Kath, you’re saying we must try to remain positive, stop talking about the low shareprice and when revenue comes. I do like that and thank you for that. We should always strive to maintain a positive outlook to the best of our ability. But to be honest, I do believe a forum like this is also made to share insights on the shareprice. So we observe that the stock price for POET is trading at a low level and significantly below its intrinsic value. But why and what are the prospects? And do we really have nothing more to wait for better days? I believe many investors actually do have reasons to sell nowadays (pay bills, other investments,...) So it is important to discuss today’s shareprice so that everyone can make the right decisions.

I'm sharing my personal analysis below.

First and foremost, investors may believe that POET is undervaluated and cheap. Being cheap however does not necessarily mean it's a good buy. Often, there's something wrong. As long as there's no catalyst to unlock value, it remains dead money or, in many cases, slowly deteriorating.

Moreover, in a bear market (especially with the three unstoppable, inflationary drivers: decarbonization, demography, and deglobalization), the interest in small and mid-cap stocks has waned due to the dominance of index trackers and the rush toward fixed-income products. Well, if inflation is at 6 to 7 percent, everyone loses. So, the goal becomes minimizing losses, and POET hasn’t proven itself to be the place to be for investors aiming to minimize losses. Moreso, with the slightest piece of bad news or the appearance of a large seller, there's a risk of catching a falling knife. Inflation is here higher for longer, so that’s another no for POET which we can’t ignore. On this front, POET can't do more than acknowledge the market conditions.

Furthermore, POET is venturing into AI and datacom as its first two verticals. POET’s own choice and the best choice in my opinion. These are two convincing, large markets for POET. I believe everyone is convinced that artificial intelligence is here to stay and will significantly change our lives. However, the playing field will level out for many as accessibility becomes widespread. This leads to a situation Warren Buffett once illustrated with a sports game. The stadium is full, and there's an exciting phase where a player enters the penalty area. The first row stands up in anticipation, and soon, the entire stadium is on its feet. Everyone can see equally well, but everyone is in a less comfortable position. Investors must question what return AI will yield. In this regard, Investors more cautious. It will create value but also destroy value. It's too early for me to distinguish winners from losers. The American chip designer Nvidia is seen as a winner, but don't forget that its stock has had two periods when it dropped 80 percent. I believe POET is right to enter this market, although it won't immediately benefit the company due to the time it takes to bring products to market and generate substantial revenue. Investors should also consider and remain realistic when it comes to companies that provide hardware to those focused solely on AI. The demand for more complex memory chips will continue to rise. So when the time is right, POET will be well-positioned, but it will still take some time. This, in my view, is more than enough reason why POET's AI campaign hasn't yielded significant results (yet).

As for datacom, POET is making good progress. More than ten products are coming to market, and POET already has multiple customers. However, a caveat is necessary here as well. The current market, especially the chip market, is complex and volatile. In the post-inflation era, we see a strong industry demand but a significant decrease in consumer end demand. While the demand for semiconductors remains significant across various industrial sectors, the market for consumer electronics and telecommunications is saturated. This trend was perfectly illustrated on Tuesday by Ericsson. The Swedish manufacturer of mobile network equipment saw its revenue decrease by 5 percent in the past quarter due to reduced investments by telecom companies. Ericsson anticipates that the uncertainty regarding its mobile network activities will persist into the next year as well. The automotive industry is also a prime example of this. Due to the electrification of the vehicle fleet, the demand for semiconductors remains robust, as electric vehicles contain much more software than traditional combustion engine vehicles. The sales figures of the expensive chip machines from ASML are an indicator of global electronics demand. Today, we'll see what this company has to report. For now, the contribution of those revenues to the total income is limited, but as the consumer cycle turns, POET will also benefit with an expanded customer portfolio. However, it will still take some time for the real revenue stream to materialize, and this aspect is affecting the stock price in this vertical as well.

Finally, POET has a high retail shareholder base and low liquidity, which in turn leads to reduced investor demand, resulting in less liquidity until it fizzles out. Additionally, we're faced with a CFO who has made efforts to establish a strong product arsenal for the company over the past seven years with minimal dilution and, notably, without incurring debt. Unfortunately, we have only a 4-month cash runway with the current funds, which raises questions and concerns for potential new investors. POET must provide clarity on its cash position promptly because among all the factors beyond our control, this is one we can manage. Investors are left with numerous unanswered questions. The current financial risk is the most significant concern for investors and addressing it as early as possible will be beneficial for shareholders as well as the company.

Furthermore, POET would do well to outsource production through joint ventures, as chip manufacturing is more capital-intensive than design. But the primary reason is geopolitical risk. We might wake up one morning to find that China has invaded Taiwan. People are taking this possibility into account as well. Although I believe we will absorb that shock given our diversification and ambitions to expand outside China (probably Singapore).

In conclusion, there are several mechanisms at play today that negatively impact POET, and this is why both institutional and retail investors are cautious about buying POET shares. Therefore, I don't foresee a stock price increase in the near future, but I believe that in about two years, POET will be well-positioned. With the right decisions, however, the stock price can change quickly. One of these right decisions, is POET adressing shareholders concerns. Those who can stay strong today can generate substantial profits but the company has to adress today’s concerns.