Why do you defend Mgmt.......after they said they didn't need any financing ~6 weeks ago at the Conference Call??? This is a huge blow to Mgmt credibility and the smaller 1 million offering will have people wondering when the next offering will come.........as we know VUZI doesn't have much money, are not profitable and filed a much larger shelf (which many here said would never be used).
VUZI should have done a larger share offering worth perhaps a year's worth of cash burn and shown a cash flow statement showing how that had a sufficient margin of safety so another would not be needed for a year or more.
And, all those who defend Mgmt for their obfuscation should be ready for more as it is only when Mgmt is held to account that they are more likely to be honest. The analysts need to really press Mgmt at the next Conference Call as shareholders are invested as much in Mgmt as they are the business.
I am just glad that I sold $5 Puts so there is still a good chance they expire worthless and I get to keep the option premium. But, I will have to hear what Mgmt says before I put any money into stocks as this very small offering will make many think there is little room for error and the likelihood of another secondary offering is higher than lower.
Finally, pricing this at $5.75 for a smaller offering while the shares were solidly over $7 is quite a discount for a smaller offering. Maybe Mgmt wants the share price to recover again so they can price the next at $6 and then the next at $6.25.......
The news leak is another troubling problem and should be investigated. While it might not have come directly from VUZI, it did come from those they chose to conduct this secondary offering business with.
Good summary surrealskiller,
Of the money infusion into VUZI. I also wondered why this secondary was so small........as it costs money to launch a new product line (or lines is you include iWear). I suspect the smaller number is because VUZI wants this to be only a smaller lie than a larger one.........as they told us not long ago that they did not need any money.
It is amazing that many posters here do not understand how important it is for Mgmt to be honest and to be able to properly forecast cash flow.......things VUZI will now have over their heads for some time. Posters here continuously wrote that filing the shelf offering was just a normal thing and VUZI would never do a secondary. Then, at the last Conference Call less than 2 months ago, Mgmt said they did not need any more money. Then, yesterday, VUZI takes a huge hit to share price so it is logical to think news leaked out (maybe not by VUZI......but by people VUZI contracted with).
So, VUZI Mgmt has some problems with credibility. The posters here may excuse that.......but big money at Wall Street generally doesn't like Mgmt who can't be trusted.
Now, I have my stake in VUZI........but they are in the form of Oct 2016 $5 Puts which I sold for just under $1 (breakeven price is something like $4.15) so I was right to take a lower risk investment here rather than buy shares.
I hope this all gets discussed at the next conference call.........along with why $5.75 when VUZI was in the higher $7's and this is only a smaller offering? I also don't see VUZI becoming profitable for a few quarters so the share price could now have a cap on it as shareholders wait for the next share offering.
Hey yupeng chiang,
Generally I think you have good insight into HIMX........but you are wrong on your statement about HIMX "every time they announced divs.....then the price drop for no reason".
Last year (2015) certainly doesn't fit your statement as I had sold June $7 and $8 Puts in Jan 2015 hoping to get shares just before the dividend.......and the share price rose from just over $6 just before the dividend was announced (11-May 2015) to over $8 at the record date ~6 weeks later.
The Dividend History page below is from the NASDAQ site and you can see the historical share price from 11-May 2015 on at Yahoo.
Ex/Eff Date Cash Amount Declaration Date Record Date Payment Date
6/24/2015 $0.30. 5/11/2015 6/26/2015 7/8/2015
Now, the price has fallen in the past around dividend announcement date........but the lesson here is not to use always or never but quality them with almost always. As a note, I think summer 2014 had issues of Google not buying the additional stake in Himax displays and 2013 had issues of Innolux selling their shares in HIMX so those were outside events and perhaps not associated with the dividend announcement.
I am not a day trader but today is easy to see as no seller wanting the best price for his shares would throw large blocks of shares at the bid to take it lower. But, the big short has to file quarterly statements and thus they have incentive to 'paint the tape' on HIMX.
I suspect many will see this as a buyng opportunity........and analysts can now come out and re-affirm their share price targets of $10 to $13 and show gains of 25% to 50%....while helping their customers who purchased on their recommendation.
So, while I am not predicting tomorrow, I do suspect HIMX will bounce back as buying comes in between now and the Conference Call around August 10 to 15.
The easy/best solution to keep your shares from being borrowed to short is to set a sell limit order........say at $30 so it ties up your shares.
From an article on the Internet:
"There are two things you can do, the first is to certificate them but this is not obviously to everyone’s advantage but the alternative solution is simple. All you do is to phone your broker and put an order in saying that you wish to place your shares for sale at, for arguments sake, double today’s price. As they are 'on order' they cannot be lent out by your broker and in turn you are reducing the amount of 'free shares' out there that can be used for shorting purposes. And don't forget to move your limit order up when the price starts to recover, then, that way your shares can't be shorted - not much but helps :D.
Although an individual personal investor will not normally have enough shares to halt a concerted shorting attack, if a large number of holders did this it would reduce the overall amount of shares that they could get their hands on.
In my opinion well worth doing if not only for the knowledge that your own shares cannot and will not be used in a short attack against the very share that you own."
