Several people on this board complain about a lack of New Carrier and New Product Announcements as discussed by the MIFI management team.
Looking at the press releases since Q1 earnings in early May, I read the following:
* Bell to Launch New Global 4G LTE MiFi by Novatel Wireless in Canada
* Next Seguros Puts Spanish Consumers in Control of Auto Insurance Costs With Novatel Wireless MiFi Drive
* FW Introduces Crossroads(TM), an Internet of Things Application Framework
* AT&T Certifies MiFi(R) Secure SA 1100 IoT Solution for Home Security
Guidance for Q2 was for $62M to $70M predicated on some of these new launches to perform near $70M. (Not to mention the full quarter of revenue recognition from Feeney)
Does the above list get MIFI to $70M? Does it get MIFI above the $64.78M analysts estimate? (Shamefully only 3 Analyst's who have a mean target of $6 by the way, but I expect more to follow MIFI now that they are part of the Russell)
If you think yes, you buy all you can afford of MIFI at this level.
If you think no, you must be short MIFI and you might have made a nice profit in the last 2 months.
In the end, people should stop complaining about lack of announcements. The 4 listed above are a step in the right direction and a catalyst for future revenue & EPS growth. This $150M market cap is well below the 1.5X revenue that MIFI deserves and I fully expect more announcements like the ones above to continue.
Sentiment: Strong Buy
This reminds me.....I haven't heard anything about the Patent suit against ZTE in a while (Markham Hearing).
Anyone know where this stands as MIFI could definitely benefit from a cash settlement right now?
Maybe I'm using too much logic hear, but MIFI closed at $4.05 on June 11th prior to the Preliminary List of additions posted on the Russell Index on the 12th. This news as you say prompts your Russell Index Funds the need to buy shares. If Market Makers needed to start "getting busy buying MIFI shares", then how does MIFI continue to drop another 18% in the process. And how do all these transactions get processed in the last 15 minutes of open market trading and after hours in the range of $3.32 & $3.33.
The only thing I can come up with is that MM's started shorting MIFI to create additional sell orders of stop limits and weak handed share holders. But in doing so, the MM's would have had to buy the shares needed in addition to cover their short sales, which still perplexes me on how we could be sitting here at $3.33 (the lowest close since Jan. 2nd. of $3.27)
With a large number of Funds having to include MIFI as part of the Russell, I would think demand would cause MIFI to move higher, not to recent lows.
Well, I guess the index funds are ecstatic with the MM's, as they were able to get them invested at the low for 2015. I guess I'll need to go back to school to understand how a stock goes down with increased ownership demand.
Another 2.1M shares traded after hours between $3.32 & $3.33 on MIFI which hardly ever trades in the after hours.
This is the part of investing that I don't like.....
1,000 share trades here and there tend to move MIFI a nickel or dime at a time up and down. But, suddenly 2,000,000 shares traded at the end of today and there's virtually no move????????
I know the answer will be that a side deal was put together with one party owning millions of shares selling to another party at a negotiated price point, but that kind of under the table (Or outside the open market deal) seems fishy. If someone wanted to buy 2M shares and bought them on the open market, MIFI would have shot up higher. But, equally the reverse could have happened if the seller was the motivator. This turns it into a non-event which I don't know if that's good or bad at this point, but it smells funny.
The 3379 June $4 Put Option trade on Monday that expires on Friday should be raising some eyebrows about now. IMO, MIFI is too easily manipulated and the Put Option trade this week is one example.
With Novatel incorporating a 25% premium to the Convertible Notes, it sure seems like an easier ask when the shares are at $4.00 vs. $6.50. ($5.00 vs. $8+) I wonder who holds the note of this "Private Offering" as this is a High Reward/Low Risk deal for whoever holds the note.
This looks great except for the fact that MIFI is trading well below 1X revenue today.
Doesn't make sense, but that's how MIFI is currently being valued.
I've said it before and I will say it again. MIFI can be easily manipulated by money managers and the news this week (Cancelled Cowen & Slim Departure) was an opportunity to instill panic for those that wanting to secure their profits in the 1st half of the year.
I agree, for the most part, that nothing has changed and MIFI is now trading significantly below 1X projected revenue. Two things will drive MIFI higher or lower and that's Revenue & Earnings. I haven't seen any change in the projections so I view this as a buying opportunity to increase my position.
The only change is an increase of Outstanding Shares due to the Feeney Acquisition with currently 50M shares set to increase to 59M based on the Q1 report. But, even at 59M shares outstanding and a projected revenue run rate of $400M, @ 1.5X revenue (which is an industry benchmark) MIFI should trade above 10.
The last response I received from Novatel IR on this was on Dec. 11th which read:
"We were very pleased with the outcome of the Markman hearing and felt the claims interpretation rulings all benefited our position.
That being said, the litigation is a lengthy process and we remain optimistic about the outcome."
I haven't heard anything about this MIFI Patent hearing lately. This would be a great cash infusion for Alex and Co. if something was settled in the near future. Maybe it's time for another email to Novatel's Investor Relations on this subject as about 6 months ago.
Stocks like SWIR, MIFI, CAMP and others with low volume and small floats are easy to manipulate by Funds and Institutions. Add to the fact the these same Funds and Institutions have visibility into all Stop and Limit orders on the books and clearly the deck is stacked in there favor.
My guess is that there were several Stop/Limit orders after yesterdays close in preparation for earnings. The Limit orders were probably in about $2 above and the Stop orders $1 below the $36.81 close. Both of these actions trigger selling and a Fund can take advantage of this knowledge.
If you believe in these stocks in the long term, then I'd recommend you turn off your computer for a few months to save yourself the heartache. This is the unfortunate truth with low volume/small float stocks and why traders love to recommend that individual investors use Stops and Limits, because it makes their jobs that much easier.
OUCH!!! Down $2.50+
MIFI paid $25M and an earn out of $25M totaling potential of $50M for $38M in 2015 expected revenue
SWIR paid $9.5M and an earn out of $1.5M totaling potential $11M for $10M in 2015 expected revenue.
Which do you think is the better deal?
Good to see the latest 2015 & 2016 revenue estimates increase, but I guess there is still some convincing that Alex needs to do with his $400M run rate by Q4 statements. The 2016 estimate was just increased to $313M.
If you believe Alex, it's time to load up.
I just wish I sold some of my position in the high $6's to take advantage of this recent drop. Oh well, my average share price is in the Mid $2's so I'm playing with house money.
Guys, I'm not interested in name calling or bashing here as I'm interested in investing and making money.
With that being said, Sierra isn't 100% wrong, but he/she isn't 100% right either and that's what I'm trying to boil this down to.
Yes, MIFI has less than $10M in cash and yes, the share count is going to approx 59M, but both of these things happened because of the acquisition of Feeney. Feeney is projected to bring approx $10M in M2M revenue to MIFI starting in Q2. So Sierra can't make a reference to the post acquisition cash and share count and then go on to say that the M2M business is stagnate. Yes, without Feeney, the M2M business has been stagnate, but without Feeney, MIFI had close to $20M in cash and 46M shares.
As for future dilution, I didn't get the detail on expected warrants, but acquisitions will bring more revenue and greater margins with synergies and scale. As I said before, I'd like to see any additional acquisition in the 2nd half of the year especially if I take Alex for his word on the expected product, carrier, and partner announcements in the next few weeks. These announcements would constitute organic growth vs. acquisition growth and could increase the share price to make any acquisition less diluted.
Again, I'm interested in the facts as we understand them today.