It really gets tiring to look at the share price, which remains lower than in 2021, when we have seen the company making technological progress. To understand why there is no significant buoyancy to the stock price it is important to take a careful look at realities. This is not a pleasant exercise but a necessary one to gain a realistic picture of what holds the share price back.
1) Uncertainties are a major and probably the most important factor. The company is operating in stealth mode with NDAs in place. We don't know how many partners are actively involved and how far along they might be. We know that PDKs are functional with at least some likely small foundries but we don't have confirmation that it is completed for a large foundry. Until that happens there is uncertainty about being able to mass produce wafers at the kind of scale large foundries expect. Dr. Lebby has stated the technology will work with large foundries but they typically will wait to see it done in smaller foundries first. The overall market sees financial uncertainties with no guiddance on revenues as yet. There are timeline uncertainties as to when products will be out. If you trust Dr. Lebby you know they will be starting production with partners in 2024 accelerating in 2025. Reliability testing by everyone involved, LWLG, foundries and customers must still be accomplished and not yet finalized but evrything looks good to us so far.. As shareholders we follow the company close, follow what Dr. Lebby can disclose and integrate that knowledge into what we think the company is worth. We see the very significant technological progress with all of the uncertainties of manufacture seem to be solved with advantages like successful poling without applying voltage, ALD and aluminum electrodes replacing gold. The average person and most stock pickers don't know what this means or its importance. The overall market has little awareness of the company as OEPs are not in the market yet. Out of sight out of mind. This is the burden a small emerging company faces before it truly gets discovered by the wider market.
2)Shareholder exhaustion is a factor. People in the stock a long time see that more time is needed. Some people are aging out or financially need to cash in and slowly some do sell. I am comforted in the loyal shareholder base and have never seen one so strong. Shareholder exhaustioon comes through on the board as people need to sound off. Negativity does rub off on some especially the less informed.
3)Overall market is another major factor. It was great in 2021 largely because tech was king and small companies in tech got overinflated, even the ones not making money yet. Institutional ownership was increasing but overall market sentiment was more important. In a hot market momentum traders come in and will inflate stock prices with their buys. Along comes 2022 and interest rates are raised faster than anytime in the last 50 years. We hear the narrative of the inverted yield curve and the coming recession over and over. This rings the bell for the short sellers to take down any company with no or little revenue or significant debt. They know they can short safely with such a negative market. Many of them believe the false narratives that are spread and feel even more certain in their short positioins. Many use algorithms that identify companies solely on financials and they short vigorously. We have been affected and continue to be. I have a few companies like LWLG and it is the same story.
4)We know we are a news driven stock with not enough news out yet to move the price up signifcantly. There is patent news but that will not drive the price up alone. Our first commercial deal is great but limited with not enough detail at least for now. I believe that there is very much going on and this will change in next few months especially with ECOC in October but outside of us shareholders that is likely not the case.
5)Traders and short sellers and negative posters on this and other boards have spread FUD at will especially due to #1 above. They have gotten away with it up until now and hopefully their time is limited in continuing to get away with it. I am expecting news coming in a matter of months that will lead to the a possible squeeze that has been talked about especially if the news comes out in rapid sucession due to companies being close to the needed upgrade in transceivers that is desperately needed and Lightwave's partners readiness to participate and as Proto says "the gloves come off".
6) AI has lifted shares of companies directly involved in AI. We know Lightwaves polymers will do a great deal to move AI along faster but the connection is not clear enough as yet for the overall market. We didn't get as much of a bump as we might have deserved.
7) It takes a tech company 2-3 years to get products ready for the next upgrade cycle customers want. We expect to be involved with the 800G and 1.6 T transceiver market in the future but the dots connecting to us is still uncertain. There are those darn NDAs of course.
8) We don't have any analyst coverage yet. Coverage is looked upon favorably by the market and neagtively if it is not there. It will be there when more news on partners and finances come out.
All of these factors are acting in concert to limit the price of the stock. It takes discipline to stay the course and a great deal of patience. We review progress on a real time basis on this board and it is necessary to share information and to stay informed. Rate hikes will stop soon, news will be out soon. I also expect likely news on netwotk switches as they typically get upgraded along with transceivers. With the advantages LWLG transceivers have, switches will be sorely needed to avoid a new bottleneck. There are too many market catalysts beyond datacom to hold the stock down much longer.
