Chris Hofmann

Chris Hofmann
Contributor since: 2012
When valuing Yahoo ex-BABA, you forgot to remove Yahoo! Japan and cash. Assuming Yahoo! Japan is taxed fully, these are worth ~$11.50.
Adding this to your range gives you $37.50 to $53.50, or 2.5% down, 36% up. That is a drastically different picture, and much more bullish than what you have outlined.
Wow that is deceptive.
That is cash and assets. Not just cash. Through June, Vringo showed $31.65M in cash:
More lies from RxR.
That 7" tablet for $30 that he links to is originally priced at $149.99. It is currently selling for $30 due to a rebate and it is 'refurbished' (many of the reviews mention scratches and dents).
In addition, despite being priced at $149.99, many reviews also mention that the biggest problem is that the touch screen is poor - laggy, unresponsive, poor sensitivity, etc. One user even wrote: "The unit could be nice if the touch screen worked regularly. Some touches do not register and you have to touch it 3-4 times before it registers. I've allowed several people to test this in case I have dry fingers."
But its alright, lets just ignore facts like usual.
Another article from Adam Gefvert. The odd thing is that it literally doesn't say anything new compared to your other article from less than 1 month ago. Again, it is simply full of both unsubstantiated statements and irrelevant facts stated to sound bearish.
My favorite one is this insightful line straight from the summary: "Whether Uni-Pixel succeeds or fails, executives will still get rich off investors' money."
That is true of EVERY company and, furthermore, it offers zero insight into whether or not UNXL will succeed or fail.
The other two points of your summary are, as far as I can tell from the article, based on nothing other than your own opinion. It amazes me that SA allows you to publish these articles. Why do you think the new mgmt is promotional? Do you have any proof? Have they missed any deadlines? (the answer to both is 'no'). Why do you think they are using 'pilot production' loosely? The term does have a specific definition, although I will agree that it is often used to mean many things. But how do you know how UNXL is using it? Did you help them write the PRs? Are you familiar with their specific manufacturing process? (again... 'no')
The only part of this article that remotely offers some insight into the potential failure or success of the company is the section titled: "Uni-Pixel is far behind the competition". However, even in this section you just compare them to XSense and O-Film while readily admitting that Uni-Pixel uses a different technology / process.
Finally, just to nitpick, you state that Uni-Pixel started touch in 2012. I don't feel like looking it up, but I know that everybody's favorite UNXL bear RichardXRoe (who I am sure will post in these comments) loves to link to a 2011 filing from UNXL stating that they have had 'success' with touch.
**Edit - While I was writing this, RxR did exactly as I stated he would. Shorts are like clockwork**
The only real facts are as follows:
1. UNXL is attempting to develop / produce metal mesh touch sensors using a unique process that will be significantly cheaper than current technology.
2. UNXL has had success in lab products, but has had issues transferring the technology to Roll-to-Roll machines for mass production
3. UNXL has piqued the interests of several very large corporations, including the 'PC Manufacturer' (rumored to be Dell), 'Ecosystem Partner' (rumored to be Intel), and Kodak.
4. UNXL currently has some sort of tablet manufacturer lined up if production is achieved
5. UNXL recently claimed that they have achieved roll-to-roll manufacturing at their Lufkin, TX plant, and needed to transfer the technology over to the Kodak plant.
6. UNXL has admitted that they are still doing yield-testing on the roll-to-roll machines, specifically for long runs. Do not confuse this for stating that the process does not work. It does work, UNXL just wants to improve yields.
7. Investors do NOT know if UNXL is attempting to improve yields from 10% to 50% or from 70% to 90%. Anybody who claims otherwise is speculating. However, based on the fact that UNXL is claiming the process works and that the yield testing is specifically for long-runs, I personally do not believe it is a stretch to assume that short-run yields are fairly high (and hence 'successful') while long-term yields are on the lower end. If I had to guess what 'high' and 'low' meant... maybe 'high' is 65-90% and 'low' is 30-50%. Again, these are just random guesses.
8. Finally, and perhaps most importantly to some - if UNXL is successful, the stock is worth multiples of where it is currently trading. If UNXL is not successful, it will slowly drift to zero.
Oh Adam... You give 'CFA' a bad name, assuming you actually have one. I don't want to have 50 replies to this one article, so I will just leave one big one.
