Why Is Meme Favorite KOSS Stock Soaring 40% Today?

  • Koss (KOSS) has finally reached an agreement with Apple (AAPL).
  • The headphone producer had accused the tech giant of multiple patent infringements.
  • Now the former meme stock is surging on news of the settlement.
KOSS stock - Why Is Meme Favorite KOSS Stock Soaring 40% Today?

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Koss (NASDAQ:KOSS) stock is surging today after agreeing to settle its legal battle with Apple (NASDAQ:AAPL). KOSS Stock hasn’t seen the same type of price action as peers Gamestop (NYSE:GME) and AMC (NYSE:AMC) since the ironic meme stock rise of 2021. In fact, it hasn’t seen any real action since March 2022.

But today brought the news that Koss has finally reached an agreement with Apple over alleged patent infringements regarding the AirPod design. This announcement comes just as the two tech companies were preparing to do battle in court.

What’s Happening With KOSS Stock

KOSS Stock didn’t immediately when markets opened today. But after an hour of trading, it quickly shot up, raising 55% in less than an hour. While this initial rally has cooled off, KOSS remains in the green. As of this writing, it is up 38% for the day and its current trajectory hints at another rally.

With no company-specific catalysts, it’s been a quiet year for Koss. But with the resolution of the company’s biggest story since 2020, social media interest in the stock has been renewed. Let’s dive into what’s going on with KOSS stock and why investors should be watching closely.

The Great AirPod Dispute Resolved

Were it not for the recent resolution, the court case between Koss and Apple would have begun today.

Over the weekend, though, the two companies filed a Joint Stipulation of Dismissal. According to the filing:

The parties have resolved all matters in controversy between them. Accordingly, Koss and Apple stipulate that the claims brought by Koss against Apple should be dismissed WITH PREJUDICE and the claims brought by Apple against Koss in the above captioned action (including any consolidated action) should be dismissed WITHOUT PREJUDICE.

Koss first filed the lawsuit in July 2020, alleging that Apple’s AirPods, one of the year’s most popular products, infringed upon its Striva in-ear and over-ear headphones patents. Bloomberg Law reports that “Koss asserted that it pioneered the technology for modern wireless headphones, including an internal microphone that reacts to voice prompts, headphone-touch controls, and Wi-Fi connectivity.”

The accuser also alleged that this applied to other headphone producers such as Bose, Skullcandy and JLab Audio. A few months later, KOSS stock surged when the Patent Trial and Appeal Board decided against instituting reviews of two patents that Apple had challenged.

While neither company has made the details of the settlement available, retail investors are clearly excited that Koss is able to move forward. The stock has picked up significant traction on social media with many users calling for bullish plays on it.

Moreover, it seems that the r/WallStreetBets crowd that helped push this meme stock up in early 2022 are at it again. KOSS stock has shed almost 45% of its value since last year, making it a prime beaten down play. And the fact that the company just challenged a tech sector giant only makes it more appealing to contrarian investors.

The Bottom Line

As with all meme stocks, evaluating long-term growth potential is difficult. That’s especially true for Koss as we don’t know the results of the settlement. If the company has received a payout from Apple for the alleged infringement, it can help the company grow. But if Koss decided that they had no real case against the much larger company, investors likely won’t see any actual growth catalysts in the near future.

KOSS stock is a name to watch but investors should proceed with caution.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/07/why-is-meme-favorite-koss-stock-soaring-40-today/.

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