Savvy Trades and Investments

[larrybaz]

MOBX - They did buy a couple companies this year. The details were undisclosed for one, but they paid $2M in cash and $10M in stock for the other one.

Why anyone would want to buy EMKR is beyond me. Yes, it is selling below tangible book value, but their income statement looks like a scene from a slasher movie. At the pace they are going, that discount to tangible book will be disappearing quickly.

The MOBX income statement doesn't look any better. Plus they have negative tangible equity.

In regard to the dirty, rotten, stinking, festering liquidity issue, I came upon this:

https://investors.mobixlabs.com/news-releases/news-release-details/mobix-labs-secures-100-million-committed-equity-facility

In the most recent 10-Q, though, this statement seems to signify that the equity facility is on ice for a year after the referenced private placement:

Committed Equity Facility

On March 18, 2024, the Company entered into a Purchase Agreement (“Purchase Agreement”) and a related Registration Rights Agreement with B. Riley Principal Capital II (“B. Riley”) which provides the Company the right, in its sole discretion, and subject to the satisfaction of the conditions set forth therein, to sell to B. Riley up to 9,500,000 newly issued shares of its Class A Common Stock (subject to certain limitations) from time to time. Any sales of Class A Common Stock pursuant to the Purchase Agreement, and the timing of any sales, are solely at the Company’s option, and the Company is under no obligation to sell any securities to B. Riley. The per share purchase price that B. Riley will pay for shares of Class A Common Stock will be determined by reference to the volume weighted average price of the Class A Common Stock measured over the regular trading session or intraday period of the trading session on Nasdaq on the date of each purchase, in each case as defined in the Purchase Agreement, less a three percent discount. However, in July 2024 the Company entered into an unrelated private placement transaction, the terms of which prohibit the Company from selling shares of its Class A Common Stock in variable rate transactions, which includes sales pursuant to the Purchase Agreement, until the one year anniversary of the date the registration statement relating to the private placement is effective. See Note 21 – Subsequent Events.

This is a really strange deal here. It smells to me, but who knows.