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Vuzix Blade Upgraded available & Golar update +3

08:04 01-Oct-20


A couple of minor updates to this note, and a potentially important one about Golar...

Nokia has been selected as the nationwide provider to Elisa, in Finland, and has automated 4/5G network slicing.

Vuzix highlights the use of its older M400 product for doing rounds in isolation wards in Malaysia. 

The market has rightly ignored both so far.  The real reason why I'm updating this note yet again is this report from Reuters, which mostly recaps what I've already written, but adds that Hygo "expects to resume its IPO plans within six weeks" after it receives a report from a specialist international law firm.  This is in keeping with my comments below, and I'll give company commentary more weight than a second source who floats the possibility of the IPO being scrapped altogether.  It's enough to push me further toward taking a chance on GLNG.

On 9/30/20 11:33 AM, Esekla wrote:
Vuzix has followed up yesterday's announcement with a similar one about the M4000, which is marketed enterprises and starts at $2499.  It's a long-awaited step forward, so it bears mentioning, but it doesn't change my outlook on VUZI.

On 9/29/20 6:38 PM, Esekla wrote:
A few addenda to today's news... 

Virtu's Triton execution management system was ranked #1 out 20 competitors.  However, MemX is pacing its rollout by introducing a dozen more symbols (including NOK) today, rather than all of them, which should follow in October.  MemX is about execution rather than timing, and I continue to think VIRT is currently undervalued by over 10%.

On the overvalued side is Intel, with its collaboration on a data center appliance to support cloud-native apps.  Maybe I'm just too old school of a programmer, but I have my doubts about this being the best way to engineer scalable solutions, despite the underlying NVMe over TCP protocol being solid.  Margin concerns on such an effort are probably more relevant to investors, though.  With ARM chips now moving from embedded devices to standalone computers, I guess Intel felt the need to do something to try to defend its data center market share.

Last and certainly least is approval of Resonant's latest XBAR patent.  This was completely expected, and is fundamentally almost meaningless as discussed in that note; yet the stock is up well over 15% to $2.85, probably because the the substrate uses lithium and thus is being distributed on social media amongst Tesla followers.  Yes, the market really is that stupid, at least in the short term.

On 9/29/20 11:48 AM, Esekla wrote:
Vuzix has announced the availability of latest Blade glasses now that it has received regulatory clearances.  This is a significant positive step forward, but at $900, I highly doubt that this is the mass market breakthrough that the company will eventually need if it continues to operate independently.  Thus, I'm still not a VUZI buyer at current prices; the stock is only up 3% so far today, just over $4.30, but it has gained over 70% in the past 3 months.  For those who got in at my original entry point under $2, this might represent a sell-the-news moment.  My interest would be rekindled closer to the $2.50 strike.

Golar has also issued a press release saying that Hygo's CEO has requested a leave of absence and that his duties will be temporarily be taken over by the board.  This indicated extended delay for the IPO, but I actually think that's the best course of action.  Brazilian politics are hard to predict and waiting until the dust settles makes sense.  Yesterday's ammonia energy notes have some bearing on Golar, but Brazil doesn't derive significant power from coal.  Thus, while Aramco and Rosneft may be perfect enablers for the bait and switch I warned about, I doubt the same could be said of Petrobras.  A nightmare scenario would be the current joke of an EPA using ammonia as an excuse to resurrect "clean, beautiful coal."

The Hygo prospectus indicates that only $80M of the proceeds were destined for the Barcarena Terminal.  So it's quite possible that interim financing will be arranged, which I would see as a major positive for GLNG & GMLPP, given current prices around $6.15 and below $18.  Again, my preference is for the relative safety and income of the latter, but GLNG certainly now holds more immediate upside potential, and risks remain for both.

To wrap up with news that matters in the real world, but should not to the market, Covanta has won a sustainability award, and Google is moving forward with the E.U. on its Fitbit purchase.  Though there is increasing competition, the latter is exactly as expected and doesn't change my projection for the deal to close in the spring.  In telecoms, Nokia has sealed a 5G deal with British Telecom as its largest infrastructure supplier, and Lumen will bundle Zoom to its business customers.  The former news has brought NOK back to my $4 fair value, whereas LUMN continues to languish, maybe due in part to the symbol change.  It still represents one of the market's best values in my eyes.  Finally, there's a good deal of evidence that megacaps are looking past the pandemic to invest in India, which has relatively low mortality rates, probably due to those same investment-worthy demographics.  There's a world of difference between their investment horizons & finances and those of Ebix.  Thus, I am not interested in even a several month dead cat bounce, but reader feedback indicates that it's worth mentioning.  My opinion is that Golar's is the only actionable news here, if one is up to the risk.  Know thy self when investing.