WALTER, MARCO, NEWCOMERS & 50 REASONS WHY THE STOCK IS SO WEAK.
Marco, first thanks for mostly sticking with the issues pertaining to the company in your response. You obviously took a great deal of time to address the issues, perhaps even than I did - which was about 1 hour for the initial 40 and 2 more to add on 10 more and edit for better grammar and composition
Walter, I understand your sentiments about trust but am limited with what I can say in response. I'll just say that at the time my posting was restricted it came as a shock and it did take me a couple of weeks to adjust to it. It's the new reality. Folks - only post about the company and not people and their motivations. While it may be fun to throw zingers, those kinds of posts are not helpful and really should be irrelevant anyway.
Speaking of reality - that's always been my goal here - figure out the reality of this company. That's what the list of 50 is about and that's what Marco responded to.
Marco, despite the time you took I'm not going to address all of your points because we both know it's an exercise in futility, but I will do 2 things.
First, I'll respond to one of your replies about the PDK. I said it's taken 3 years, you say 2. My main point was not about how long it would take but was about the disconnect between the expectation of shareholders and the reality on the ground. Dr Lebby never set a good expectation so quite a few shareholders thought after it was first mentioned at ASM 2021 that within 6 months (by EPIC, was the mantra) the PDK would be finished and deals would roll out - ie by calendar year end 2021 - that hope was what contributed to a massive price increase.
The reality was we finally saw on a presentation in Dec '22 with the words 'operational' and the Dec '22 shareholder letter said front-end PDKs were working, but we were still left guessing about the back end. KCC now seems to think the "back-end" is done at the foundry, and so the idea that the PDK was final by the end of Dec '22 when declared 'operational', seems even more suspect than before. And the PDK for a 200mm wafer clearly wasn't done since only recently we learned that 200mm wafers finally have come back from foundries! And, as I pointed out in the list of 50 - the 10k STILL says PDKs are being developed - STILL no confirmation of a final PDK that is qualified at even one foundry. You accuse me of twisting words and reading the most extreme interpretations into things. Does this really sounds like twisting and extreme interpretation? I don't think so. I stand by the 3 years, and counting viewpoint. While the Dec '22 letter at least split it into a "front" and "back" end for the first time, we were still left guessing about the process itself as well as where they stood on it (ie poling as part of the PDK or not?). Marco, Do you REALLY think the continued lack of clarity from Dr Lebby about the PDK process is not intentional obfuscation after all this time has passed? This leads right into the second point.
But first, a major point to be made to set everyone here - including you - straight about Dr Lebby's history of giving timelines. It all starts with his now famous (or infamous) 2021 ASM presentation that succeeding in launching the stock into the Nasdaq in only a few months time:
You keep repeating the new mantra that Dr Lebby ALWAYS had 2024 as the timeline for commercialization to begin with 2025 as the ramp-up year. You wrote:
Remember Dr. Lebby said in 2021, first slow rollout expected in 2024 and ramp begins in 2025. The company has not failed and fallen behind since 2021, they are on track.
Here's a slide from the ASM 2021 which makes it appear that commercialization was then IMMINENT: AND if that wasn't bad enough, the very next slide had no dates and shows green arrows(ie the ones he said they were then in) for "Piloting" and the next phase being manufacturing. The messaging back in 2021 was NOT that of a long process toward commercialization starting in 2024. Those ASM slides don't even mention 2024. Or 2023. Or 2022. The messaging was that they had already been working with foundries to get into their PDKs which are a stamp for high volume production that then leads immediately to partnerships, and to expect commercialization very soon. IF you don't believe this - watch the ASM 2021 from 6 min to 20 min. He showed NO YEARS other than the above slide and repeatedly talked about "partnering for mass commercialization" as though it all was IMMINENT. Don't believe me? Here's the LINK: https://www.youtube.com/watch?v=rcY5vhsWHKo
SO I call this new mantra about Dr Lebby having a 2024-2025 timeline all along and communicating that clearly to investors as a BIG LOAD OF FECAL MATTER COMING OUT OF A BULL'S SPHINCTER. I ask you Marco, are you honest enough to concede this TRUTH?
Second, Marco you seem to have above - perhaps even a high - intelligence, as do a few others here. Part of the fascination here for me has been the fact that even the intelligent posters seem unable to recognize the most obvious signs of obfuscation by the company. KCC recently said he really doesn't trust Mr. Marcelli yet in the same sentence he quotes something super positive from Marcelli re the transceiver company that Lightwave is working with! KCC, despite some things he says that I chalk up to his youth, is intelligent. And damn persistent - which I admire. But, the example w Marcelli shows that even intelligent people allow emotion to cloud judgement in the most obvious ways imaginable - yet seem to be oblivious to that. The desire trumps one's own better judgement. THAT'S something I find so fascinating here, as it happens time and again here.
