Storm in Seattle: Typhoon Touches $155 Billion Market Cap

iPhone fans are clearly behind the handheld's touchscreen technology, and openly question the usefulness of qwerty keyboards, expecting touchscreens to dominate in the future. But truth be told we have been using touchscreens in ATM's and other devices for years now, although the revolution is picking up speed.

A little known company is Seattle is claiming they hold valuable patents to portable touch screen technology, and have managed to achieve an market capitalization three times the size of Boeing, $10 billion more than Apple, Inc, and are closing in on Microsoft.

Whats the deal? The Seattle Times is asking a few questions:

On paper, the region's second most valuable public company in mid-July was a tiny, unheard-of operation called Typhoon Touch Technologies.

This incongruity did not escape the attention of the Securities and Exchange Commission (SEC). It has halted trading in Typhoon shares for two weeks, ending next Thursday.

Typhoon, meanwhile, is suing a former SEC chief economist and business-school professor, accusing him of a "short and distort" scheme to profit from bad-mouthing the company.

The Typhoon affair may be a tempest in a teapot, but it's quite a teapot. With 6.2 billion issued shares, according to its Web site, and sporadic over-the-counter trades that lifted the stock price from 10 cents to $25 in about two weeks, the company suddenly reached a market capitalization of $155 billion. Seattle Times

I am not sure if Lehman Brother patented the catchphrase "short and distort", but it might be getting a workout in the years ahead. Who would dare question Typhoon's valuation? This guy:

The company’s prospects and practices were attacked on an investment blog early this month by Lawrence E. Harris, who spent two years as the SEC’s chief economist and now teaches finance at the University of Southern California’s Marshall School of Business. He acknowledged shorting the stock, meaning he would profit if its price falls.

Typhoon sued him July 14, alleging that when its stock price jumped instead of falling, he threatened he would use his influence at the SEC to have it investigated.

Trading in the stock might have been halted, but Typhoon’s lawsuits against Apple, Dell and Palm are moving forward. The situation is a bit reminiscent of the patent lawsuits against RIM:

Typhoon’s current business is going after computer and electronics companies with assertions of patent infringement. It says it owns “two foundational patents covering many common aspects of portable touch screen computing.

And with the trading halt in Typhoon’s stock set to expire on Thursday, investors will be fidgeting in their seats the balance of the week. Will the stock re-open? It did not trade for nearly four months earlier this year, and the company’s capital structure seems to be in a state of flux.

Stay tuned, I will be watching this one from the sidelines. But this is certainly one of the stranger episodes I have run across of late.

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SEC order adds to swirling questions around Typhoon
Seattle Times

Red Flags at Typhoon Touch Technologies
Seeking Alpha
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