On Thursday, Resonant will be holding a hosting a Virtual Roadshow Webinar. This comes at an opportune time for traders as the shares of RESN have been weak for quite a while.
Shares of RESN recently traded below $4. This is a low for the last year and comes despite a large rally in technology shares in general, and many significant accomplishments from Resonant in particular.
Volume of trading in RESN has been very low as it has drifted down. And, short interest has increased along the way. The weakness stems, in our opinion, from the fact that RESN is still months away from meaningful revenue, and the fact that they will likely require another financing not too far down the road. These are both truths and have weighed upon shares of Resonant.
However, many companies are years from revenue and require financing; think of biotech. These, by themselves, are not necessarily good reasons to avoid a stock. In the case of Resonant, there is much going on under the surface that is extremely positive and driving value creation out of the public’s eye. This includes further advances in their industry leading software platform, increasing technological challenges for RF antenna designers, and, most importantly, continued strong customer traction.
The weakness in RESN stock has been a buying opportunity in our opinion. Not long ago we laid out the case for how Resonant could be $20 stock in the next couple years (a two part story, here and here). This is still the case. Now, with the webinar, the buying opportunity has become at once compelling and short-lived; we believe this event could spark a major rally in the shares of RESN and the current opportunity to buy it at these levels could be the last chance.
What could happen on the call? Well, first off, we don’t believe any company would announce a webinar to tell investors next to nothing. If business is simply tracking to the model, as explained on the last earnings call, you’re wasting everyone’s time having a webinar to explain this.
Resonant will likely, therefore, be announcing something meaningful to investors. What could this be? Perhaps the long rumored teardown of a phone with a Resonant filter inside has occurred? This would be huge as it would demonstrate customer traction and current revenue. Or, maybe the Company has won several more tier 1 customers which they will announce?
I’m not sure what the news is going to be. I am convinced, however, that it will be big news. And, based on my conversations with management, and judging from their confidence and posturing, I’m absolutely positive that it will not be negative news.
Therefore, we believe that RESN shares have bottomed. The business model is solid, the product is the best on the market with no real competitors, the space is growing rapidly, management is talented and focused and the stock is on its a**. It’s clear to us that now is the time to feast on shares of RESN before they’re gone.