I agree on the short term outlook as I think our best hope is the integrated drivers (TDDI's) and AMEOLD drivers.
Keep in mind that the inflection points on LCOS and WLO's is from a very low level. Some analyst needs to ask at the CC about:
+ The technicians hired this summer....how many and what are they doing
+ What is the current state of activity and output from the existing LCOS fab plant
+ What is happening with this output? Are they being delivered and billed or being put into inventory for later orders (and then when is later).
Looks like nearly 201,000 shorts covered during the last half of Sept 2015. While that is just under 10% of the total short volume, it is a signficant amount of share which traded during the 11 trading days during that period. In fact, it might be over 15% of the trading volume during that time.
It is a bit concerning that this net covering did not result in the share price increasing and that KOPN closed today at $3.10. Still this is not a larger decline and probably all just trading range.
Date Short Vol
9/30/2015 2,158,813 $3.14
9/15/2015 2,359,400 $3.19
8/31/2015 2,560,947 $3.10
8/14/2015 1,992,213 $2.66
I also wonder about the causes of the declining revenue figures/estimates.
+ 3Q 2015 revenue is estimated at $7.66 million vs. $9.63 million in the year ago quarter
+ 4Q 2015 revenue is estimated at $8.36 million vs. $8.76 millioin in 4Q 2014 quarter (high estimate is $9 million which is higher than the year ago quarters).
+ So, are they selling fewer units from a year ago or is this based upon lower unit sales prices and steady to slightly higher unit sales?
From their 2Q 2015 CC: "“In the second quarter, we announced that Fujitsu had launched their enterprise headset based on our wearable technologies and components. When you add Fujitsu to our existing customers, combined with the expected launch of a wearable product by another Tier 1 company in 2015, Kopin is providing system designs and components to the companies creating the most innovative products in the global headset market,” said Dr. John C.C. Fan, CEO and President of Kopin. “In September 2015 we plan to debut our latest consumer headset system targeted at the health and fitness market at the interbike trade show in Las Vegas.”
+ So again, are they losing customers or unit sales as these new customers and orders are not fully replacing the sales from prior year's quarters.
+ Or, are the analysts just not that well informed on KOPN????
Again, I am not trying to bash KOPN. I just wonder if this is a buy at the current price, whether I can get in later at a lower price (or a higher price with better certainty and outlook)?
Thanks for the link and I had just found/read this from my SA feed.
As for FOV:
+ From the article: "Unless the demonstration is a total fake (which is not inconceivable) then this means that the camera system demonstrates that the field of view limitation in the current HoloLens system can be overcome. There might be limitations in packaging such as system, but these limitations can probably be overcome in future iterations of HoloLens"
+ The article also shows two photos from the video I was watching. And, if they can show a wider FOV in the video, why can't that same wider FOV be rendered to the wearer of the Hololens?
+ Do not want to discount FOV but many uses do not need this (focused work on assembly, MInecraft building/playing, blueprint reading, studying, medical, scanning uses, warehouse order fulfillment, sign intrepretation, etc.).. Again, I don't want to discount the FOV and its use in gaming but I do see that as more in the realm of VR. Note that the article does state that the Hololens doesn't block your FOV.....only that the 'holograms' only appear at your direct FOV (as compared to peripheral FOV).
+ Again, my investment in HIMX is not just LCOS related........but Wu seems pretty positive on their LCOS/WLO collaboration with multiple Tier 1 companies and an inflaction point in their manufacture in 2015.........so hopefully we get more details on these at the upcoming 3Q CC.
+ See my Topic on this MB titled Inflection Point from Wednesday Night (10/7/2015).
Again, good discussion and thanks for your insight. See see my note on the KOPN MB as I know you are an investor in that.
First, I agree that CEO John Fan's purchase of KOPN shares is a nice (and perhaps best) show of confidence and has me interested here as I also think KOPN is in a great market sector with huge growth potential.
So, as I do not currently have shares, I have to decide when to buy, what price to buy and even how to buy (buy shares, buy call option or sell put optoins; all bullish plays).
My current thought is to wait for KOPN to report 3Q 2015 due to:
+ Marco-economic factors: Market may correct as last jobs report was poorer and prior month jobs were reduced with other signs of the economy slowing. Early reports were not good (Alcoa and Gap), etc.
+ 3Q (Analysts espect $7.66 million revenue & loss of $0.11 EPS) will not compare well to 2Q ($10.9 million & $0.01 EPS) due to the one time revenue sources of $3.8 million from contract renegotiation (lower quantities) and the $5.5 million investment gain (Recon). 3Q 2014 was a loss of $0.08 so a loss of $0.11 will be 37.5% greater than the prior year's quarter.
