Proto, while I agree that, even with the amount of dilution already done, it is still a great relief that things are finally looking good, and soon, but I would caution against wishing for the entire $24 million PP getting funded.
If they actually need the extra cash to fund a massive 800G rollout, then I say Go for It.
But that would be another $13.3 million, leading to an additional 133 Million shares being issued, plus another 133 million warrants. So, with the over-400million shares now already out, we would then have close to 700 million shares, fully-diluted.
Again, if we need the extra $13.3 million on top of the $10.7 million we just got, and if that would create a massive market for us, then I say, Yes, but to do it just for the heck of getting $13 million more dollars, now that would be crazy dilution.
Having said all that, even if they did the extra raise, and we did end up with around 700 million shares (sounds awfully crazy), we would still be ok. Here's why:
OK, so we now know there is Really, Actually something good going on here. They have actually, really funded, and insiders are again in for another $1.6 million. So, since there is something really good here, that means we are a Player in the ACC game, along with Macom and Semtech, with Credo competing with their AEC's as well.
With Macom and Semtech, it is hard to tell what portion of their Market Caps are attributed to their ACC plans, because they also sell so many other things, and although both of their recent conference calls focused so much on ACC's, we still don't know for sure how big they see their ACC markets.
With Credo, on the other hand, we do get a glimpse into what analysts (Including Craig-Hallum, our current PP handler) think their Active Cable market is worth. Craig-Hallum just upped their estimate on Credo to $30 a share, and when Credo was down in the doldrums last year, it all of a sudden shot up over 100% after it mentioned that AEC's would be around a full half of their revenues going forward.
Now, AEC's will, for sure, be used in the 800G market, but it is very, very clear that Linear ACC's will dominate.
Here' the important part:
If Credo is worth a full Additional $1.5 Billion just on their AEC potential, then Spectra7's, Macoms, and Semtech's market must be worth more than that, for their much-more in-demand Linear ACC's. Their collective ACC valuation would have to be at least double that of the AEC market, based on the many recent displays by Broadcom, Cisco, Nvidia, etc, regarding Linear ACC's. So at the very least these three players would share in a $3 Billion valuation added to their respective market caps.
And we're talking NOW. Credo got their Additional $1.5 Billion valuation NOW, so once Spectra7 is finally recognized as the Player it now is, it will share this $3 Billion-plus valuation with Macom and Semtech, although, based on the lack of partnerships announced by the other two, combined with the fact that Volex and ACES are already touting their North American Hyperscale deals using Spectra chips in the cables they make, I would say that Spectra seems to have the greater share of the big-player cable manufacturer partnerships.
So, now, based on all of this new info, including Credo's Additional $1.5 Billion valuation just for AEC cables, Spectra7 should be assigned at least an Additional $1 Billion valuation going forward. (yes, yes, I know, it hasn't happened yet, and it's been so long, and Yada Yada Yada. This new funding shows there is something Really Big brewing, ACTUALLY).
So, even with the crazy thought of around 700 Million shares outstanding, that would still be a Per-share price of $1.42 for Spectra7. Fourteen-times it's current price. Will that be enough for those who bought a few years ago and never added as the price dropped? Probably not. Will it be really good for those who buy now? Well, yeah, of course!
So there you have it, Spectra7, a real Player, with a Bunch of shares already out, with More shares possibly being issued, yet still a 14-bagger, which should be NOW, if you use Credo's valuation as any metric.
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