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Sequans Communications S.A. Message Board

  • motownvg motownvg Nov 1, 2012 9:47 PM Flag

    Paper Losses

    All, since SQNS is at an all time low, all of us longs are down on paper. However, one comforting fact is that Mr.Karam is down more than all of us. At the IPO, his 3.1 mils shares were worth $27.9 mils. At SQNS peak ($19.50), his stake was worth $60.4 mils. Currently, his 3.1 mils shares are only worth $4.3 mils (@$1.38/share). My only point is that this is not a stock to trade, but it must be viewed as an investment where the CEO has more to lose than any of us investors. The big difference between SQNS now and SQNS at IPO is 1) Wimax revenues fell off quicker and steeper than planned and 2) LTE revenues are ramping up a little slower than planned. This "revenue hole" has destroyed the share price, but since there is more than $1 cash per share in this company, you are basically buying the business for free. There is still no near term risk of bankruptcy in all 2013 and early 2014 and all you have to do is wait for the many LTE design wins to kick in. Being long SQNS is a poor stock trade currently, but a wonderful investment opportunity.Again, I know we are all down by definition, but also I know if we are all patient, we will be rewarded by mid-2013. I will just keep adding and wait for SQNS day in the sun. I think Mr. Karam is calm about his paper loss and is not worried about the share price, becasue he knows the details of all the design wins, futures volumes, etc. and is almost certain his $27.9 mils will return. It would be nice if they could say more in detail, but since they had their first investor law suit in 2011, I understand their caution especially since you cannot be sure of exactly when things will ramp up in India and China by quarter. I also wish I would have waited a bit longer to enter, but am OK with my current average share price and know I will make a nice return within one year. Cheers and good luck to all longs. (PS I do congratulate those short on a great trade seriously, however, if I were short I would cover while it's still just barely trading above cash value).

    Sentiment: Strong Buy

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    • The issue here is that you are not getting the company for free. They burn cash so every quarter it is being depleted. The market is telling you that there are no significant sources of revenuegoing forward.

      • 1 Reply to arc871
      • That I disagree with the market has no clue about anything these days. Look at all the big shots on wall street that were pushing apples price targets of 800 and they are seeing apple fall apart here. These were the same guys that were saying weeks ago that iphone 5 sales were going to be huge and they came in under what most expected. The same goes for ipad's. Look at all the big guys that thought PCLN would see #$%$ earnings and guidance and they got burned today. The list goes on and on these days. The market is just a guessing game right now nobody has any clue what to expect from day to day. I would say they have huge revenue sources going forward. LTE is not slowing down its blowing up. Just look at NTDOCOMO's LTE growth month over month the last 6 months. Its been growing by leaps and bounds. What do you think is going to happen when the two largest mobile eco systems start to hit their stride with LTE. Hell China mobile alone has 700 million subscribers. This is not even accounting for the other carriers in china. Then look at India they have close to 900 million wireless subscribers right now. If we even land 2-3 million units over the next year to 18 months in china and then another 2-3 million in india over the same time frame our revenue will explode. People have left this company for dead and its not even close to dead. They are seeing customers take longer to launch their LTE services but next year should be a big year for us.

        Sentiment: Buy

2.315-0.025(-1.07%)3:30 PMEDT