Chris: Thank you for the information. As a long term shareholder I believe I have a large capacity to suffer. A take away from the interview is that this company is embarking on a journey wich should attract large long term investors similiar to Berkshire. This company will undoubtedly create large amounts of cash which by necessity will have to plowed back into the business to develop the plethora of markets and products they have an opportunity to develop. So as you point out they will soon be valued in relation to their peers. In my opinion this should be taken one step further.
It is common for non profitable startups to be valued as a multiple of their cash flow/ In the case of Poet this should be a significant premium as not only do we have rapudly growing products to develop the margin realized by these products will be large.
Case in point -- In the Data Center cableing business it has been shown that their are extremely thin marginns in the neighborhood of 3% to 6%. If we are to position our VCSEL product just 10% below the current market we can instrantly drive our competitors out of business. With our production costs a fraction of our competitors we will likely enjoy at least 50% margins. The market will definatley see this in spite of the lack of dividends and will value our cash flow accordingly. This money will be available to plow into the company to develop new products which will again dominate the market place.
It is njot unusual to value low IQ, low margin start ups at 5 times cash flow. Given the margins we will enjoy with our products and the ability to reinvest to generate exponential growht I will guess that this company should be valued at 10 - 15 times cash flow.
Thes means if we generate 200 million next year as cash flow we should see the stock rise to $10 - $15.
As some have pointed out. The VCSEL was being worked on in October 2014. I have full faith that this bunch will have prototypes and sales much earlier than preduicted and the recent announcement that the new lab is being phased in 3 months earlier than predicted is an example of things to come.
Rick The Vet
