Disclosure: I am long INVN.
Invensense (INVN) had nothing but good news this past week, and that could be very bad news for short sellers. On Wednesday, the company got a respite from its legal battle with STMicroelectronics (STM) after a court agreed to stay the proceedings of a patent lawsuit while the United States Patent Office (USPTO) looks into the validity of those patents, as this excerpt from Invensense's press release explains:
The USPTO has already determined that substantial questions of patentability exist for seven of the nine patents asserted by ST [STM], and USPTO office actions have already issued for four of the patent reexamination requests. The USPTO has rejected all of ST`s asserted claims in those office actions. In view of the pending reexaminations, the United States District Court for the Northern California agreed with InvenSense that it is unnecessary to currently proceed with the litigation initiated by ST and has granted InvenSense`s motion to stay the litigation.
Then on Friday speculation that Invensense's chips would find their way into Apple's (AAPL) devices was renewed. Wedge Partners, a technology and media focused firm based in Denver, reportedly believes that the new iPhone 5 will use Invensense's gyroscopes. If true, this would be a huge opportunity for Invensense to gain the lion's share of the gyroscopic MEMS market. The company is already a supplier to big names in the mobile devices space including Google's (GOOG) Nexus tablets, Amazon's (AMZN) Kindles, and Samsung's (SSNLF.PK) Galaxy phones, but a deal with Apple would be a new supplier relationship. Currently Apple uses competitor STMicro's chips. [Read on here]