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I wouldn’t characterize it as failures, but obviously it would be better if things progressed at a faster pace, so point taken.
My point isn’t that Vuzix is doing good. It’s that no one else in this AR subsegment are doing any better. So it’s not that Vuzix products are inferior to Google and the others in this space, it’s that industry is slow to embrace this technology, in part because it takes investment in their own IT infrastructure to fully take advantage of enterprise AR.
There is no doubt in my mind that’s happening, the benefits are too great to ignore. It’s just that in Fortune 500 companies it can take a decade to implement new technology by the time they evaluate, create a business case, get approval, then get the budget and finally roll it out.
With the M series Vuzix is targeting industrial uses such as manufacturing, warehouses, field service and airport ramp operations etc. and the Blade is a consumer smart-glass device. No one is buying HoloLens for use in these areas.
The vast majority of the revenue you attribute to HoloLens is from the Defense contract that was recently awarded. That involves producing a special version of the HoloLens to be used for military training and combat. Those units have not been delivered yet, hence no revenue yet. So your claims about HoloLens is grossly exaggerated, and irrelevant since Vuzix don’t have any products designed for military combat..
That would be a valid point if HoloLens was a competitor to Vuzix, it’s not, it only requires a cursory look at their products to understand that. Not all products under the AR umbrella is aimed at the same market. I’m surprised you didn’t know that.
As you can see from press releases Vuzix unveiled the M400 today in Barcelona, So why you think it was a bad idea to go to a major AR event to show off your latest and greatest?
The point wasn’t to argue KOPN vs VUZI. Looking at the charts you can see that pending on what dates you want to use you can make the case for either one. In 2017 KOPN traded over $4 and in 2018 went down to about 89 cents.
The point is that right now none of the VUZI competitors are doing any better. So it’s a sector problem and not a problem specific to VUZI. And there is no reason to believe that when AR catches on that VUZI won’t be part of that. If you want to debate AR as an investment in general, have at it. But to ignore the sector as a whole and just focusing in on VUZI is intellectually dishonest.
It seems logical to me that the way to sales is to go out and promote your product. So I ask you again. Why do you have a problem with VUZI going to Barcelona and doing that? What would you like for them to do instead?
It doesn't matter what your investing strategy is, I'm pretty sure that I will be able to dig up numerous examples of someone losing money using that strategy. I'm sure that there were investors shorting Amazon, Apple, Google etc. that lost big time.
Yes, there are index funds that invests they way you're suggesting, but Black Rock is a hedge fund and is under no such obligations. While I agree with you that just because institutional investors invest in a stock it's by no means a guarantee, however, I think your explanation that they essentially threw a dart on the wall and it hit VUZI so they decided to go out and buy 6% is overly simplified.
The filing by Black Rock also leaves open the possibility that they bought the shares on someone else's behalf.
Finally, no doubt that VUZI's performance has been disappointing, but as far as I can tell that's pretty much the case for all the companies in this space. If you look at KOPN which is the manufacturer of the display components for the M300, Google Glass (EE) and Realwear, that stock has performed far worse than VUZI. So it really comes down to if you believe there is a future in AR or not.
Why are you critical of VUZI for going to Barcelona and promoting their products? What would you suggest they do instead?
So what's your take on the announcement that Black Rock acquired 5%+ of VUZI?
Looks like GE wasn't interested in owning part of SLM but wanted the whole thing. I think the same is true for Arcam, by virtue of being Arcam's largest customer as well as being the company that Arcam relies on more that anyone else to bring them to the next level, GE has plenty of control over Arcam already, in my view the only reason for them to invest in Arcam is to own them outright so they can put major resources/money into Arcam and speed up development, approval/certification etc.
Not that many players in the EBM space so it would be a lot harder to walk away from Arcam. We'll soon know, but I'm holding my shares.
True, I've tried (unsuccessfully) to convince others of that concept as well.
Thanks, I didn't realize that provision extended outside the tender offer.
I agree, if they see value they pay up rather than violate the rules and yes, GE owns 15.9% and not 40% as some are relentlessly insisting upon.
Do you know if GE knows at any given time how many shares are currently tendered or is that something no one knows until they've been counted after the offer expires?
What are you referring to, are you saying that if I sell my shares on the market and GE happens to buy them, they will have to reimburse me retroactively if they end up paying more than SEK 285?
Interesting idea and if so masterfully played by GE since Arcam is the crown jewel not SLM.
I agree that GE wants 100% and can afford to pay more if they see the value, so I'm holding my shares as well in anticipation that GE will pay more for Arcam.
I wouldn't rule out that Rene had a good idea that this day was coming and that's at least one reason why he moved to the US. If he can get taxed in the US on his gain vs. Sweden he will pay a lot less in taxes than he otherwise would.
It certainly seems that GE greased the skids before making the offer so the earnings report was not much of a surprise for me either.
