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Only One of These Stocks Won’t Be a Winner: LDK Solar Co., Ltd (ADR) (LDK), Navidea Biopharmaceuticals Inc (NAVB) and More

Ten days and counting. The Dow Jones Industrial Average added to its string of consecutive days moving higher, notching another 83-point gain to close above 14,500 for the first time ever. Jobless claims came in lower than anticipated yesterday and a bunch more economic data is due out today so we could see the index extend its winning streak to yet another day.

LDK Solar Co., Ltd (ADR) (NYSE:LDK)These three stocks had nothing to celebrate, however. But don’t go running over the cliff with them like a bunch of lemmings just yet — this could just be a temporary situation. Let’s first see whether they had good reason to fall as panic-fueled routs can sometimes lead to excellent buying opportunities.

Company % Change
VirnetX (NYSEMKT:VHC) (27.8%)
LDK Solar Co., Ltd (ADR) (NYSE:LDK) (10.1%)
Navidea Biopharmaceuticals Inc (NYSEMKT:NAVB) (7.9%)

That’s nuts
Proving it doesn’t matter if you win the battle only to lose the war, VirnetX announced its patents were validated by a jury, but it nevertheless lost its patent infringement case against Cisco Systems, Inc. (NASDAQ:CSCO) because the jury says it didn’t violate them.

VirnetX claims to essentially owns the rights to the entire family of 4G and LTE security standards and has enjoyed a string of victories over industry behemoths such as Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), the latter of which got socked with a $368 million penalty because its FaceTime software violated VirnetX’s patents. Those are the same ones that Cisco was accused of infringing upon.

But this time the jury ruled that, although VirnetX’s patents are valid over the prior art claims Cisco advanced, the network equipment maker’s routers that run virtual private networks didn’t violate them. Seems a bit of a head scratcher in reasoning, but VirnetX says it’s still going to assert its patents and license the technology and, besides, the Apple decision remains unaffected.

While disappointing certainly, the market’s reaction seems a bit overblown. After a string of wins, one loss should hardly cause the elimination of more than a quarter of VirnetX’s market cap.

Lights out
With Suntech Power Holdings Co., Ltd. (ADR) (NYSE:STP) teetering on the brink of bankruptcy because the Chinese government won’t bail it out, the prospects for other solar shops surviving are diminishing as well. LDK Solar Co., Ltd (ADR) (NYSE:LDK) suffered a loss on the market yesterday second only to Suntech’s because it could soon be in the same financial crisis as its peer.

Suntech is expected to be pushed into default today over missed bond payments and LDK could face a similar situation next year. The Chinese government has suggested consolidation is needed in the industry and its decision to let Suntech go under rather than throw good money after bad is the first tangible evidence that it was serious.

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