+ 3Q loss of $0.11 seems realistic but this is still larger than most prior quarters which were close to losses of $0.08 (3Q 2014), $0.08 (4Q 2014), $0.06 (1Q 2015) and then the gain of $0.01 in 2Q 2015 No doubt, this is due to lower revenue and the company perhaps preparing for the future with R&D, etc. but the trend will not be KOPN's friend
+ How does the release of their cycling smartglasses impact costs? Also, does this mean that KOPN is moving from coponent supplier to manufacturing final products? And, is this wise to compete with the same companies they want to supply?
+ But, any mention of new customers and products will be huge........but if none are mentioned after being discussed in the past few CC's, does that hurt KOPN.
In summary, I think KOPN could be a good investment and I like the CEO buying. But, should someone buy now or wait until after the 3Q 2015 Conference Call before buying (or buying more)?
I appreciate any insights.
Thanks for the reply. I do benefit from your knowledge & don't want to be adversarial. Disclaimer: I do not have a larger position here (most was sold Puts which expired worthless in June). My invdestment here is more than just LCOS (integrated TDDI's, AMEOLD drivers, COMS/WLO's, etc.).
Okay, to address your points but I don't claim to have all the answers.
+ FOV may be mostly 'solved' but certainly is a consideration.. I had the FOV in mind while watching the videos from the recent MSFT conference and I was looking for that in the videos and they seems to have a wider FOV. If it is an issue, I would say HIMX has their best people on it.......but it could be as simple as using two displays or splitting a display into two to double the FOV via 'stitching' which is a common technology). I hope this gets asked at the next CC so we have better insight.
+ On tethering, I thought we were comparing Oculus Rift and Hololens. But, for both gaming and other uses, tethering is a restriction on use but I can also see how it would also reduce costs as you don't need to pay for another CPU/GPU/HPU in the headset if you already have a PC.
+ The Gear does have this untethered advantage over the Rift but both of these are VR's and I am more interested in AR as I think the ultimate market could be higher (and some VR's use smartphones as display via Google 'cardboard' as phones have CPU/GPU).
+ I am more interested in the Enterprise market which is less price constrained as long as there is an overall economic benefit. I think Enterprise will prefer AR over VR and certainly untethered.
+ I also think AR will be a larger market but I do see compelling uses for both. I think AR has some means to morph to VR but not vice versa.
Bottom line is that I would prefer to know where things are going and who is going to win in the AR and VR spaces. Who do you see as the winners here? I'll post something on the KOPN board to keep that open to al
Thanks for the reply. You have good information/insight although you seem to have a bias which keeps you from seeing everything you should.
Hololens is not $3,000. That is for the development kit which generally also includes software and especially technical support. It is no indication of the sales price. Most of what I read is estimating the cost around $499. Regardless, at least be honest here and compare sales prices for each on an honest basis.
You also gloss over two huge items between the Oculus Rift and Hololens. I don't see them as being that similar or even directly competitive in use although there is some 'at the edges'.
1) Tethering is huge in terms of mobility (which then impacts use cases) and then system cost. You were correct to include the cost of a PC which is needed for Oculus Rift........as Hololens is standalone and includes the CPU/GPU/HPU. But, I do not have an estimated cost of Hololens other than estimates I have read.
2) AR (Hololens) vs. VR (Oculus Rift). While these two may cross over for Minecraft, these two will be used very differently in most other uses.
Finally, a few other comments:
+ MSFT is GENERALLY after software sales as they generally have higher margins. But, MSFT has branched into hardware lately with their Surface Pro tablet PC's and did mvoe a bit into smartphones. We can argue their success and motives but MSFT has definitely moved a bit into hardware. Hololens could help them sell software.......by keeping many in the MSFT ecosystem.
+ I do agree that VR is for gamers......and then even sharing realities which will be huge as it will change how we interact with entertainment (concerts, sports, movies, etc. from the viewpoint of various participants)
+ We need more converstaion on products for the enterprise where I think AR is preferred via the various industrial studies by Accenture and others.
Again, interested in your unbiased thoughts..
Thanks Jar and others,
That was my thought also but I didn't have the facts about BoA and Heyler as the extended review was about a whole basket of stocks which were covered by Heyler (and perhaps others). So, this is really just about a reorganization of some sort (Heyler leaving, being reassigned, etc. such that the list of stocks given will now be followed by another analyst).
