Vince Martin
Long/short equity, value, gambling

Fade SemiLEDs' Stunning, Irrational Rally

A simple question to begin. Would you buy stock in a company that:

  • had a gross margin of negative 69 percent in its most recent quarter, and gross margin of negative 60 percent in the first two quarters of its current fiscal year?
  • saw revenue fall 39 percent year-over-year in that same quarter, to a level lower than half that was seen two years prior?
  • has a cash balance of less than $44 million, but has burned $60 million over the past eight quarters?
  • has a CEO who, in response to these challenges, is quoted in a company press release as affirming that "I believe we are on the right track..."?

Amazingly, lots of people are. SemiLEDs (NASDAQ:LEDS...

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