Don't think a buyout with Apple is happening, this company is positioning itself to be taken out by a company operating in the industrial sector, high tech industrials.
Interesting, Echelon will still be supporting grid industry standards groups. There is a lot to this transaction that has yet to be disclosed.
Looks like nothing has changed except getting the expenses of the grid business off Echelon's financial statements. Employees are still housed at the same facility and they still have the office in Fargo. Can't wait for the next conference call.
They can carryback any current NOL this year and offset that against income for the two previous years and then they can carryforward the losses for twenty years.
Welcome to the smart grid sector where promises and dreams are only that but contracts and revenues are always off in the distance.
Hopefully, if/when Echelon releases a PR on this development it will state what products they are providing.
Probably something overseas. Maybe the sale of the grid business is closing or maybe, maybe, the Poland deal is coming to together. Or China, or N Africa, or Brazil....could be a lot of things but something positive is happening. We'll find out tomorrow.
If you look at the report coming out of the UK this week shedding doubt on whether or not smart meters are valuable on a cost benefit analysis, Echelon management probably made the right move by shedding the smart grid business.
There is a report that came out of the UK this week putting in doubt a 52 million rollout of smart meters which is a huge but continuous blow to this industry. SSNI is a leader in the space but the only thing that is certain is this sector continues to be uncertain and difficult to model revenues with any consistency. The report coming out of the UK sheds doubt into whether or not there is a cost benefit analysis to installing smart meters in homes.
Duke has installed some Itron's meters in Cincinnati but they have yet to go live.
The real turning point was 2007/08 when they lost the Iberdrola deal, the financial crisis hit, and Bea Yormark died. I wish I knew the inside story and the number of missteps they've made over the past ten years with positioning products, pricing, whether or not they should have went to court with Enel, etc. Actually think Sege hasn't done that bad given the weakness in the sector and the constant delays in awarding tenders; but trying to sell an end to end advanced metering system probably was too much too soon. When I spoke to a field rep with Duke a few weeks ago in Cincinnati he said the meters were great but due to the threat of cybersecurity issues the company was still not ready to totally network everything. The fact that Oshman Trust, Enel, Markula, and other large insiders are still holding sizeable stakes in the stock makes me sleep a little better at night, just a little bit.; so they just need to figure out how to scale their R&D into a growing revenue and profit stream.
This is a smart move and a big win-win!! They are still supplying chips and other related products and shed a lot of overhead at the same time. You're right though, there was an advanced move on the stock which isn't surprising since an overseas company is involved and Sege said last week at an investment conference they were in talks with a single company.
Sentiment: Strong Buy
1. Echelon will be a supplier of chips in their smart meters and related products
2. Echelon can receive rental income and/or performance-based consideration of up to 1 million (need some clarification from management on the specifics)
3. Echelon reduces headcount by another 60 employees thus reducing more O/E
4. Echelon is now a pure-play IIOT company with a huge upside and a long reliable history of reliable technology and products.
What's your best guess on the Poland meter project? Delayed and potentially staying with Echelon or going to a different vendor?
They are buying RF, that's what they need and the rest can be improved within Echelon's control system for lighting which will now offer PLC and Wireless. Who else has that capability in the marketplace?