Good find. Seems that Microsoft is willing to let Minecraft be used with other sorts of 'glasses' be they Augmented Reality or Virtual Reality. I wonder which sort (AR vs. VR) are best for Minecraft?
Do you know if Oculus has come out with a 'stand alone' verson of Rift or do you still need to be 'tethered' to a PC?
Do you have the costs for the retail versions of Oculus Rift and Hololens as I didn't know Microsoft had set a price yet?
I think your high IQ prevented you from understanding the concepts being presented here.
1) We do not know if HIMX will bill for the LCOS in the month of manufacture/delivery. There is a possibility they do........but even an April release will mean the parts start getting delivered at least 60 days ahead of time for product (Hololens in this case) assembly.
2) We do not know if the billing terms are net 30, 45 or 60 days although it would be booked as accounts receivable as soon as the LCOS displays are shipped (again started at least 60 days ahead of release date).
3) HIMX share price will react on projections which are given at the prior quarter's Conference Call.........and not so much with the actual reporting. This is why stocks react to actual reports as they are compared to projections which are many times guided by the company's management (plus, refer to the adage "buy the rumor and sell the news").
4) The bogey here is how much HIMX will say due to Non-Disclosure Agreements as they may guide revenued but not state that it is LCOS related.......or perhaps say their projections include LCOS but not break it out specifically (basically what they did by using "inflction point" but not giving a number).
Again, when Wu spoke of the 'inflection point', I took it as a reference to manufacturing activity......which may or may not result in near immediate revenue/earnings (or do they go into inventory for later delivery?). Again, I am fine with some delay on shipping as I trust the Wu's to have a high degree of confidence of manufacturing now for future sales.
I wrote previously on this MB about the use of inflection point in the 2Q 2015 Investor's presentation which included:
+ Slide 16 on LCOS, last line: "Expected to hit inflection point in 2015"
+ Slide 18 on CMOS/Imgine Sensors, last two lines: "Anticipate inflection point in 2015 to gear up for mass pilot production shipments for HMD light guide"
As for getting a Hololens and SDK, these are generally not restrictive and offered to nearly anyone who reigsters and wants one as those requesting one have to pay (I think it is $3,000) to cover the costs. Sometimes a requestor or requesting company needs to be certified but generally these are not restrictive. Including companies wanting more than one Hololens device, I bet the number of paying requess are less than 1,000 (and perhaps less than 500). But, as you are paying the cost and potentially performing a service for Microsoft (developing uses for Hololens), I don't see where they will be restrictive. One could go to the Microsoft site and start the sign up process to see how restrictive it is.
Now, Wu did discuss increases in AMEOLD drivers and TDDI, but he did not use 'inflection point' in the Investor's presentation.
As for Jeb, it is all about guidance which comes 3 months ahead of actual reports.........so any sales in 1Q 2015 would be guided in Feb and sales in 2Q 2015 will be guided in May........if not sooner as they can comment generally on future activity.........just like they did this past CC when they spoke of a "inflection point".
It has been a while since this plant expansion capacity was dicussed......and then it was in round numbers. I will need to go back to the various conference calls where this was discussed.......and I don't believe they gave any numbers in the 2Q 2015 CC and that is was an earlier CC (perhaps even a 2014 CC)..
From memory, I think they had once taked about perhaps 1 million per month........but it has been a while since this was discussed.......and even then, it was just round number conjecture on Wu's part as it would hvae to be based upon longer term customer needs. But, the current fab plant capacity constraints are why I think these are being manufactured now as they wouldn't be able to 'keep up' with demand on a real time basis (and again those 200 techs they hired have to be doing something).
I would think the more immediate questions would be:
+ How soon after manufacture would HIMX be able to claim revenue (i.e. would these sit in inventory waiting for the Hololens fab to begin). Note that Wu was talking about activity and not necessarily revenue when he mentioned inflection point. As such, I don't doubt they get paid for these.......but when??? They may not get the revenue until 1Q 2016 for the units they are fabbing today.........or perhaps MSFT is willing to pay monthly for those manufactured each month for them????
Then, the bigger question would be whether HIMX can contract out the fab of these without losing IP or quality......or if their plant expansion and fabricating these are an absolute necessisity as contracting out saves lots of capital and such.
Many are making fun of 'inflection point' in the 2Q 2015 Conference Call & Investor's presentation as it pertains to LCOS & WLO's. I hope the below helps clear up a few things & stimulate some debate.
First, the Wu's are very ethical & correct with their guidance & comments. So, I would not be discounting his use of this term or its meaning.