1. For those who don't know, Adam Gefvert wrote a bearish article on UNXL over a year ago, with the main focus being an interview with touch screen "expert" Ivan Jimenez. Ivan Jimenez promptly came out and said that he is not an expert, merely a fellow short, and works in a completely unrelated field. This does not speak to the company's merits, but to Gefvert's research.
2. You state that UNXL gave no visibility into production - did you even listen to the call? The CEO directly said that they are in the process of transferring their technology to Rochester (Kodak), will give a further update on the Q2 call (5 weeks), and at this time expect to be shipping before year end. It is impossible to be more direct than this without stating as fact that which is not. I understand that many investors (long or short) are having comprehension issues with the transfer from a 'marketing' styled CEO to a conservative, under-promise styled CEO, but this is the new management style. The CEO hasn't been around long (only a few months), but so far he has kept every deadline regarding manufacturing updates and progress, and I expect that to continue.
3a. You state: "By pilot production status, the company means that the yield is not only low, but also unpredictable." This is a false statement. By definition, pilot production means that commercial product will not be made off of the line because it is for testing / experimental purposes ONLY. As soon as the EXACT same technology is transferred to Rochester, it suddenly becomes non-Pilot production. It has nothing to do with yields. Your parallel is useless. I could easily say "to draw a parallel, it took company xyz only 2 days to fix any yield (or other) issues. UNXL will do it super quick!". The two companies have nothing in common.
3b. You state that the CEO gave vague answers on gross margin. What is your point? Every company in the entire world gives vague answers with regards to margins / yields. If you want clear answers, you read their income statements. This is research 101 and is taught quite well in the CFA study materials.
3c. Yes, they are focusing on smaller tablets at first. You state that this is an issue because there is less of a price benefit at smaller sizes. You use Atmel as an example. This is the crux of your argument, and it is flawed. You wrongly assume that all touch screens are created equal, and all metal mesh is the same price. UNXL is CHEAPER than ITO and Atmel at ANY size, especially at larger sizes. Why do you think they already have a buyer for that tablet size lined up? Because the buyer is just dying to try a new technology for the exact same price / quality? Furthermore, if you did more research you would know that ITO is currently selling essentially at a loss, which is unsustainable in the long-term.
3d. You state that as time goes on, ASPs will continue to decrease. Again, this is actually somewhat flawed given that ITO is currently selling at a loss. This is why the market has cycles (*GASP* shocking!). Most likely, prices will rally again for a while before falling further. They don't move in a straight line.
4. Again, you assume that xSense is the exact same product as UNXL, but it isn't. I personally have always stated that I think UNXL will do much better than xSense. You know who felt the opposite (and was long ATML and/or Carclo while short UNXL?) your 'expert' Ivan Jimenez (see point 1).
5a. Yes, TPK is definitely hurting. Their overall profit margins have decreased from 8% at the end of 2012 to 0.48% today. And they have other business units besides touch sensors that are bringing that average up (i.e. touch sensors have negative margins for them).
5b. UNXL will have no issue competing with these prices. at $1.50 per diagonal inch, a 7" tablet is $10.50 for the module. Sensor is typically ~50%, or $5. UNXL should have no issue selling it at $3 for that size with significant margins. Remember... not all metal mesh is the same, manufacturing differences can result in significantly reduced COGS / CapEx
5c. "However, this problem can be solved by carefully aligning the pattern with the display. This step is best done by panel makers." Funny you should mention this.... O-Film actually solves it by using a randomized pattern, i.e. there is nothing 'careful' about it and it isn't 'aligned' to anything. There are many ways of solving Moire. UNXL has shown in their samples that they are Moire-free.
5d. Fun facts... It takes roughly the same amount of time to have a phone-call, email, or video-chat with somebody 5 miles away as somebody around the world. More fun facts... you can ship something from NY to Korea in about the same amount of time as you can from China to Korea... i.e. in under 2 days. While there are definitely benefits of being 'nearby', they are overblown. The true benefits lie within vertical integration, which O-Film does not have.
5e. It has been discussed ad nauseum that ~5-6 microns is the maximum size necessary, and going smaller doesn't help that much. UNXL's screen is fully transparent, and therefore not an issue.
5f. This sounds more like a lesson for ITO than UNXL.
Fun Additional Points!
1. You mention the Intel Walker Mobile report... UNXL used to be mentioned, no longer is, but they are still sourced in a photo on slide 77. Previously, the report stated that UNXL was the only company using a truly additive process, which could be significantly cheaper than other metal mesh if successful... Again... not all touch is created equal.
