Bad Timing? Roku Sued for Patent Infringement After Cathie Wood's $7.3M Investment...

Oof, talk about poor timing huh? After scooping up a whopping $7.3 million in Roku’s (NASDAQ:ROKU) stock, Cathie Woods is definitely going to need a strong morning mimosa when she finds out her investment is now in a bit of a pickle… and not the tasty kind. 

(Source: Tenor) 

Why? Well because as of this morning, Roku is officially being sued for patent infringement by the HEVC Advance Patent Pool. “F&$k!” - Cathie Wood probably. 

(Source: Broadband TV News) 

Now we all know Cathie is the queen of risky tech investments, but this breaking news just proves that she really is walking the walk and talking the talk on risk. 

Because even though the HEVC Advance Patent Pool literally sounds like a fancy club where tech nerds gather around trading patents like Pokémon cards… These guys are big players in the industry. With over 43 licensors and over 23,000 patents covering advanced technological edges for Google, Microsoft, and Sony, HEVC Advance is pulling out the big guns and accusing Roku’s streaming devices of infringing on patents essential to the HEVC/H.265 video coding standard.

(Source: Giphy) 

In simpler terms, Roku’s gadgets allegedly use tech they don’t have the rights to, and HEVC Advance is not amused. They’ve tried to play nice for a while, but Roku (following the same logic of my high school crush) basically ghosted them. Naturally, this has pissed HEVC off even more and they are now reaching for compensation on past royalties and an injunction to stop Roku from continuing to patent ways.

(Source: Giphy) 

So in short, not only is Roku, the company itself, not looking good… but any bullish stance on the company isn’t looking that hot either. 

Which is why, it’s hard not to fantasize what in the actual heck Cathie Woods is thinking this morning after buying 127,540 shares of Roku amounting to a cool $7.3 million. (Not to mention the additional $5.3 million she snatched up prior to her recent splurge). 

(Source: Benzinga) 

As reported in one of our previous articles, the bet to double down on this Netflix competitor was interesting at the start… but now with Roku’s newfound legal drama, it makes this bold move even more of a head-scratcher. Especially considering that before this patent dilemma, Roku’s stock has been on a wild ride full of uncertainty. 

You see, despite occasional bursts of profitability, Roku struggles to maintain consistent profits. Their revenue is growing, sure, but so are their expenses. And just like every American under the infamous Bidenomics regime… they just can’t keep up with the cost of living.  

(Source: Imgflip) 

For instance, in the first quarter of this year, Roku reported $882 million in revenue, up 19% from last year. They added 1.6 million new streaming households, bringing the total to 81.6 million. That’s a lot of people watching a lot of TV. But despite the growth, they still posted a net loss of over $51 million. Think, running a marathon and getting a cramp right before the finish line. Sucks to suck… 

(Source: Yahoo Finance) 

So given this, why on God's green Earth did Cathie Wood dive headfirst into this mess? Well some may say she’s a degenerate in some way  (possibly spending too much time on Wall Street Bets, who knows). But it’s no secret she’s known for her high-risk, high-reward strategy. 

(Source: Pinterest) 

Remember when she bet big on Tesla and everyone thought she was nuts? Yeah, she ended up making around $100 million on that trade per reports. But still not every bet pays off, and her track record has about the same amount of flops Jennifer Aniston has had in her movie career. 

Which is why Morningstar recently dubbed ARK Invest the “top wealth destroyer” of the past decade, with losses totaling $14 billion. 

(Source: Business Insider) 

Goodness, talk about a slap in the face. When it comes to the world of money management, an insult like that tops the list. 

Yet, Wood’s investment in Roku could be another one of those gambles. Maybe she sees potential where others see chaos. Or maybe it’s just another chapter in the epic tale of “Cathie’s Crazy Bets.” Only time will tell. 

(Source: Giphy) 

But in the meantime, Roku’s recent legal battles and inconsistent profitability definitely make it a risky play, even for someone with Wood’s reputation. It’s like betting on a horse that’s fast but has a tendency to trip. The lawsuit could lead to hefty fines and an injunction, putting a serious dent in Roku’s plans… while throwing a massive curve ball at the Queen of Wealth Destroyer herself. 

So as trading resumes this morning and you’re thinking about taking a stab at Roku, just remember the biscuit is not always worth the risk. And if you’re Cathie Wood, well, maybe it’s time to check the warranty on that crystal ball gurrrl…

(Source: Giphy) 

Stocks.News holds positions in Tesla as mentioned in the article.