There are a lot of players in the laser space so it's possible that GE have other companies in mind if they can't get SLM at the price they want. It would be interesting to know if anyone has a feel for what other laser company would be a good fit for GE since that could be a nice investment.
Given that laser is more common leads me to believe that laser patents have either expired or are easier to get around, so the question would be how much of a technological leap it would be to modify an Arcam printer to use laser instead or how hard it would be for GE to simply start making a laser printer themselves, especially if they already own Arcam and have the benefit of their expertise.
When it comes to EBM it's clearly a different story since Arcam is the only show in town using EBM to melt powder as far as I know and I assume that the patents are a lot harder to get around, and as a bonus they have powder production as well.
I don't think GE will walk away from Arcam anytime soon, and given the size of GE, if they see value they can pay a lot more without as much as a ripple in their balance sheet. So I agree with your assessment that there are negotiations taking place right now and the extension is about buying time to negotiate.
Do you know if GE gets daily updates on amount of shares tendered so they can assess their daily position or are they in the dark like the rest of us until after the deadline and everything is tallied up?
My position on the filing issue is that GE have to report as their ownership in Arcam changes in accordance with Swedish SEC rules. Your position was that GE could circumvent those rules because there was legal wiggle room or those rules might have been changed due to case law or that GE would simply violate the law by negotiate deals and not report them, not that you ever offered any evidence to support those wild theories, your only support for those arguments was simply that it was possible.
Now that you been proved wrong since GE did in fact report their true ownership in accordance with the rules which were not changed by some case law, you're trying to obfuscate by introducing tendered shares into the discussion. Tendered shares does not constitute ownership so the argument was never that GE had to report how many shares had been tendered, since that is nothing more than speculation about what GE might be able to own in the future.
The context of the discussion was trying to gauge the likelihood of a competing bid, so of interest was how many shares GE had locked up, any shares that had been tendered could be revoked before the deadline to be sold at a higher pps should a competing offer materialize, so therefore tendered shares was never an indication of GE's ability to fight off a competing bid.
For someone who frequently complains about being misquoted, you certainly have no problem doing the same thing yourself.
It's been said that "the more you know the more you realize how little you know". As for your numerous declarative statements in regards to GE, Elliott, Swedish SEC rules etc., I can only say that it appears that the opposite is true as well.
My point is that I don't think Elliott just bought 10% of Arcam above the tender offer price just "hoping" it's going to work out. If that was their entire strategy they would be out of money to invest long time ago. I think their strategy is a little more sophisticated than you give them credit for. I think they are convinced like many here, that GE wants to own Arcam outright and will not be happy with 51% and time is of the essence, there is value of being first to market and be able to set standards and file patents.
Hope is not a strategy and I think they have one.
When comparing the Axis/Canon with Arcam/GE one must wonder why Elliott would jump in and do the same thing over again if it didn't turn out so good for them with Axis/Canon. They're not stupid, so it would seem to me that they have a reason to believe that this will turn out differently.
Personally I don't GE would be satisfied with 50%. I think they want to put money into Arcam and speed up development and therefore want to own Arcam 100%. Just my opinion, I could be wrong.
Check out Analysguiden, they say that they didn't pay more than SEK 285 for any shares.
Let's join them
24.48% of the shares GE got from the tender offer, the other 15.94% they bought on the market. They haven't paid more than SEK 285 for any of the shares.
GE have 40.4% and extends the offer until November 1st.
That's not old news, it was reported by GE today. The announcement you referring to was that they agreed to the tender offer, not that they had sold any shares to GE at that point, something they could have revoked up until the deadline today. The 15.9% was announced by GE today and to my knowledge does not include any shares from the GE's tender offer.
This shows that GE only have 15.9% (they clearly will get more from people that have tendered their shares but we might not know until Monday what the total is) so clearly none of these backroom "informal agreements" that you insisted on existed. The reporting requirement had not been altered by case law as you speculated. Since GE didn't report the results of the tender no one knows what that is, and since tendered shares can be revoked up to the deadline speculating about the tendered shares is waste of time.
You insisted that there were backroom deals taking place and that GE had acquired more shares that they weren't telling anyone about, and this clearly shows that you were wrong.
According to Swedish reports GE reported today that it has 15.9% of Arcam.
So I guess they will now see how many additional shares they get through their SEK 285 tender offer and figure out how to proceed.
The second largest owner of Arcam, Första AP-fonden (8.7%) agreed to sell to GE.
I'm holding all my shares as well. The fact that GE wants to own this company and is planning on using EBM in a big way is a compelling argument for owning the stock. Given the future of this technology I don't think SEK 285 is GE's best and final offer.
