Benjamin Padnos

Long only, micro-cap, tech, growth
Benjamin Padnos
Long only, micro-cap, tech, growth
Contributor since: 2012
Lou, I have long believed Apple is the "tier 1" partner Energous refers to when it discusses its wireless charging development and licensing agreement, and that AAPL is the most likely acquirer of WATT at some point in the future. See my coverage from March 2015: http://seekingalpha.co...
Yes but I'm not holding my breath on that one. The millions of dollars invested in that project got us a white paper. The key for future deals is getting advance financial commitments. No more "spec projects."
@IOwn Well said. This is EXACTLY how I'm approaching $RESN right now. If I'm right, this could easily be a 10 or 20-bagger (or more). If I'm wrong, it goes to some number between $0 and $3.
That's the rationale behind my commentary that "aggressive investors with a healthy appetite for risk" should consider buying some shares.
@patricklirish that's a completely reasonable position. Management needs to execute and most investors will want to see commercial validation before pouring into the stock. But as I said, I believe we are close, and feel that the current price is a compelling price from a risk/reward standpoint.
Thanks for the comment and good wishes!
@Microcap Stars: This "scam" company has raised ~$75 million to date from various investment banks including Ladenburg Thalmann, ROTH Capital, National Securities, Oppenheimer, and MDB Capital. The CEO has had 8 previous exits totaling upwards of $5 billion and personally purchased ~$200,000 worth of WATT shares over the past several months. Energous signed a development and licensing agreement with a tier one consumer electronics giant, which I believe to be Apple, and has received $2.5 million in payments from this partner. Management has indicated multiple additional licensing deals are coming. Nearly 200 patents have been filed to protect WattUp wire-free charging technology, which won numerous awards at CES in 2015 (http://bit.ly/1JuJLBe). There's been extensive media coverage (http://bit.ly/1MN9WTg) from the likes of TechCrunch, Yahoo! Technology, CNN Money, IDG, CNBC, Fox Business, Bloomberg, and others.
Here's the bottom line: everybody has a "friend" who's always ranting about the Federal reserve, that the U.S. gov't was behind 9/11, why everyone should be stockpiling gold, and other nutty ramblings. You know this friend is bats**t crazy, but you keep him around because, well, he's amusing, and he makes you feel better about yourself. Energous is lucky enough to have attracted one of these trolls to its message board. There is certainly no guarantee that WATT shares go up, or that WattUp technology ever reaches management's goal of becoming as ubiquitous as WiFi. But the company and its technology are most certainly not a "scam" and the tier one customer, and dozens of other JDA partners, investment bankers, attorneys, accountants, auditors, etc. are not engaged in a giant conspiracy to commit fraud. Energous is one of the most exciting early-stage investment opportunities I've ever been a part of!
Note that Steve Rizzone, CEO of Energous, purchased an additional 22,000 shares in the November 17 financing at $6.90. Total purchase price was $151,800.
Here's a link to the Form 4 filing: http://tinyurl.com/oxk...
Shaun, thanks for being a voice of reason.
A friend has an expression I try to adhere to: "Don't argue or fight with fools and drunks."
In this specific case we have a troll with a short position with no regard for facts or evidence. We're not going to change his mind and further engagement just eggs him on.
Here are videos of media coverage from TechCrunch, Yahoo! and IDG:
TechCrunch: http://tcrn.ch/1GgGIP5
David Pogue / Yahoo! Technology: http://bit.ly/1I6CEBP
IDG.tv: http://bit.ly/1FCcmAZ
Ahhh, my biggest fan with yet another conspiracy theory about this "scam" company with a tier 1 partner whose CEO just purchased 22,000 shares (http://1.usa.gov/1MNaRmV) for $152k.
"The only thing approved is a monstrous receiver, the size of 10 smartphones...."
Wrong again.
Energous's IC measures 3 mm x 2mm inside the package. Here's a picture of the chip -- note it's a fraction of the size of a dime!
http://ubm.io/1PABnWk
Link to video: http://bit.ly/1FCcmAZ
I believe the tier 1 partner is not Asian, rather it's a large Silicon Valley-based company whose name and logo are a fruit.
I believe the $500k initial payment and the $2 million milestone payment are just the tip of the iceberg on this deal. And if WattUp is embedded in every phone, watch, tablet, mouse, keyboard, etc. this company manufactures, the potential value of this ONE deal is north of $100 million.
