The PIPX public IP licensing company stock index came back down to earth in the first quarter of 2017.
For Q1 the PIPX index was down 8.7% after being up 11.2% and 20.4% in Q3 and Q4 2016. This compares to an up 5.5% quarter for the S&P 500.
The change in value of the component companies over Q4, range from 61.4% for Wi-Lan (WILN) to -40.7 for Marathon (MARA), Xperi (XPER) (formerly Teserra) experienced a 23.2% decline in its share. Finjan (FNJN), whose market cap does not currently qualify it for the Index, and sells cybersecurity products as well as engages in patent licensing, was 54% in the quarter.
Fewer companies are now responsible for the bulk of the performance, as size becomes even greater factor in this capitalization-weighted index and as the value of some companies lags.
After outperforming the S&P 500 in Q3 and Q4 2016, Q1 saw the PIPX decrease, but not as dramatically as in previous quarters. The value of $1 invested in the S&P 500 in Q3 2011 would now be $1.76 while the value of the same $1 invested in the PIPX would be $0.69.
Q1, gains in RPX (RPXC), which named a new CEO, and Wi-Lan shares represented substantially all the positive movement in the index, and was heavily outweighed by large decreases in valuation at Acacia (ACTG), Rambus (RMBS), InterDigital (IDCC), and Xperi carrying the index to a substantial loss.
“InterDigital, Xperi, and Rambus continue to make up the lions share of the index because of their market cap,” said Dr. Kevin Klein, Vice President and GM of Products and Licensing at VORAGO Technologies, who compiled the IP stock performance data for IP CloseUp.
“These three companies accounted for 37% of the total value of the index at the inception in 2011, today they make up over 80% of the total value of the index. InterDigital alone now accounts for over 40%, up from 15% at inception.”
Quarterly PIPX Performance, 2011-2017
For the full Q1 PIPX report, go here.
Image source: PIPX IP Stock Index