It appears that Elliott owns 7.5% of Alcoa's common stock and that he nominated 3 board members to their board.
http://www.bloomberg.com/news/articles/2016-02-01/alcoa-in-pact-with-elliott-management-names-three-to-board
I would be fine with cooler's POV as well, however I don't see that happening. IMO 15% doesn't do much for GE, they have shown their interest in Arcam and as a result I think that put both Arcam and 3D printing on a lot of radar screens where they weren't before. So I don't think that GE wants to risk losing Arcam to a competing bid in the future. Given all the future plans that GE has for 3D printing I think they are going to have to start placing orders soon and that will the get the PPS going again. I also think that if any company was worried about GE locking them out of the EBM technology they would want to put orders in before GE gets around to taking a second shot at getting Arcam.
I'm planning on holding on to my shares because I think that with the current offer GE is getting Arcam right at the bottom of the hockey stick.
This is pure speculation on my part, but for my money I think that GE is going to want to acquire 100% of Arcam.
First of all, I think GE by virtue of being Arcam's biggest customer and being the company most likely to put Arcam on the map in a big way, already have plenty of control over Arcam without the need to invest in them. I think GE is buying Arcam because in addition to being an end user of their products they also realize that 3D printing will be the next industrial revolution and they want to get into that space in a big way as an OEM because if you're first to market with products/solutions that work, there is going to be a lot of money to be made. I think GE wants to be to 3D printing (at least metal 3D printing) what Microsoft is to computing.
Because of GEs know how as well as their enormous resources they can speed up product development and innovation significantly in the 3D printing space and put products out there long before anyone else, and as they do that, continuously filing patents making it harder for anyone else to compete in that space, but that only works if they own Arcam outright, otherwise any return on that investment will go to Arcam and not GE and that would be like giving money away.
Since GE is also buying SLM solutions who uses lasers in their machines, could it be that GE looking to build a hybrid 3D printer of sorts that uses both laser and EBM during a build and get the best of both worlds? I don't have the expertise to evaluate if this is something worth doing, but if it is, then GE needs to own both companies outright to be able to combine their technologies and patents.
If I'm right, then GE needs to get to 90% somehow in order to force the buyout. My question is: Can GE get to 90% outside of just raising the price? e.g. could GE put money into Arcam in return for Arcam issuing new stock that would then be given to GE in order to bring them to 90% while at the same time diluting everyone else? Is such a scheme even possible or legal?
Nice logic, you're not an expert on Swedish law so therefore we should proceed under the assumption that Swedish law doesn't matter, and if someone like Charlie actually post the pertinent Swedish law (or as you put it "reciting generic legal language") that shows that it does matter, then we should assume that some court made some obscure ruling that invalidates that law. Why? Why don't we operate under the more likely scenario that the Swedish law stands as written and GE reporting their 14% was to comply with that law and therefore they will also have to report when they pass 15% and every 5% increments after that in order to stay in compliance.
If you don't agree then why don't you do some research and find that court ruling to substantiate your claim?
If you assume that GE is following Swedish law then GE has less than 15% as of 3-days ago. Since tendered shares can be revoked up until the deadline no one (including GE), knows how many shares will be tendered until after the deadline. It would be logical to assume that if a competing bid comes in before the deadline people that have already tendered their shares will revoke them in order to get the higher price.
All your talk about informal agreements assumes that GE is breaking the law, just because it's possible doesn't make it probable. Besides, GE could never enforce an informal agreement that violated Swedish law, since the agreement would be illegal and in trying enforce it they would reveal that they conspired to break Swedish law.
As a practical matter, let's say ALCOA came in tomorrow and offered SEK400 per share. The share price would immediately go to SEK400 or higher, how would GE be able to buy shares from some informal agreement at a lower price (which I would assume be the reason to have the agreement in the first place) without raising suspicion? In addition, if GE has informal agreements in place, why break the law and keep them secret? It's in their interest to go public because that makes the agreement legal and discourages competing bids since the more shares GE have locked up, the harder it is for anyone else to pry ARCAM away from GE.
Both Investor and Latour are Swedish investment companies, which is what Jan Karlander was referring to at the end of his letter.
I doubt any company is going to make a bid without having analyzed the deal and figured out what it's worth to them and how much they're willing pay. In this particular case I don't that there is any benefit for them to put in a quick bid, nothing is going to happen for a couple of weeks anyway, so they have the time.
I agree. The foundation for any bid has to be how much value you would expect Arcam to bring to your bottom line and when, and when you got that figured out you most likely need to get the board together and get their approval. So unless you already conducted that study and had it in a drawer ready to go it will take some time crunching the numbers.
It could be that GE wants to accelerate the pace of development/innovation in order to meet their 3D printing timetable, and as such is willing to pump money and resources into Arcam to accomplish that. They obviously wouldn't want to do that unless they own Arcam, since that would be like giving money away. Even if that's not the case, the moment they start putting in large orders the share price will take off, so it's well worth it for them to reap the rewards of that by owning the company outright, as well as for being assured that they will have access and control over Arcam and the technology.