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Resonant dilutes, and shopping MVIS -5


The RESN share placement has priced at $4.25, which is a 17% discount to yesterday's closing price.  It is also going to be over 25% dilution.  Hopefully this gives Resonant enough cash to make it to some real income.  At $4.25 and a PE of 30, the company would have to start earning over 14 cents per share, or about $1.7M next year.  There has been no indication from the company about what might be achievable, but such a figure doesn't seem too far fetched to me.  The pre-market makes it looks like traders are going to use the $4.25 price as a floor, which still doesn't make the shares attractive to me.

Other items of note this morning: Bernstein has downgraded LPL to Market Perform.  I may publish a buy-the-dips article on what is going on with LG Display.  It would also mention AU Optronics outperforming other display makers, though my outlook for AUO remains unchanged.

On 09/08/2016 04:29 PM, Esekla wrote:

As expected, Resonant is diluting shareholders.  Shares are already starting to drop slightly.  We should know by the weekend what price it gets from institutional investors, and I would not be inclined to pay more than that.

By contrast, MicroVision has been somewhat more discreet with its capital.  The company's latest presentation continues to affirm new product launches this year, even as shares have dropped.  While the broader market remains a concern, there should be relatively little market sympathy, just like with WPRT, and the 13.5% rebate rate should mitigate downside.  This is still a GRoDT stock, and much will depend on what the actual products turn out to be.  Still, I strongly suspect that the potential upside significantly outweighs any further risk at this point.