Georgi Kamburov

e.Digital Corp. (OTCMKTS:EDIG) Surges To New 52-week High

by Georgi Kamburov December 23, 2014

Yesterday the stock of e.Digital Corp. (OTCMKTS:EDIG, EDIG message board) accelerated its ascent even further and added 47% to its value closing at exactly 10 cents. The daily volume was just short of 4 million shares surpassing the 30-day average for the company by more than 9 times. Just for the last three sessions the stock has more than doubled its price while yesterday it posted a new 52-week high of $0.1095.

The explosive run up the chart was sparked by EDIG's PR message published on December 15. In it the company announced that the Markman hearing that took place on December 12 had ruled in their favor. Before you get too excited though there are some things that must be taken into consideration.

EDIG should be regarded solely as a patent play. It is true that the company also provided products and services through their eVU mobile entertainment devices but they plan to terminate that part of their operations by September 2015. At least for now EDIG have sufficient resources to fund their 17 complaints of patent infringement. The latest quarterly report showed that at the end of September the company had:

• $1.8 million cash
• $1.9 million current assets
• $221 thousand current liabilities
• $394 thousand revenues
• $172 thousand net loss

So far EDIG have only one licensing agreement but investors are hoping that the favorable hearing could lead to more. There is no guarantee that this will be the case though. It may only take one lost case or another period without any updates from the company to plunge the stock into a steep downtrend.

Even if you believe in the potential of EDIG's Flash-R portfolio of patents it may be for the best to use caution. Decide on appropriate time horizons for you trades and don’t underestimate the risks around the stock.

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