Quick read on today’s news
My key takeaways
1. OI completed deliverable, follow on discussions, products to be designed qualified and incorporated into customer’s product portfolio.
++++ The big win and de-risking of the company
+++ Further products for same client— my guess more advanced 400g and maybe 100g —Expect more NRE soon
? Were these “products to be designed qualified and incorporated” in some sort of pre design phase to expedite to market?
2. A new suitor for DL
++++ This could be huge and kudos to POET for saying, “Not so fast Chinese buyer, you slow played this and now it may bite you in the a§§”
Is the buyer interested in just DL? Why would they be?
A: Supply agreement They may want to jump ahead in queue,
Or, do they want everything, POET and DL, just Singapore DL, SingDL and POET?
There are many possibilities; since it is a 3 way negotiation, and percentages of ownership are changing with each payment, it’s a moving target. As of now Poet still owns 70%. That will reduce to 51% with the next payment, and to 19% after the following payment... I expect we will know more before that tipping point where ownership goes to 81% ChinaDL.
3. Payments
—- They already acknowledge late payments, now broken into two pieces per POET request and this now becomes secondary concern at most, due to #2 above. But it also says POeT expects immediate payment when business resumes. That tells me the Chinese are on the clock and stand to lose the deal if they are unnecessarily delinquent. Nice to have the other suitor as leverage.
4. New hires
+++ Two more industry high level execs, indicative of a pretty massive expectation of contacts, contracts and relationships.
5. Not mentioned in the NR, but, Bill Ring
Not a surprise, would not be surprised to see him doing some consulting/contract work for them. He and the BB Photonics crew may have invented the wheel, but Suresh and company are applying it to the axles, grinding wheels and turbines of photonics.
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