I believe additional partnership deals will be announced this quarter which include either up-front licensing or royalty payments and/or non-recurring engineering (NRE) fees.
I believe the shares are going to rip leading into CES, and that the market leaders in wire-free charging technology should have a valuation multiples of today's price.
I'm long. You're short. We'll see who's right.
My hunch is the company's Tier1 partner, who has paid Energous $2.5 million so far, as well as future licensees they intend to announce in the coming weeks and months, know a little bit more about the regulatory landscape than an anonymous poster on Seeking Alpha.
Ahh yes, the tired old "scam" argument from a highly-credible individual hiding in anonymity. The $2.5 million in payments from the tier 1 with more 7-figure checks and additional licensees coming invalidates your claims.
Minor correction: John Gaulding was appointed Chairman, so CEO and Chairmanship are separate. http://bit.ly/1Lml9Iv. I share your frustration on the financing, however I used it as a buying opportunity and added to my position. $WATT shares should rip heading into CES.
If Energous's tier one chooses to integrate WattUp into its mobile devices, wearables and other products, it will breeze through FCC Part 18 approval.
Sounds like I have a fan! Thanks for the shout-out.
Correct. Poor management of the secondary process by the company led to a nearly 30% decline from $9.63 to $6.90. Should have waited until after CES. Mgmt and BOD are extremely naive about micro-cap finance and let Ladenburg and ROTH destroy nearly 30% of shareholder value ahead of the deal. This was very expensive money and far more dilution than necessary.
Yes I'm sure they pre-sold, and yes it's illegal. Would anyone be surprised to hear there's unethical behavior on Wall Street and poor/no oversight?
Next, Founder's sales come from a blind trust. He has no input in the selling. Optics are bad, and I wish they'd stop selling because the sales help with shorters' scare tactics.
The financing is to give the company enough cash into 2017 when it expects to be cash-flow positive from licensing and royalty revenues.
Also puts company in better negotiating position with its tier 1 partner and future licensees.
Ladenberg and ROTH knew about the deal earlier last week and their clients pre-sold against the financing, which is why it went from $9.63 to $6.90 in the days leading up to the deal. The chart tells the story.
The insider selling is through the Founder's blind trust and unrelated to the financing. The optics of the selling are certainly bad, but the Founder has no control over what the Trustee is doing.
Total bear raid. The shorts on this one are in a tremendous amount of trouble, and they know it. Look at the short interest, which grew by ANOTHER ~225k shares, to nearly 2.1 million, since the last report:
Date Short Interest Avg Daily Volume Days To Cover
9/15/2015 2,071,962 115,020 18.013928
8/31/2015 1,846,430 81,061 22.778278
8/14/2015 1,738,847 93,467 18.603860
7/31/2015 1,567,487 113,866 13.766067
7/15/2015 1,477,454 87,578 16.870150
6/30/2015 1,395,746 34,995 39.884155
6/15/2015 1,400,422 41,101 34.072699
5/29/2015 1,408,091 54,632 25.774107
5/15/2015 1,342,383 88,958 15.090076
4/30/2015 1,089,501 47,266 23.050417
See: http://tinyurl.com/oyq...
Not a tout and have no special relationship with MDB. I'm a long-term investor focusing on 1) disruptive technology; 2) backed by significant IP portfolios; 3) targeting massive markets; 4) run by high-caliber management teams. I come in early -- seed and Series A -- and participate in follow-on rounds including IPOs and secondaries.
$WATT a significant position and Friday 9/18 price action very encouraging. Shorts are in trouble on this one -- the tier one partner is legit. Look for a significant up-tick in revenues in Q3 from the $225k in Q2.
Yes, Thomas. Hunter Adams is the Founder of The Street Sweeper (see: http://bit.ly/1nbRA7h). He was indicted on "pump-and-dump" charges in 2001 (see USA Today: http://usat.ly/1Biey2q and NY Times: http://nyti.ms/1BieyzF) and later convicted (See: Justice.gov: http://1.usa.gov/1YlqKcp). Launched The Street Sweeper in 2009 and instead of pumping, he now helps coordinate short attacks (see: http://bit.ly/1A6eVsu).
