As I read the PR, this event is not an immediate big deal, which could account for the weak price action following the initial euphoria. The PR is worded very carefully -- even slickly -- but I think the bottom line reality is that Uni-Pixel has merely HIRED a company to run a production line for it, which is why the PR uses the ambiguous word "engaged." There appears to be no direct payment to UNXL. As I read the PR, the so-called "license fee" is being used by the so-called "EcoSystem Partner" to pay ITSELF to build a production line to make UniBoss. It's also questionable and somewhat self-serving for UNXL to call it an "EcoSystem Partner" when it could more accurately be called a hired fabricator. The good news is that, as Killion states, UNXL will not have to acquire debt or dilute the equity to achieve this doubling of capacity, but I don't see this as the blockbuster announcement for which we were hoping and waiting. One other troubling point is that, if the fabricator is Global Foundries, and although they are an outstanding company, I believe their experience has primarily, and perhaps exclusively, been in fabricating chips, not touch screens, so there would still remain the big open question as to whether UniBoss can be produced in quantity and without defects at high profit margins. Let me know if any of you read the PR in any other way..
I think your take is incorrect. The Eco-system partner is a manufacturer of touch screen devices (PCs, phones, tablets) not of touch screens. I think the reason that the euphoria has died down is that there isn't much new here, they just announced what they already said was going to happen.This is confirmation that they are on track.
I read it in a different way.
Keep in mind that the ecosystem partner is not producing at all, that is the job of the manufacturing partner, rumored to be Kodak by those more intelligent, not Global Foundries. Note that at one point Reed states: "enables us to build out capacity". Also, the word "engaged" is similar to how they described the relationship of the PC Manufacturer: "joined forces".
The Licensing fees will be paid based on UNXL meeting certain guidelines. These partnerships do not equate with purchasing orders, but those come later. The first one from the "PC Manufacturer" has already arrived, which is why they are shipping to them in April. It most likely arrived with the first $5M payment. The second $5M payment is scheduled to be paid upon receipt of the first shipment (as well as paying $20 per unit for the first shipment).
Again, the Ecosystem Partner is not in production, and UNXL has not hired them for any sort of fabrication. The partner's job is to help with marketing. These two sentences describe the ecosystem partner's role perfectly:
"UniPixel will work with its preferred price and capacity licensees to develop a global touch module supply chain for OEMs and ODMs, which includes die cutting, tab bonding, and lamination of the module to the display."
"This relationship allows UniPixel to leverage their well-established global infrastructure for joint sales and marketing, supply chain management, as well as their exceptional engineering and operational expertise."
Seriously, a hired fabricator? When they are committing production lines with their own capital to then BUY the product produced from UNXL, it is the best of both worlds for UNXL.
UNXL's risk is virtually minimal and they just ramped up their capacity to fullfill orders globally, not only from the ecosystem partner but OEMs. 2 million units a month when they are going to do 60K currently???
That sure is slick....brilliant slick.
The shareholders just got a life saving booster shot in the arm and I expect to see more analyst coverage as this news spreads.
I agree with you that this deal saves UNXL a lot of money while enhancing capacity, and that it will be good for the long term, but the problem is that most of the longs expected the EcoSystem partner to be more famous and to actually pay a muti-million dollar fee to UNXL for the privilege of making UniBoss. How else can you account for the poopy reaction to the PR?
Sentiment: Strong Buy