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Resonant switches to KPMG and new Fitbit watches ?3

14:14 25-Aug-20

Fitbit's CEO gave a party-line answer in a CNBC interview, saying that he expects the Google buyout to close this year.  If true, that would make current arbitrage pricing attractive.

However, I regard this as no more meaningful than Energy Recovery's latest press release about a "record breaking" floating desalination plant for the Saudis.  It's good that it's supposed to be operational this year, but the water volume and dollar amount are small by non-floating standards.

Resonant is switching to KPMG as its auditor, effective immediately.  Going with one of the big four firms this early in the growth cycle can sometimes signal M&A talks, and Skyworks, with whom Resonant has (a rocky) history, also uses KPMG.  For what it's worth, Qorvo, who would be the other leading candidate dumped KPMG for EY a couple of years ago, and Murata uses Deloitte. 

Some investors may choose to gamble on a transaction, and Resonant appears to have the technology.  However, these things often take a year or more to play out and increased WiFi6 shipments starting around the turn of the year may be reason enough for the auditor switch.  Personally, I will hold out in the hope for some market realism and a price under $2.50, and preferably closer to $1.50 mark where management diluted shareholders in the past.

That said, I have to admit that this is a market where GRoDT investments can do very well.  Furthermore, I still like Resonant's business model better than those of device makers like Vuzix and eMagin, even though these are in vogue thanks to government support of domestic manufacturing.  Vuzix continues to get additional attention due to the pandemic as well.

As if to underscore my point about manufacturers, Fitbit has introduced a new smart watch called Sense along with a new version of the Versa, both of which include a free six months of ithe company's Premium subscription service.  Even CenturyLink is using its connections to push subscriptions these days.  The Sense also adds the world's first electrodermal activity (EDA) sensor for stress tracking.  I can report that none of my test user still use their Fitbits, due to hardware problems, rather media inspired reasons.  As with RESN, FIT is still a bit highly priced for me to open any new positions.

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