase and license about 1,100 AOL patents. Putting the issues of purchase premium and strategy aside for another discussion, this transaction presents an interesting case on IP value expectations and communications.
On its latest balance sheet, AOL reported its book value of "Intangible Assets" as $132M. Analysts had widely handicapped the AOP patent portfolio to be a $300M asset. AOL's stock had been trading around $18 per share since February, implying a market capitalization of about $1.7B given the 95M outstanding shares.
Since the transaction was announced, the stock has been mostly above $25 (or $2.4B cap). The $700M jump is almost exactly the difference between the deal price of $1.06B and the expectation of $300M.
How does your firm communicate the value of its IP to external stakeholders?