SO - my response to all the rest of what you wrote is to HIGHLIGHT IN RED within the 50 points - repeated below - the examples I see of obvious points that the intelligent posters here really should have no issue with because it is so freakin obvious that even the average person on the street can see it. Anyone who doesn't see it may want to ask themselves if they can't see it for the same reason I gave in the example about KCC and Marcelli above.
REPEAT FOR NEWCOMERS - WITH RED HIGHLIGHTS OF THE MOST OBVIOUS POINTS that nobody with intelligence should have any disagreement with imo:
50 REASONS THIS IS NEAR NEW LOWS. There is no need to appeal to conspiracy theories to explain the stock weakness. I hope this is helpful for those who really want to understand what is happening.
For anyone who believes we all have the right to express our views on the company - and yes to even expect real accountability from the company, or if you are just sick and tired of being bombarded by constant cheerleading and misleading fantasy, I invite you to repost this regularly to help support the call for accountability and educate unsuspecting newcomers.
Yes, this company is working hard to do something very very difficult. But, have they been honest? Are they being honest now? Or are shareholders being played as fools? Judge for yourself:
*THE BIG PICTURE REALITY: While dilution hasn't been very bad at all over the years, the fact is that money to run the company is raised by selling shares to Lincoln Park - who then sells it to the market. LPC has to sell at a PROFIT or the funding will stop. That only works if shareholders have very high expectations- year after year after year - irrespective of the real situation on the ground. The company has great incentive to continue to paint a picture that is a bright as possible, even if it is unrealistic. This point just cannot be stressed enough and I think is greatly underappreciated here. ONCE AGAIN: THEIR SURVIVAL DEPENDS ON KEEPING SHAREHOLDERS EXCITED WHETHER THEY SHOULD BE OR NOT. This has always been the case, and continues to be the case as the following items make abundantly clear to those who are willing to see it. "Open eyes", indeed.
*The Dec 4 '23 annual shareholder letter announces that deals are on the near term horizon - maybe even by year end. Shareholders get very excited and are unanimous in that this must happen as it is so definitively stated. A respected shareholder here writes "You can't say what he said and not deliver within 2 months". Nothing happened: Dec, Jan, Feb, Mar and now 10 days of April have come and gone.
*After much angst the explanation came on Mar 2, 2024: Reliability and Scalability aren't acceptable enough to customers. These are the 2 main issues skeptics have repeatedly said appear unresolved and impediments to commercialization - maybe EVER. Dr Lebby said:
In our conversations with potential customers, the biggest points are not performance related. ..They are asking to see more reliability data and the ability to produce at scale, as well as to ensure that we can sustain a long-term partnership. ..To that end, we continue to provide more reliability data.. We are actively working with foundries that supply 200mm silicon wafers so that we can showcase the ability to scale in volume.
*Problem #1: It makes no sense that reliability and scalability didn't come up in the very first discussions as blockages to deals with transceiver companies. What does make sense is the company said what they had to on Dec 4 to halt or reverse the freefall the stock was in at the time, even if it temporarily hurt their credibility. It worked, and some shareholders have already "fallen back in love" with Dr Lebby using whatever rationalizations they prefer.
*Problem #2: Despite the enormity of what is at stake the Company continues to avoid telling investors where reliability and scalability really stand. What exactly are the issues? The company never says all problems are completely solved, but often uses forward - looking statements to lead the naive to believe that is the case: "we CAN showcase" instead of "we HAVE showcased", for example. What will it take for reliability and scalability to no longer be an impediment to a commercial deal?
*Investor expectations are ALWAYS way too high: Transceiver demo expected at OFC 2023. Then OFC 2024. Reliability 'proven' at OFC 2023 because Dr Lebby said "we got this"!. Then "all doubts will be removed" at ECOC Oct, 2023. Then a "complete data set" by year end 2023. Scalability "not an issue" back in fall of 2022. Read the first data point again. BOTH are still up in the air.
*Company still has no transceiver demo despite leading investors to believe the tech is ready and they have been working with a Tier1 transceiver company. This is all that matters. No transceiver, no ubiquity. A respected poster recently said the transceiver company is highly supportive according to the COO, despite any evidence to support this.
*The demo they have and showed at OFC isn't what the market wants. It isn't a transceiver and apparently the tech doesn't yet have the endorsement of a transceiver company. The stock shows no strength whatsoever after OFC.
*Company admits in Mar 1 Benzinga interview they need to 're-set' expectations for shareholders, when expectations the company set for deals in Dec-Jan-Feb haven't gone through.
