Aiming to become the global leader in chip-scale photonic solutions by deploying Optical Interposer technology to enable the seamless integration of electronics and photonics for a broad range of vertical market applications
Message: What happened
There are many examples that illustrate the importance for companies to take the step to list on the NASDAQ only when their underlying fundamentals dictate success.
POET in my opinion is unique in that their ability to ramp production very quickly is associated with the demonstated capabilities of Sanan. The Chinese understand this and this is why POET is already being approached to sell an interest in SPX even at this early stage of preproduction.
My siblings have been voicing concerns about the SP and this is my explaination that might be of interest here.
5 years ago POET did a financing with HG Wainwright. They had taken the GaAs monolithic platform as far as they could on their own. GaAs is an 850nm based wavelength used for short reach applications using multimode fiber which by that time had limited application for the application POET was attempting to develop. Earlier that year Suresh acquired the Denselight Fabrication facility in Singapore and had bought out BB Photonics who had a filtering technology that had a wide range of wavelength filtering capability. Suresh took that application and expanded it to what is now known as the Optical Interposer Platform. An extremely versatile platform that is able to mix and match different material sets allowing the application of a wide range of wavelength from visible to beyond infrared which allows for the transmission of photonics in all wavelengths that are used today from short range to long range, sensing applications use for autonomous vehicles to medical wearables.
It does all this without the need for lenses and manual alignment. The technology is sound and is something the industry needs.
Back to the current share price as I started to say and got sidetracked. When POET announced a financing with Wainwright the price had not been set. It would be set by the market. Wainwright heavily shorted the stock and brought the share price down from .76 to the low .40’s where they financed POET at the max allowable discount to market.
So they bought shares at .36 and received warrants with a 5 year term at .52. It was widely believed that once they had exercised the warrants the share price would stabilize but unfortunately they appear to be selling those shares which they paid .52 for. Wainwright is considered fast money. They don’t care about the underlying stock they just look at the transaction and making money quickly. So they have made a fortune off of trading POET. Their shorts were always covered by the warrants. Now that the warrants have been exercised they are selling those shares and will be out of the stock for good. Many believed they would hang on to the stock but that is not what appears to be happening.
So it is likely that they will be gone by the end of the year.
Suresh the CEO revealed in the Q&A that I sent you that their joint venture in China called SPX (Super Photonics) will be listed on an exchange in China and that POET is being approached to sell some of their interest in the Joint venture. The Initial Public offering could value that IPO at a very high pricing. Valuations in China for high tech companies are 10 to 20 times earnings. The company who is footing the cost to set up production in China is the biggest suppliers of LED’s in the world… A very big company with huge capacity. The only thing POET brings table is the optical interposer which in itself is a very big indicator of the value of the optical interposer.
Spx production is going to ramp this year. The facility is going to be expanded as needed. Recognize the level of throughput that can be achieved in an automated fabrication flow. The demand is there and the market in China is massive right now for what they are building.
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