Poet Technologies (TSX: V.PTK, Stock Forum) is a classic tech startup with disruptive technology that could change the face of integrated circuit fabrication, making up for the relative death of Moore's Law. With its patented proprietary POET platform for the monolithic fabrication of both electronic and optical elements on a single semiconductor wafer, the company stands to revolutionize hardware design from servers to smartphones, providing both increased speed and power efficiency. A potential boon to investors. That is, if it can get the idea to market.
That's the trouble with tech, like with junior miners, investors hang their hopes on an idea and wait for management to strike 'gold' when their product finally hits the market. Tech is grown and typically there are no overnight success stories, as it can take years for something to go from paper to a marketable product.
A lot of things can change in the time from concept to delivery. The market can shift, the technology may become obsolete or the idea may become unworkable, leaving investors on pins and needles until launch day. This results in share price volatility that can sometimes submarine a good operation based on conjecture long before it even has a chance to prove itself.
POET is in the aforementioned transition period and today was an example of typical retail investor nervousness when the company announced that its Chief Scientist, Dr. Geoff Taylor, had disposed a total of 300,000 common shares.
The market SP wobbled and dropped, despite the fact that Dr. Taylor stated, “I want to stress that this sale was made for personal financial reasons, and in no way diminishes the belief I have in my life's work, that is POET. Furthermore, I do not plan on selling any additional shares until sometime in 2016.”
It is also important to note that this was the first time in over three years that Dr. Taylor had sold off shares and he still continues to hold a major position within the company currently tallied at almost 1.0 million shares and 2.89 million stock options. Not the sign of an insider looking to jump ship.
There is still volatility in this stock and it may not be the last drop. After all, the company still has two milestones left as it attempts to repeatedly and reliably achieve the 100nm scale never mind taking those PET devices and processes to the 40nm size. This is both an exciting and relatively unsure time.
However, I have confidence in this team, both on a management and technical level. The company has survived a very long development timeline which has left all other VC-backed startups broken, giving it a considerable competitive edge. Also with Executive Vice Chairman, Ajit Manocha's status and ability to call industry heavyweights such as Tim Cook (Apple) and Eric Schmidt (Google) to the table, the company has significant marketing clout.
The POET platform is a serious a game changer, offering a 100X speed improvement combined with a 10-100X improvement in power efficiency over the standard CMOS silicon IC. There is little doubt that POET has the potential to dominate what is currently a $430.0 billion dollar semiconductor market.
In the end, today's negative bump was a minor stumble on a ~75% climb from January and only provides an opportunity for longs to shore up their investments on the cheap. That said, for reasons mentioned before, there are no guarantees, POET may not succeed in its endeavor. That's the beauty of this game.
POET Technologies was in the news recently when the company announced its collaboration to reproduce and enhance the repeatability of its 100nm results at the beginning of September.
Shares were down 5.97% on the news to $1.26 per share.
Currently there are 163.9m outstanding shares with a market cap of $206.5 million.