*A month later, in another interview, the Company resets expectations saying over the next 6 months they will by showing their demo to interested parties. Why say 6 months if deals can happen at any time? The explicit mentioning of 6 months is a "tell" to not expect a deal by ASM. IMO this 're-set' is so shareholders give them some more breathing room going into the ASM in May. Nobody wants to face an angry crowed.
*Showing a demo that isn't a transceiver demo for the next 6 months isn't what any end user wants. Therefore they are likely demoing their 'open eyes' to convince some other transceiver company to work with them. The fact that they still don't have even ONE transceiver company creating an actual transceiver demo is concerning. If they can't get the one they presumably have been working with for at least a year and a half to commit to making a demo (which presumably is EASY!), it makes one wonder how successful they will be in getting any others to commit.
*Company announces they will show shareholders the demo a ASM in May. Dangle the carrot - wow them to keep them hoping.
*The company announces at OFC impressive sounding results obtained. However, their claims to 200gpbs 4 lane are clouded in more vague language 'fits very well', test results 'based on designs..that leverage' modulators. Maybe it's legit but could easily have been stated in a way that is far more direct. They could have said the tests were directly on the modulators that were created in the foundries. It is very easy for laymen shareholders to word things in a way that they like, but the company seems to always fall short of that.. The PR language reminds one of prior language re reliability and scalability. What will be the next shoe to drop?
*Spanning years, investors find out about major hurdles after the fact - "kitchen recipe" for why PDK's didn't happen, "ADP deposition", "reliability and stability" are STILL issues/challenges. Company never wants to say directly what is going on.
*One month after company says they are "implementing" with foundries for 4 channel, they changed their wording to "planning to implement". It's a no brainer as to why: it was a correction for the annual shareholder letter, which is more scrutinized than the prior PR would be. The claim that "both are the same" is certainly hard to swallow, but some have --hook, line, and sinker.
*At ECOC 2023 the curtain was pulled back on the true industry engagement level when the company reported 'interest' by a wide range of companies in 'learning more', and that ECOC represented a change within the industry from 'debates' about various technologies to an attitude of 'we need to start doing something'. That totally BLEW A HOLE in the oft-repeated mantra that the "BIG BOYS TIER1'S" - the Amazons, Googles, Nvidias, etc.. were clamoring several years ago to get Lightwave to be used by major foundries.
*There are many many innovative competitors addressing roadblocks to bandwidth and power issues faced by data centers. Many are well known and publicize their partnerships openly.
*Hypercenters are biased toward keeping and improving the status quo. The claim that they are 'forced' to consider alternatives is -to date - playing out very slowly, and nobody is endorsing Lightwave's polymers to date. The leading material for photonic integration is thin film niobate. Many of the largest companies have weighed in on their opinions about TFNL, yet we have seen NO opinions on Lightwave's polymers from these companies.
* stock went bananas in 2021 after Dr Lebby said they will be going into foundries and mentioned PDKs..many expected PDKs to be done in 6 months or so and major deals to follow. Dr Lebby never explained that a PDK can take 3 years or more.
*The expense increase since working with foundries has been fairly small. Some have speculated that the Tier1s have funded the work. Besides sounding ridiculous at this point, it arguably would be a material event or required to be mentioned in the 10k.
*After OFC Investors are back to connecting breadcrumbs (ie Synopsis posted a Dr Lebby article!) to keep hope going. Never mind that Synosis regularly post photonics related articles and nobody even commented on Dr Lebbys' article (of yet another supposedly major breakthrough).
*Company makes off the cuff remark at OFC about high volume poling on 200mm wafers 'all at once'. Provides no context, and no info about consistency of yields - a 'critical' issue per respected (by some) poster. More obfuscation about where it really stands.
*Company has never directly announced a single major company partner. The degree of work with or interest from companies that appear to be linked to Lightwave by some indirect association is unknown.
*NO analyst coverage. No encouragment to allow serous probing at ASMs. For an analyst, this speaks volumes.
*No known large institutional investors of actively managed funds.
*The main salesperson is part time and has 2 other positions.
*The largest fund ownership - Vanguard and Blackrock - have less than something like .005% in Lightwave, and are passive index funds, which mean they have no interest in making money off of the stock return - ie no interest in what the company does - their only objective is the match the index composition.
*COO and President (Marcelli) has made many predictions over the years that have been way off. Many longs don't believe his word is trustworthy.
*COO and Presidend claims Vanguard and Blackrock regularly check up on what the company is doing, which makes no sense at all. Perhaps they send a form or letter pushing their social agenda but it is not related to the company's business model.
*COO and President claims (second hand) Tier1 company has high hopes for Lightwave's modulators, yet they have never been named or confirmed, and again - bottom line - they have yet to announce a partnership or demo with a transceiver company.