Short interest now at 1,846,430. (See: http://bit.ly/1wrD4x8). Timing of this article is just two days after ClearSign's big announcement: "ClearSign Announces Initial Commercial Order with Aera Energy LLC Under Multi-Unit, Multi-Year Purchase Option" (Link: http://yhoo.it/1iwwWhu)
FYI, an article from September 2010 in the American Journalism Review (Link: http://bit.ly/1A6eVsu) points out, "Hunter Adams, the brains behind The Street Sweeper (http://bit.ly/1ynRNXw), helped launch the site last year, just eight years after federal prosecutors labeled him an associate of the Gambino crime family in New York (See NYTimes: http://nyti.ms/1BieyzF). Adams, who was convicted for his role in a massive 'pump and dump' scheme involving penny stocks, is still on federal probation for his crime." (See USA Today: http://usat.ly/1Biey2q)
Regarding size, please watch this video from IDG.tv:
http://bit.ly/1FCcmAZ
The tier one partner, potentially Apple, is driving the FCC approval process. They'll get it through, and consumers will be wirelessly charging mobile devices in 2016.
With respect to patents, I believe Energous's I.P. portfolio is worth multiples of the current market cap. They have filed applications for more than 150 patents and several will be granted in Q3 '15.
@77heath77 I've been tracking Energous closely since early 2013 when I participated in a pre-IPO bridge financing. I speak with management regularly. The company has plenty of runway. CFO Brian Sereda has publicly said they have "sufficient working capital runway into the third quarter of 2016”. And there's no guarantee they will ever get to the point of needing additional capital -- the tier one partner or another company could acquire them at any time. Or, they could get financing from a "strategic" investor and never go back to the market. Net-net, you have a couple of points of downside risk related to a potential financing and 10-20 points of upside if things work out as I foresee.
I believe the following:
1) Energous's "tier one" partner is Apple;
2) The company's recently-expanded licensing and development agreement is essentially a "first look" for the partner to buy Energous;
3) That the initial $500k is just the tip of the iceberg on payments WATT receives from its partner;
4) With the partner now driving the FCC/regulatory process, the likelihood of approval is near certain;
5) That Energous, with 125+ U.S. patent applications and foreign equivalents, has a stronghold on the intellectual property in this space;
6) That uBeam's ultrasound-based solution only works in the line of "line of site," which is a vastly inferior to WattUp, which is a more "reflective" WiFi-based technology; and
7) uBeam is years behind Energous with respect to commercial viability.
Your concerns are valid. I write what I believe will happen, but include mention of the stock's "high risk" nature and disclosure of numerous risk factors. The facts are that uBeam is ~2 years behind Energous and is rumored to be raising money at 5x WATT's the valuation. National Securities ($28), ROTH Capital Partners ($16), and Oppenheimer ($13), all have detailed research and price targets significantly higher than today's ~$8. A take-out before another round is, in fact, possible, but if they do a secondary, I think it'll be at a higher price than today. Time will tell! Thanks for reading and commenting.
I am absolutely not compensated by MDB in any way, and have very sincere motives when I publish on Seeking Alpha. I write publicly under my own name, disclose my positions, and do a tremendous amount of work leading up to my articles.
I have participated in numerous MDB-banked deals (both bridge/"Series A" rounds as well as IPOs) and it's been a profitable strategy for the past several years. This recent development at RESN is a bump in the road and comes with the territory of early-stage "public venture capital" investing. Furthermore, hindsight is 20/20; I obviously should have sold all of my RESN back in February in the teens and bought back today at ~$5, but I don't trade these stocks, I hold them for extensive periods of time. I think my conviction will be well rewarded in the long run.
I believe there were approximately 950k shares short as of 3/31/15 with a float in the 4-4.5 million share range.
I think companies like Apple, Samsung and the other names on the list I provided have a tremendous amount of experience with the FCC and other regulatory groups, and that they know what they are doing. I believe FCC approval will happen for WattUp, and I think if the "short" thesis is built around that, they're in trouble. There's $10 of downside on WATT shares and pick the $ of upside if the partner is Apple and WattUp becomes the wire-free charging standard in iPhones, iPads and Apple Watches...$40? $65? $90?
Hang in there, @22thoroughbred, don't let the bashers shake your conviction and feel free to reach out to me privately anytime. I've purchased shares pre-IPO, at the IPO, and at the secondary in December, and this is one of the most exciting companies I've been around in my 20+ year career in early-stage technology! Institutions and other professional investors are taking notice -- this new development and licensing deal provides a tremendous amount of credibility to the story. I think this one's just the first of several deals they'll announce in 2015.