This Patriot Missile is in Countdown to Launch…

Patriot One is ready to take off when the FCC approval comes through. Like management said, “As we move into commercial roll out, we have customers from across the globe eagerly awaiting product.”

The Company has been very vocal in their comments about demand for their product. As they announced in early June, they have already pre-booked $2.7M in revenues for a product that doesn’t launch until the 4th quarter.

The shares of PTOTF aren’t fully reflecting this strength in underlying demand for a couple of reasons. Firstly, the Company raised money in an oversubscribed financing two weeks ago, which leaves them fully funded and shows investor appetite. However, the issuance of shares and warrants has created some additional supply, putting pressure on the stock.

On the positive side, they are now fully funded and demand for the offering exceeded supply, showing the investor appetite. The banker, Canaccord, will likely roll out coverage soon, which could be a positive catalyst.

The second thing weighing on the shares is the upcoming FCC approval. This has been long awaited and investors seem to want to have it in the rear-view mirror before getting aggressive with the shares. However, once it’s approved, the Company can fully expect to see many more customers lining up for the product. Production of units starts in Q4 and they have built out capacity in anticipation of strong demand. FCC approval will likely be a huge catalyst for shares.

Based on the upcoming approval, the near term overhang of the deal being behind them and coverage coming, along with the strong underlying demand for their product, it’s tough for me to see how the stock doesn’t perform very well for the rest of the year. My full report is available here.

Would love to know what I’m missing here, if anyone has a dissenting opinion feel free to comment…

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