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Orbital solar contract and Lumen video distribution +3

12:43 09-Jun-21

Another item of note for today is Vuzix being added to the Russell 2000 & 3000 indexes as of June 28th, thanks purely to its inflated stock price.  This typically boosts the stock, especially in rising markets, as index funds are then forced to buy it.  Index fund managers that I'm friendly with have said they are quite mechanical about the process, so it's not too surprising that VUZI is down slightly on today.  While I agree that Vuzix is an innovator, profitability is nowhere in sight for the company; to me this just one more example of Wall St. being a toxic game that has little to do with the real world.

Orbital Energy has been awarded a contract to build a 137M solar farm in Arkansas by a Fortune 100 Energy Company by early next year.  Once again, the press release may be misleadingly worded by referencing the value of the project, rather than that of the contract.  If Orbital were realizing the full $64M, that would represent over half of projected FY21 revenue, but even at a generous 7.5% gross margin, this would net the company in the neighborhood of 9 cents per share for the year, which still leaves it well below break-even.  Of course, Orbital is pursuing other such contracts, and with a rebate rate still at 6%, this is moving OEG back up above $6.  Obviously, I'm not buying it there, but I'm still not surprised to see the volatility.

Lumen has also announced an end to end video distribution product which handles encoding and dynamic ad insertion for global transmission, thereby allowing content creators to essentially just broadcast from cameras with local language support.  Lumen says this is especially suited to growing levels of content in emerging markets and I can definitely see application for sports and other live event coverage.

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