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market re-rated the stock .. but I bit...here's whyOn Thursday, as the volume exploded to an all-time historical high, I sold some shares near the top. This was not market timing per se. I could see the market re-rating the base-level price to $3.50'ish, and as the prices got somewhat beyond that I sold some shares. I was pretty conservative in what I sold because the ingredients driving the bizarre action could have been a leak or social media, and those could both drive the price higher. I discounted a leak, because the CC commentary was so lame and, even if there was let's say, a streaming deal, the odds of a big US-streaming company leaking are so small and the aggressive volume was way too large for a rogue law-breaker chatting to his 3rd cousin of his mother's ex-boyfriend. On Friday, I reconsidered and I bought back all the shares I had sold on Thursday and used some of the reserve cash I've been holding from my previous PXLW sales. While I think the company is probably in the grip of a rapacious Junta, there were a couple things from the CC that I didn't find surprising but the market probably found compelling enough to re-rate by 50c. As I wrote after the CC, the numbers were about as good as I could have expected. That's true for the next Q, too. DeBonis' guidance is that projector OEM inventories are almost nonexistent, and OEM's assurance of chip supply is a sufficient problem that OEM's literal sales volume could start to be impacted. This means that PXLW' projector chip revenues are probably going to be close to as strong as capacity through much of the year. The projector market volume and per-chp revenue is shrinking from the pre-pandemic period, but for an investor on the sidelines, the change of projector fortunes between the recent past and the near-term future is substantially positive. Whereas anyone following the company expected something like this, institutional buyers who have to place bigger orders might need this clarity, and now they got it. As I wrote, I doubt PXLW is going to lose money as we get into 2H. So, what's that worth? It wouldn't suprise me if DeBonis' strategy gets rated under $3, but it also wouldn't suprise me if it got to $4. Initially after the CC, I didn't expect the market to be surprised by the change in projector fortunes....but after seeing Thursday, I figured there was a decent chance that DeBonis' and Nader's commentary was enough of a buy signal to get us to $3.5. Besides, all I was doing was repurchasing shares I sold a bit above that on Thursday, and then some more besides. For me, this was a neutral positioning, accepting the $3.5 level as possibly the base level at this point. Between now and September, we could easily go under $3 as the summer doldrums combined with no announced progress anywhere, triggers a lot of giving up. But, I think that's probably going to be more of a market-timing thing vs where we settle in late 3Q, as the company shifts out of cash-flow loss to cash flow neutral and some continued mobile progression... ....even though the volume of the progression indicates that OEMs have no interest in using the chips for volume phones. --- My general thesis is that either something is going to hit with TrueCut or someone is going to realize that DeBonis is slowly suffocating the company with a vision of a super-smart and talented COO-manager, misplaced as the CEO, who thinks his careeer has hit a wall and he likes his life just as it is and the people he sees every day are on the same self-interested cold-war with investors. To be repetitive with my prior comments -- but I'm just giving the thesis of why I'm staying in a dead-end stock at $3.5 or whatever -- CHMN Sanquini seems unable to lead or deal with the situation...so that adds to some of the bleak. ....However, the jig has got to be up at some point, right? Operationally, the company is doing quite well. Excellent engineers. Excellent customers, coordinating at high-levels of collabroation. It's all pretty cool. The only thing that's wrong is that DeBonis can't see out of a narrow strategy box or have the personal domain expertise to figure out TrueCut, and there's no one in the PXLW universe who has the self-interest or influence to point to this out, and the company is so small that hedge funds won't be bothered. |
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Msg # | Subject | Author | Recs | Date Posted |
2034 | Re: market re-rated the stock .. but I bit...here's why | entrepreneur | 1 | 5/11/2021 3:37:34 AM |