*Investors expected PDKs by end of 2021, then end of 2022. 10k still says they are in development
*No known large investments from tech companies or individual investors
*Very weak stock price since last summer after expectations were not met on the commercial deal announced or for other deals to be announced in direct contrast to all of the indexes over the last year - Russell Growth, Russell 2000, AI indexes, Semi-conductor indexes, Nasdaq
*The stock, even after the weakness still trades with one of the highest premiums of all other stocks that are pre-revenue (for all practical purposes), with a $500 million market cap.
*Stock has one of the highest short percentages of all stocks, even at $4 a share. They are in the top 3% last time checked.
*No insider investment of personal funds with one bizarre exception: After taking a $2.6m cash bonus 2 year ago, the CEO bought 1,000 shares of stock. He later said he thought it "was the right thing to do". The COO and President also got a $2.6m cash bonus, which it is rumored he used to buy a beach house in Florida.
*self-DD found analyst who said his/her "best contact in the world" said polymers will never happen and that within the optical community Lightwave's name almost never comes up - despite Dr Lebby's prominent standing at some of the conferences.
*Company touts "world record achievements" that occur on plasmonic devices - and NOT on devices the company expects to become 'ubiquitous' - so it's apples and oranges - even the respected poster says plasmonics has quite a ways to go.
*In their annual shareholder letter in Dec '22, the Company misleadingly announced they had expanded into a much larger space, and hired people to do the work in that space. They didn't announce that a tenant was still in the space and their lease wasn't up until August. That was only later revealed in the 10k. They also announced they were "on-track" to meet their stated goals for the year. Very doubtful that they really thought that, and in that same later they stretched out some of those timeliness to be for "2023" instead of the previously expectation for 1H23.
*Mid-way In the year 2022 in which investors expected their first deal announcement all of the directors sold option shares, several banking millions since the price had gone up so much in anticipation of "any day" major deal announcements. They apparently knew what wasn't being shared with investors about where things really stood.
*Investors were convinced 2 years ago that the ONLY reason the COO and Dr Lebby would each take a $2.6m bonus was because they would be announcing a major deal at the 2022 ASM since the company was so small and nothing definitive had yet been accomplished despite going to Nasdaq on the hopes.
*Investors have almost no idea what the status is of any of their 3 products: materials for plasmonics and other devices, Polymer Plus, Polymer Slot. Company often doesn't clarify which one they are talking about.
*Company is very evasive about the foundry work. They previously said they would name a Foundry partner by ASM 2023 (one of the goals). Didn't happen. In 2022 ASM a slide showed they were working with 5 foundries and had plans to add 2 more, and broke down by type and country. By end of Dec 22 a slide showed no such breakdown - just N. America and Europe. By ASM 2023 when asked CEO said he wouldn't say how many, but that some are more prioritized than others and relationships had tightened. Some of us can figure that out.
*Company, with great pressure to avoid a stock collapse due to expectations for a technology license transfer agreement at the ASM last May announces a surprise and very questionable 'first commercial agreement' that very same morning! Very few details given and nearly a year later the revenues are minimal.
*Multiple signs point to the commercial agreement being with Polariton - which would be no more impressive than a typical university research agreement. Perhaps the company knew that would not impress...so even to this date they have not revealed the partner. HOWEVER, Polaritan announced about the same time last May commercial products that included Lightwave's materials. 2+2...
*Company REFUSED to review annual goals at last ASM. Used the 'commercial agreement' as the excuse.
*Status of foundry work was covered up at last ASM -- now we know why. A full 9 months later the company announced receipt of 200mm wafer from a foundry for the first time. Shareholders had thought that was achieved over a year prior.
*CEO enjoys perks of travel, fine hotels, speaking engagements. He's a good speaker with an authoritative British accept. Jose Pozo seems to love him. He also enjoys writing articles to drum up interest. But, he doesn't (reportedly) live in the same city or state where the employees work. Perhaps he isn't as in touch as shareholders would like to believe: He was directly quoted a year ago as praising the approval of a patent that later turned out to just be a patent application. hmmm...
*Historically the company - with the same COO and President throughout - reported expectations to be a commercial entity during the year, for 10 years in a row. This changed when Dr Lebby came on board, but the practice of raising great hopes that are missed and revised later appears to have remained consistent. The COO and President is a common denominator.
*No transceiver demo - no transceiver product - no transceiver sales. No clear prospects. No clarity on hurdles. No stock strength at all. No fun.
NOTE: These are FACTS. They are NOT silly personal comments about people or serious ones like when a respected poster made light of my father's ill condition. This is all about the company not doing what they say they will do or what investors are led to think they have done already.
I think too many people have gotten a distorted view here - and continue to get a very distorted view. This is to help those trying to decide with their decision.
