It is interesting to contemplate what the future share price can become once POET is unveiled. Some people will look at Luxtera and point to the $660 million that Cisco paid as a benchmark. Cisco paid something like 10 – 12 times revenue based on sales of $50 million - $75 million. This was actually talked about at the meeting I was at during the sale of tranche 3. I think we and the company expect that once POET’s platform is recognized for what it is which I think will begin the moment that the buyer is announced. With further recognition confirmed as exceptional once transceivers utilizing POET’s optical engine begin to hit the market.  Then we will start to see a market value which is driven by the fact that it is a superior technology to how optical integration is achieved today in both performance and cost.   

What should follow is a ramp of production that drives revenues as POET gains a piece of the action.   I think if POET can maintain ownership of the company that sales can be generated into that hockey stick. At that point POET will in my opinion defy any standard valuation model and provide a share price that will make everyone happy as fund managers see the need to include POET in their portfolio.

On the subject of Cisco I found this statement interesting:

3. It has plenty of cash for domestic acquisitions

Earlier this year, lower corporate tax rates enabled Cisco to repatriate $67 billion in overseas cash. Cisco earmarked most of that cash for buybacks, dividends, and domestic acquisitions.

Bottom line: Nothing is ever easy and what they are negotiating with the buyer is much more than just the sale of DL. It is about the future business relationships and getting everyone on the same page.

The technology is awesome and insiders are positioned…as are many of us? Very much looking forward to the stock demand when everyone else is catching up with who POET is.