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Intel VUZI Preferred Share redemption ?3

18:23 29-Jan-21


In a typical hope nobody notices the Friday night filing, Vuzix has disclosed that Intel redeemed and sold 4.9626M preferred shares.  In conjunction with the settlement, Vuzix has paid Intel $10M in cash (about 40% of what's on it's balance sheet) to settle the outstanding dividends. 

I had been aware of and even written about this position many years ago when I short VUZI, but to be honest, I had assumed that the position had already been settled in the intervening time.  In any case, I've been clear that VUZI has long been well above any price that would interest on the long side.  Still, I find it inexcusable that management did not mention the liability in the financial discussion of each earnings call.  If you've ever wondered why I've had such a critical tone of Vuzix as it pumped the stock, here's an example.

That said, this could actually bring some stability to VUZI.  Note that VUZI is NOT amongst the shares being restricted for unusual action by many brokers.  The 4.9M shares is most of the shorted float, and I wouldn't be at all surprised if Intel was hedging the position.  The remaining price increase could easily be sticky as it has been with LUMN, all else being equal in the market.  We'll see what happens.