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RESN and communications developments ?3

20:19 02-Feb-21


Amdocs has added another data point on 5G development with a slew of wins, particularly with T-mobile, Charter's Spectrum Mobile, Israel's Cellcom and a beachhead in Indonesia released with its fiscal first quarter earnings:
The contracts were all expected with the possible exception of the last.  The dividend increase is nothing special by Amdocs standards and doesn't quite make 2% yield at $73, which is unchanged after hourse.  This remains a good business, but in my October introduction in the mid-fifties I noted the need to build positions before the C-band auction.  That time is past now, and my main interest short of a dramatic price change will be in 5G & CBRS development, rather than as an investment.

Finally, I'll note that Vuzix has made its first move toward the dilution I've always expected with a $300M shelf filing for stock and warrants.  The market hasn't cared much about dilution lately, and VUZI shares didn't move much after hours.  Maybe the latest press release mattered to someone.  As always, it will be the terms of anything that gets sold which will matter.

On 2/2/21 10:39 AM, Esekla wrote:
RESN is up 14% this morning to trade above $6.50.  A possible contributing factor is the entry of MediaTek into the 5G mm wave front end market.  However, it's worth noting that Akoustis, which I've also kept an eye on over the years has had a breakout quarter and including recent design wins, mostly in WiFi.  AKTS is up a similar percentage.  I have no way of knowing what solution MediaTek is using at present, and I'm not inclined to chase RESN.  For the record, I also wouldn't touch AKTS anywhere near current prices in the midst of dilution and ahead of potential mass manufacturing challenges that management glossed over in its call yesterday.

Ultimately, the two just aren't very comparable investment prospects.  It makes sense that Akoustis is first to market, particularly with WiFi, where size is less of a concern than in the more valuable handset market, since it is selling filters directly, rather than designs licensed to third parties.  Resonant is going to cut a deal, or not, by 2023, and if so, then we'll see how well management takes care of shareholders.  Akoustis is also currently bringing in more than Resonant in part because Resonant went for prepayments, which can be shareholder friendly in the event of a deal.  Akoustis locking its wafer level packaging process is a big deal, and I suspect that's Resonant's next milestone with Murata.  Resonant's design software is another potentially differentiating factor.  We'll see how it all plays out, and I certainly think this market segment has room for both.

Of course the short interest in both stocks is probably also a contributing factor.  The shorted float on RESN was 11% and AKTS has double that; they sport rebate rates of 5.5% and 11%, respectively.  Thus, while I'm at it, I'll also document Nokia's technological and commercial wins in fiber and advancement in Singapore as further evidence of both telecom progress and the danger of chasing.  NOK is down 9% this morning as the gamma trade unwinds, and I see no opportunity here.