Hauppauge Digital Inc. (HAUP)

[Investing707]

Not sure why HAUP popped up on my radar, but I have been checking from time to time.

The company is dark and will remain dark as long as Jerry never sees the registered shareholder count go over 300. Also note here that even if there are 100 people at say Schwab, HAUP counts that as one person.

So we would need to get over 300 people with different brokerages all to buy 100 shares in Hauppauge. But let me tell you, I think if we did we would be shocked at what we found:

Good stuff:

1. A stable and profitable franchise in the HDPVR segment
2. YOY top line growth in HDPVR
3. An amazing pipeline of new products slated to take advantage of all the new rules at FCC

Bad Stuff:

1. SG& A expenses through the roof
2. Highly compensated executives
3. Debt structure nobody could ever begin to understand

All in all, I think even if someone went in there and grabbed 500,000 shares, all they would need to do is hold a board meeting and issue a new class of voting shares. This would box out anyone trying to grab a stake in this company.

Best case scenario is that HAUP wants to tap the financial markets again with a secondary ( for new opex funding on new FCC category) and in order to do so they start filing again. We would know this via a press release and I'm sure it would take more than a few hours for people to get what they are trying to do so there would be plenty of time to build a position at that moment. I do not see any advantage to building a meaningful position before that time.

Open to comments!