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Akoustis design updates and more +4

08:46 23-May-24

Just in case anyone is not already aware, Nvidia earnings beat on the top and bottom lines last night, leading to a 7% gain in NVDA so far.  I've no interest in the stock; even if analysts are right about AI-related growth being a multi-year trend, almost 40x next year's projected earnings is too high a price in my view.  However, I'd noted this as the first of the market's potential near term stumbling blocks on the calendar and it appears to have been cleared.

Of more interest to me is the Senate introducing a bi-partisan bill Bill S. 4389 which would provide a dollar per gallon tax credit for RNG as a transportation fuel.  I join Clean Energy in cheering this, and hope that the Senate can advance this better than the House, which stalled its version of the bill in committee.  However, Clean Energy is glossing over two important points.  First, a 2022 version from the Senate seems to have met a similar fate.  Secondly, the credit would merely replace the AFTC credits which are set to expire at the end of this year.  That said, I do think the regulatory environment is set to improve, in part due to credits from scaled back better becoming inflation adjusted next year, but Washington has consistently disappointed in this area.

The 8-K filing for today's developments provides the additional detail that the AtM program is being suspended subsequent to today's stock sale.  That's in keeping with my prior expectation that, whatever fate awaits Akoustis, it will be determined soon.

On 5/22/24 15:49, Esekla wrote:

So, Akoustis didn't even wait for the closing bell to sell more shares: 50M at just 20 cents each dilutes pre-existing ordinary shareholders by another 50%, yet the $10M in proceeds will only buy the company another few months to figure out its next step without substantially changing the available choices.  I suppose it's possible that we could see a catch up in sales with legal uncertainty out of the way, but these things usually go the other direction.

We also saw Fed minutes, which offset dovish jawboning a bit, but don't really matter.

Nokia also closed on a defense communications producer to advance its American sales.

On 5/22/24 08:20, Esekla wrote:

Akoustis has applied design updates to its product manufacturing to remove any features claimed by Qorvo patent 7,522,018 and 9,735,755.  Management says it prepared well in advance for all potential litigation outcomes and that any injunction sought by Qorvo would now only apply to legacy versions of its products.  Consequently it

does not expect the verdict will affect its ability to market its product portfolio to existing and future customers.

AKTS is up over 200% in the pre-market to trade around 43 cents.  I'm not chasing the stock, in the face of liability in excess of a year's revenue, even considering growth, and twice cash on the balance sheet.  However, I also note the rebate rate is also slightly elevated to just under 1%, and I wouldn't surprised to see the shares get back above the 50 cent placement price.  Even if management could get the same price again, the share count would probably have to at least triple.  Cutting a deal with Qorvo after bankruptcy still seems like the most likely option, but outside of that, existing shareholders could still salvage some value.

In other news, Chargepoint has announced a deal with AirBnB, which it says will make it easier for Airbnb hosts in the United States to install EV chargers at their listings.  I would think that billing would be the key factor and that is implied:

The package, exclusively offered to Airbnb hosts, includes a dedicated website offering ChargePoint hardware, charger management software, installation, and support services. For Airbnb guests, the arrangement will allow them to seamlessly charge their vehicle using the ChargePoint app, while staying at an Airbnb listing with a ChargePoint charger.

I see this as a positive step, but not one that makes me want to own CHPT at price points around $1.75.

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