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adding AKTS, Resonant WaveX software and pricing notes +3

09:30 22-Jun-21

PPL has announced leadership for NEC once the transaction is complete.  I don't see this as stock-moving, but it is a sign of the progress of I've anticipated. 

The same goes for Lumen's Microsoft Teams offering, but I think it has medium-term potential.  I may do a much larger write up on the shape of work post-pandemic, but the final paragraph of this note implies the broad strokes.

On the other hand, Powell's testimony looks like a non-event, though it does directly reference the participation that I've been harping on for a long time now.

Finally, India's new e-commerce rules really serve domestic firms, leaving Ebix with the inside track.

The most interesting news items is the SCotUS decision on NCAA athlete compensation.  I could go on for days about this, and am happy to discuss.  For this forum, suffice it to say that the only way that I could agree that the change is "not nearly enough," would be if those same standards were applied to all workers.  I quit programming for others because I found that the financiers controlling even the smallest startups would never give me meaningful equity for my code.  That applies to plenty of others who actually do the work.  It's not going to change in the foreseeable future, and thus is not market moving just yet.  However, the trend will have a negative market effect eventually.

I hope you all had a happy Juneteenth.  I am adding AKTS to the website, but not yet to my portfolios on the news that it has landed its first foundry agreement for handset applications.  Volume production is expected to ramp in 2H22, after Akoustis ships chip-scale packaged samples to the customer in the second half of this year.  I held off on adding the symbol to the website, expecting single-digit prices, which we saw, but entry into the mobile market is too big a milestone to ignore.  There's still a lot that could go wrong here, but it's time that news on this company to get tracked separately.  For the record, I also continue to think the market is plenty large enough for both Akoustis and Resonant, which has upgraded its design software.  I am also beginning to look more favorably on theories about a combination between the two, if Murata doesn't scoop up the latter first.

On the other hand, expect to hear less from me about Orbital as it starts adopting the Vuzix modus operandi of announcing every business detail while glossing over the lack of impact.  With a 12% rebate rate and addition to the Russel 3000 index, OEG could easily rise to the same extent that VUZI has, but a chilling market would still make that unsustainable over the long term.  For the record, the rebate rate on VUZI is now around 1.5% and trading around half the highs it saw just two months ago. 

Instead, I continue to favor utilities like PPL and LUMN, both of which saw substantial dips last week.  Expect PPL's NEC negotiations to drag on.  However, if it can drag Kentucky into the renewable age, I have little doubt that the transaction will eventually proceed favorably, setting PPL up to make the same moves that AES is completing now, with an eventually similar stock trajectory.  In the meantime, any extended delay in Rhode Island just means the possibility of extra dividends at the current rate.

On the macro stage, we'll have Powell testifying before Congress on Tuesday, as he angles for another term at the helm of the FOMC in February.  Although I projected Fed willingness to crash the market, I regard more hawkish statements from other Fed official recently more as angles on their own succession plans, rather than indicators of policy.  For that we'll have to look at bank stress tests on Thursday.  Those may have bearing on BGCP & VIRT, which are also on sale.  For the record, I see EBIX as having similar options-related volatility and also look for it to regain recent highs.

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