Why Phunware's Shares Jumped Again Today

What happened

Shares of Phunware (NASDAQ: PHUN) made another big move on Monday, following up on huge volatility over the previous week. This time, another patent-related announcement moved the stock as much as 18.4% higher. By 12:35 p.m. EDT, Phunware's shares had fallen back to a 7.7% gain.

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So what

Last week, Phunware's stock soared due to the U.S. Patent and Trademark Office issuing a new patent, describing an extremely fine-grained location system that may help the company make a new kind of game. Today, Phunware announced a monetization partnership for its patent portfolio, adding moneymaking muscle to inventions like the pinpoint-accuracy location system. The company will work with patent-monetization specialist Endpoint IP to find other companies willing to pay for a license to use Phunware's 16 patented technologies (and six pending patent applications).

Now what

It's good to see Phunware taking steps toward a moneymaking business model, but we're still talking about baby steps here. Endpoint IP isn't exactly a household name, and it remains to be seen exactly how effective the firm's license sales and enforcement services can be.

Give this partnership a couple of quarters to mature and start producing results. Phunware still looks more like a gambling chip than a serious investment.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.