On the last day of the 2nd Quarter.
I don't hold much HIMX but I may do some buying today as this is very obvious.......that the big short is taking this down to make their end of quarter report look good.
I have no timetable for HIMX to move toward/above $12. It will be based upon news, activities and accomplishments and not time.
I have to somewhat agree on the iWear. I see these are really just an effort to turn inventory into cash........which is a good thing and what they should be doing. But, if VUZI was really serious about iWear, they would be looking to increase the pixel density and go wireless.........which was discussed without any commitment at the recent CC.
But, as a VUZI investor (sold Puts), I wish VUZI luck in converting their iWear inventory into sales and hopefully profits (or at least something better than an inventory write-off). But, after this effort, I would prefer they focus on the M300's and future generations of Smartglasses.
Stop losses could not get hit and the lower price stick if there was buying interest. I suggest you look at a 1 year chart and you might see why some wanted to see VUZI sold off.
And, I am not being negative here........just looking at real data and considering various factors.
As for a secondary offering, a loan would be better for current shareholders and I would prefer VUZI to borrow money rather than sell more shares; especially if selling more shares were going to negatively affect share price. Selling shares at this price and after saying they did not need capital would really hurt Mgmt credibility.
Gosh, I just don't get why frankenberry and others here are so defensive.......rather than discuss and flesh things out.
I am not trying to bash VUZI as I have a stake here. But, VUZI is a big gamble from many aspects......so learning more is key to making more profits or minimizing losses. I think VUZI has some positives which is why I am invested here.......and trying to learn more than what is said in PR's and CC's.
So, quit trying to read evil into every post.....and my question is more around timing...........not if they are meeting what they say. Specifically, why is there this seemingly 5 week period between the first 50 devices and the next 200.........and then what does this means for future production runs/timing?
I agree about the 2015 dividend being a large factor in May/June of 2015 as the shorts did not want to pay a 4.5% dividend and covered before the earlier than usual divided date. As such, I only wanted to point this out when comparing the chart today with that point in time as the dividend yield is much lower this year, being paid nearly a month later with the much lower yield directly related to the reduced DRIP buying which will also be nearly a month later.
As a note, I had sold June 2015 $7 and $8 Puts in Jan 2015 thinking that I might make some money and get shares Put to me just ahead of the dividend being paid (when I was expecting something like $0.30 and my net price was going to be around $6 based upon the Put option price). Well, I ended up not getting any shares.......although I did well as I got to keep the Put option selling premium.
I also don't doubt that Wu is frustrated by delays and NDA's and the games played with HIMX share prices. But, there really is not much he can do other than put out news when and where he can.
The next few quarters will have easy year over year comparisons and HIMX is doing well in the non-LCOS/CMOS arrays.
No problem and I know what you mean about message board discussions and being attacked for just wanting an honest discussion/debate.
MXL has a great future and much of that is due to their management.........who made a great purchase with Entropic and hopefully the asset purchases from Microsemi and Broadcom work out as well or better. And, from what they discussed at the May Conference Call, I suspect these will work out very well.
Feeling superior (again) today frankenberry?
I have acknowledged that I am bullish on VUZI (sold Puts and posted that here as a lower risk way to invest here)........and have acknowledged that I don't know the answers. I am just trying to start a discussion on manufacturing and run rates.........which is why I asked questions and not made declarative statements.
So, what do you think the run rate will be and what will be the ramp up. Make them simple for people like me.
As usual, you missed the point of my post. 60,000 units is not my estimate. It is only 200 units per day times 300 manufacturing days per year......and I was questioning why it was going to take another 5 weeks to turn out 200 more units when that should be a day's worth of work (or perhaps much less than a day's work).
My comment was that VUZI/Jabil should have the manufacturing process mostly optimized......which even your post or Traver's comments confirm.
So, why the 5 weeks for another 200 units? How hand/manual labor intensive are these units?
Just what is the initial target daily rate supposed to be?
Finally, who said I was complaining? I am simply trying to understand what the future holds here and I want to better understand VUZI and their plans/processes. Why aren't you trying to do the same.......rather than seemingly disrupting and not futhering the discussion?
Thanks for your insight.........but MSFT is not the sort of company who buys hardware manufacturers and especially would not buy a chip company. Now, MSFT collaborating with HIMX for specialized chips (LCOS displays, sensor arrays, graphics processing chips, timing controllers, etc.) is something else and I don't doubt that this is what occurred as the display is a very large part of perfecting Augmented and Mixed Reality devices like Hololens.
But, MSFT would certainly not buy HIMX just for access to LCOS and other chips when HIMX is willing to sell these to MSFT.......and also sells so many other chips and to so many other companies.
In fairness, what you write is fully consistent with MSFT working with HIMX on Hololens development........and you never said MSFT was interested in buying HIMX. I just wanted to post this for the others who might misinterpret your post as a buying interest.
In all seriousness as a VUZI bull:
Iif there are 50 M300 units ready now, why will it take 5 weeks for the next 200 units? 200 sounds like it would be a one day run through the manufacturing process.
