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Resonant preliminary 4Q20 results -3

09:28 09-Feb-21

As a follow-up, even if Resonant got an average of $2.75 for its shares in the run-up at the end of December, which I regard as an absolute best-case scenario, that would represent over 7% dilution.  More likely the figure is closer to 9% dilution.  One never knows when a deal could be cut, or what management's motivation is for this announcement.  My guess is that it's to clear the way for insider sales.  Hopefully they've at least exercised ATM further year to date first, at triple the prices they got in fourth quarter.

Resonant has pre-announced its fourth quarter revenue with both the $600K and full-year figure of $3.2M being in-line with expectations.  More importantly, it expects 1Q21 revenue to be flat, which misses by $600M, and merely forecasts revenue for this year to be "significantly greater" than in 2020.  The market was looking for it to almost triple.  Deferred revenue at year end was $1.8M, which is a decline of 25% sequentially.  This was a key metric for me on WiFi penetration, and it doesn't show progress so far.  The company also sold $11M of stock under its ATM program, as expected, to bring cash on the balance sheet to $25M at year-end. 

RESN is back to flat after a brief pre-market spike of a few percent on the announcement.  This doesn't preclude the deal I've been wondering about, but I don't see it as a positive development, especially with microwave backhaul seeing production use.  I will be out of RESN for a nice profit unless it collapses in the short term.

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