Neonode Inc. (NASDAQ:NEON) shares crashed 76.77% to $5 in pre-market trading on Thursday, despite announcing it expects $15-20 million from a Samsung Electronics patent settlement.
Check out the current price of NEON stock here.
Settlement Details Drive Initial Gains
The Stockholm-based company closed at $21.52 on Thursday, according to Benzinga Pro data, marking a 4.67% increase during regular trading hours. Neonode will receive 50% of the net proceeds from a lawsuit settlement between Samsung and Aequitas Smartphone LLC, a subsidiary of Aequitas Technologies.
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The settlement stems from a 2020 patent infringement case against Samsung in the U.S. District Court for the Western District of Texas. The court dismissed the case on September 2 following the settlement.
Patent Assignment Background
The technology company assigned its patent portfolio to an unrelated third party, Aequitas Technologies, in May 2019 under terms entitling the company to 50% of net licensing proceeds. The Assignment Agreement included brokerage fee provisions for the original transfer.
After-Hours Volatility Concerns
The dramatic decline suggests investor uncertainty despite positive settlement news. Trading volume averaged 290,680 shares, with the stock trading in a 52-week range of $5.73-$29.90. The market capitalization stands at $361.17 million.
Neonode’s board hasn’t determined the settlement proceeds usage. The company continues evaluating tax implications and financial considerations affecting the final net amount.
A separate patent litigation against Apple Inc. (NASDAQ:AAPL) remains pending in the Northern District of California.
With a strong Momentum in the 97th percentile, Benzinga’s Edge Stock Rankings indicate that NEON is experiencing short-term consolidation along with medium and long-term upward movement. Here is how the stock fares on other parameters.
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