So, what do you think the day run rate is.......and just how automated is this entire process? Is there still a lot of hand work which needs to be done on each unit? But, even at 1 hour of hands on per unit, 25 people should be able to do 200 units per day.
What am I missing here that once the manufacturing process is set up and operating, shouldn't VUZI's contractor (Jabil?) be able to turn out 200 per day? It would be a big mistake to leave customers waiting longer than needed........and giving whomever is or will be their competition time to compete.
Note that 200 units per day is still only a 60,000 unit per year rate given holidays and tooling changes. What should we think VUZI and Jabil are targeting at some point once the manufacturing process is optimized?
My only thought is that the manufacturing process might still be very hands on dependent while VUZI and Jabil are still working to automate the process??????
Hey jarhead, glhsken, normagain, fsumatty, etc.
I would not expect much from HIMX until the shorts cover........which I think is going on now and why HIMX share price has been down as the shorts try to delay any strong retail buying making them think they can get lower prices if they wait.
There has been some interesting after hours trades and volume again making me think the shorts are covering now. We should see the first half of July short volume in a few days and I am expecting that to drop a bit from the very high 14 million share level.
Having written that, I do wonder where the analyst comments are from the many conferences HIMX attended in the past month. Perhaps professional curtesy giving the shorts time to cover before saying anything.
From a fundamental standpoint, HIMX has some very easy comparisons coming up the next few quarters. But, the $0.13/share dividend, which should have been expected by those who did their research (including the large shorts), will not scare the shorts as the $0.30 dividend in 2015 did (especially relative to the share price). Remember, it is not just the share yield.......but also the after dividend share repurchases which will be down this year.
From a technical standpoint, the 50 DMA is decreasing although the 200 DMA is still rising nicely. The comparison of the weekly chart to mid-2015 may not be valid as 2015 had an early announcement of a very strong dividend yield (nearly 4.5% based upon early May 2015 share price) and we saw strong short covering and buying ahead of the dividend.......and then stronger post dividend share re-investment.
I say, follow the shorts......and our first data point will be next week with the early June 2015 data.
See below the historical short volume and share price on MXL which shows that the shorts have been losers.......and that they have started covering as of mid-May 2016.
Note that the NASDAQ site where I used to get this historical bi-monthly data no longer carries NYSE stocks.
Date. Short Volume Share Price
5/31/2016 3,395,900. $20.72
5/13/2016 3,463,100 $18.41
4/29/2016 3,400,000 $16.75
3/15/2016 3,882,676 $17.14
2/29/2016 3,516,897 $16.09
2/12/2016 3,470,056 $13.86
1/29/2016 3,160,904 $15.38
1/15/2016 2,908,287 $14.39
12/31/2015 2,448,201 $14.73
Short players started covering their short position in the last half of May 2016 as shown below. I think what we are seeing now is the shorts moving the share price down as they continue to try and close their short positions. The declining share price of the past two weeks is keeping the buyers on the sidelines as they see the price get cheaper every day so there is no reason to buy today.........as they keep seeing the share price get cheaper.
That also explains the the very low daily share volume..
MXL needs a catalyst for the buyers to finally step in and buy. There are several coming up which should worry the shorts and eventually move share prices higher and thus bringing in the buyers who are currently watching and waiting to buy.
A few of these catalysts could be:
+ MXL pre-announcing their 2Q revenue and margins in the first half of July as they have been doing the past few quarters (great for shareholders although I think Mgmt would prefer to stop doing this)
+ MXL filing their SEC Form 8 for the close of their $80 million asset purchase from Broadcom which we should see in the first half of July.
+ MXL could come out and provide guidance for the new asset purchases as a separate PR prior to the Conference Call in early August 2016
+ MXL reporting official 2Q 2016 revenue and EPS on the first half of August 2016 where they will discuss the asset purchases and update their revenue guidance (which will include these new assets) for 3Q 2016. 2Q 2016 revenue was guided by Mgmt at $102 million which will compare to $70.8 million from 2Q 2015 and thus a 40+% increase. EPS was guided at $0.42/share which will be a double over the $0.21 from 2Q 2015. This will give MXL a trailing EPS of ~$1.60. Slap a conservative 15 P/E on this and you get a $24 share price. Make it a 20 P/E due to solid growth and you get a $32 share price.
Yeah, the shorts have a lot to worry about and buyers know most of this...but are waiting to get the best Buy-in price.
June 20th SEC Filing was the close of asset purchases from Microsemi which had been previously announced. I am expecting another one for the asset purchases from Broadcom which MXL wants to close prior to the end of June 2016 if possible (so expect an SEC notice by 7/15/2016).
If you look at the Analyst Estimates, there is no revenue from these asset purchases currently in the 2017 estimates. MXL Mgmt discussed providing insight and estimates for these at their 2Q 2016 Conference Call........after the asset sales are finalized.
This is all good news as MXL works its way from sales of $200 million/year to over $1 billion/year over a perhaps a 5 year time frame......on organic and purchased assets. They are progressing well as they are now over a $400 million/year company just from the Entropic purchase. I expect the $21 million Microsemi asset purchase and $80 million Broadcom purchase to add $50+ million per year and MXL to end 2017 as a $500+ million/year company.