Second, as evidence of the inflection point coming as stated, keep in mind that HIMX added ~200 technicians this summer from job fairs. Why do you think these people were hired...and what do you suppose they are doing? I say they are connected to the LCOS/WLO 'inflection point' and are working the existing fab plant.
As further evidence, recall:
+ the plant can make ~200,000 to 300,00 of these per month (use 250,000 as average)
+ Hololens will use 2 LCOS displays per unit
+ Estimate that Microsoft may want ~1 million of these Hololen devices ready for sale when they are released
= This means 2 million LCOS displays....and thus 8 months of fabrication prior to the release
Now, keep in mind that Wu stated the inflection point lets guess at September as the starting month. So, that mean ~1 million of these displays will be ready by year end and it would take through April 2016 to have the full 2 million completed such that 1 million Hololens units can be made available for sale.
Note that this does not include LCOS for Google or other uses....which would be in addition to my math above. Note also that generally the hardware is mostly fixed before the SDK's are issued as there are hardware protocols (API's, etc.) which are critical to software development.
As for the release date, I have no idea...but they could be released before many new games are completed as there are ~50 million users of Minecraft and that game is ready for Hololens now.
glhsken & I have previously done estimates on EPS but for now just think 1 million at $150/device (total all components) & 35% net margin ($0.305 EPS for 172 million shares).
I generally agree but why the nearly 10 cent discount in share price........on such a large block of shares?
Further, why was such a large rebalancing needed today........as this is not typical. I do sometimes see larger blocks and realize it is generally rebalancing.......but it is usually at the market price and not at a discount. That is what stood out to me.......and made me think it might have been share accumulated during the day for a pre-arranged sale........but I am guessing here.
See these after hours trades; especially the 104,263 share trade and the 15,300 share trade.
I can't believe that someone with this many shares put in a 'market order' which was taken advantage of. I suspect these are the MM's 'balancing/squaring' books after a hard day of making a market in GNW..........or were accumulated for an arranged sale.
16:37 $ 5.50 High 854
16:10 $ 5.4066 Low 15,300
16:10 $ 5.50 135
16:03 $ 5.4066 104,263
Yes, there is a difference between Yahoo and Stockcharts in the way they calculate and display the 50 DMA and 200 DMA. I am not sure what it is............but it could be tied to the dividend and 'corrected' share price.
Eihter that or someone has a problem calculating moving averages........or someone is counting weekends????
Regardless, this is close and there is a difference between the charts these two sites show.
Genworth working with Goldman:
From Bloomberg on April 2, 2015:
Genworth Financial Inc., the insurer weighing a breakup after steep losses on policies covering long-term medical care, is seeking buyers for a life and annuity unit, according to people familiar with the matter.
The firm is working with Goldman Sachs Group Inc. on a sale of Genworth Life and Annuity Insurance Co., or GLAIC, said the people, who asked not to be identified because the matter isn’t public.
Genworth will consider selling GLAIC in parts if it can’t find a buyer for the entire unit, two of the people said.
In a sale, GLAIC would fetch a discount to its year-end capital and surplus of about $2.1 billion, one person said. Capital and surplus represents the difference between the value of an insurer’s assets and liabilities.
From The Street on May 12, 2015:
Monday's announcement is the first of several steps expected over the next 12 months, including the sale of the remaining 52% Australian stake, Devine stated in his report. Genworth is also shopping its U.S. life and annuity business and a "lifestyle protection" unit principally based in Europe.
Goldman Sachs is advising on the life and annuity unit sales, according to a banker not involved in the deal. Bloomberg reported on Goldman's involvement last month. A Goldman Sachs spokesman declined comment.
Keep in mind that just a short time ago GNW announced they were working with Goldman on various scenarios. I iminage that the last two moves (pulled one deal, then this latest deal) had to have been impacted by Goldman.
Sometimes one has to look beyond percentages as the difference between 75% and even 125% is not great when the EPS is at current levels versus what it is when 2016 EPS is $0.55 as expected by BoA/ML (and then ~$1.10 in 2017). So, HIMX could borrow from the future to keep from cutting the dividend by a bunch.
Note that there is also something like $12.3 million left over from a $25 million stock buyback passed several years ago and only around 50% implemented. With $172 million shares, that $12.3 million represents a bit over $0.07/share.
Having written this, I think the over riding consideration will be capital needs for the fab plant expansion and then whether HIMX wants to take on net debt to finance this.
But, HIMX has cut the dividend when the business declined in the 2010/11/12 timeframe and then raised it back up quickly with increased EPS.