Phil-v: But I worry that they will blow it all on DenseLight. I know DenseLight has increased their staff, which indicates to me that they need more money on an on-going basis than ever.
I hope they haven't given up on the VCSEL, in which case the future is not what it was, I hope and trust they are still working on it. Without the VCSEL, Poet is DenseLight.
Please read Suresh's letter again, phil-v! He clearly and explicitly states that they are working on the VCSEL and on the detector:
- "First, it is important for the Company to gain greater control over its own destiny as we continue to advance technology and product development related to POET’s integrated optical platform technology, including both the VCSEL and detector."
Using DenseLight as a cash generator seems to be viable if it plays out as planned. Assuming POET can turn half of the USD 100 million capacity (ca. CAD 130 million) of the upgraded DenseLight into actual revenues, further assuming a margin of 29 % and a P/E ratio of a skeptical 10, the share price would be around CAN 0.64. This isn't #exciting, of course, but still much higher than the current share price – and based solely on the DenseLight technology. Assuming a utilization of the full capacity and a P/E ratio of 15 would justify a share price of CAD 1.90. Play around with the numbers to suit your own estimates!
Now imagine they can achieve to demonstrate a working POET VCSEL resp. a prototype of the integrated VCSEL transceiver. The P/E ratio could jump to, say, 50 and justify a share price of around CAD 3 – 6.
Disclaimer: The above contains a lot of assumptions. And as I learned recently, if you "assume" you make an "ass" out of "u" and "me".
