I expect these are scary times for Peter and the board. The 100nm ring oscillator and a 50-gigahertz VCSEL are both industry show me items in which multiple companies will be or have been looking at and I frame it this way because there is no way to know how much information is now in the hands of these companies which have NDA’s with POET. Now what is scary about this? So any of the companies that are in the line to access the commercial capabilities of POET could in fact take a run at POET. The share price is so cheap right now in relation to the disruptive capability of the technology. So any one of these companies could make an offer that provides a massive premium above the current share price but would still be very cheap in terms of what this technology offers. The company is vulnerable but there is a shareholder rights plan that affords some protection. The problem as I see it though is that unless a company has actively been accumulating shares then no one owns anything significant at this time. The only real shares that are probably an easy target would be the roughly 10% that Pinetree holds. I think it unwise to think of those shares as being in firm hands. If someone offered a 200% premium to the current market price for those shares I think there would be a good chance they might own them. But otherwise I don’t think anyone has anything close (pre-arranged) to have the ownership required to trigger an SRP event (20%). And everything I have read on the subject (which is not a lot) points to an SRP as being a tool used to extend an offer period and the regulators seem to be leaning in that direction.
So if someone was to actively begin accumulating shares in the market that 200% premium would shrink as the acquirer drove the share price higher especially once an early warning report was issued on the new significant shareholder. So for right now I think the strategy of a buyer and one has to believe that as soon as these milestones are weighed that companies will want to own it if they think they can pull it off. Danger here of course to the acquirer is that once they make an offer it would have to be friendly because if they were not assured of success they would run the risk of alienating POET by being opportunistic.
So what would POET do? They would mount a defense as quickly as they could before they were forced to present any offer to shareholders. The thing about it is that as soon as any offer is tabled the share price immediately rises to that level and other companies become involved and in this case there could be a lot. So one move that POET might want to make right away is to attract a White Night that no one could stand up to. If POET could pull of a relationship with Apple no one could touch them. If Apple was allowed to have certain controls such as exclusivity in the most important verticals to Apple they could be a great partner. Who else has the capability to move quickly on so many fronts?
I don’t know but I think we are going to see some epic moves over the next several weeks. The share price has been well controlled in my opinion and there has been no efforts to take a dominant position in the buying as that would not suit anyone who is planning to make a cheap offer. But there is no question in my mind that Peter is going to do whatever it takes to get the share price higher and the quicker the better. Although I think the majority of shareholders are in this for the long run it has already been a long journey for many and there is no doubt a lot of investor fatigue which I think an acquirer will assess.
One last thought. I believe that there have been certain companies that have been avoided in terms of sharing milestone data. So one would also consider that POET is likely to allow those that were waiting for the results to have the time they need for assessment before POET discloses those results to the rest of the world. Of course if there is a takeover mounted by one of those companies that have seen the results then one would anticipate POET would want to make that data available to the public fairly quickly in order to get the share price up.
PS…for those who have not participated yet in the “Questions for POET” survey (me) make sure you get to it as soon as you can before Sunday.
http://agoracom.com/ir/POETTechnologies/forums/discussion/topics/640016-please-submit-your-questions-to-poet-technologies-%E2%80%93-now/messages/2007807#message