2. UNXL is no longer picking 'samples', they have a fully working production line. Hence their CC recently.
3. UNXL has already discussed that once they transfer the technology all to Rochester, they will have an analyst day, which they expect to be in early Fall. I expect that at this point they will also be shipping product, since the whole point of the analyst day is to show off WORKING manufacturing. This falls in line with the other hints they have been dropping about when they will begin shipping, which the shorts continue to ignore.
It probably helps that Citi's buy rating had a $21 PT
In the end, what it comes down to is this:
PHOT has more or less become a MJ-focused microcap PE structured vehicle, taking equity stakes in unproven companies that they believe will become very successful in the MJ space over the coming years.
None of their deals will look good "today", because it is all focused on "tomorrow". None of these businesses could possibly be successful today, because it is a new industry that is just now being legalized.
Personally, I've seen Small Cap Machine spread his drivel before with other companies, but we don't need to get into that. I fully believe that he is "sponsored" by somebody to write biased articles using one-sided research.
The drug is an older drug that they recently came into ownership of (in January 2014). They are clearly using the PRs to let people know why they like this drug and how they will be utilizing it going forward. Some of the reports are of course old since they have not yet run any new studies since they just received the drug.
The better way to look at this would be to dig up the Adderall Phase 2a studies and see how it compared to the placebo. I have not done this.
It is statistically significant, which is all that matters. Like you said, it is a qualitative assessment, which means that lots of placebo patients will "think" they are getting better because they want to be getting better. It makes sense that both numbers might be artificially inflated by some degree. What is important is that:
1. There is improvement.
2. It is statistically significant.
just one point.... you say that people will still use "illegal" dealers because of a 25% tax... but there are two very obvious arguments against this.
1. Anybody who is actually dealing illegally is taking a huge risk, and will therefore charge much more than 25% as an extra "tax" to compensate him/her for that risk.
2. If MJ is completely legal everywhere, then there is no such thing as "dealers". There could be tax evaders, but those exist in every market, and it has nothing to do with the product.
I agree with you 100% on all points. I personally believe that there will be multiple GIFT announcements in February, starting immediately after the A/S increase on Feb 8th. I think that the financing for GIFT is going to come directly from A/S, and therefore PHOT can not officially make any announcements / "sign on the dotted line" until the A/S is increased.
Those who don't understand the difference between shares outstanding and shares authorized shouldn't be posting here.
Those who make comparisons such as "3 billion shares outstanding, that is 10x that of Google!!!!" shouldn't be posting here, as this sort of comparison is 100% useless given that shares outstanding is easily changed through splits.
When shorts (LfD) say things like that about the building address, it shows that they are either:
1. Completely ignorant
2. Completely idiotic
3. Clearly trying to just manipulate others
4. Some combination of the above.
Maybe I'll try to track them down, I'm in Bryant Park all the time.
You are exactly correct. The difference is that early biotechs have a high chance of NOT being approved whereas MJ is already on the path to approval and has a high chance of 'success'.
While I agree that many of the MJ stocks probably are overvalued and will crash down, I also believe that several of them are very undervalued and will be significantly higher (multiples) over the next 3, 6, 12, 24 months.
The difficulty is doing the proper DD to know which ones will be 50% of current prices, and which ones will be double current prices.
Your article outlines that yes there is risk involved, but doesn't try to distinguish any of them from each other.
What you say is completely true, that they need GIFT, KIOSK, and finance deals to ever potentially reach $2 (or $1). However, increased equipment sales and margins (due to huge demand / low supply) will help support CURRENT pricing, thus limiting downside while still having the upside of GIFT, KIOSK, and Finance.
Let's not discount that importance.
on a completely off-topic note, I'm glad that some people actually realize that Krugman and Limbaugh are in fact polar opposites, and neither one sits anywhere close to the middle of the political spectrum..
As for on-topic - new PR today:
and new article by Alan Brochstein -
I've been following your posts in particular on this article, and you seem to have very steadily and slowly gone from semi-bearish to semi-bullish.
Just an observation. Might have to do with your off-board conversation with Alan.
PHOT definitely has long-term potential though, which is more than can be said about most MJ stocks.
My guess is that many states will use the mid-term elections as a way to popularize the vote and legalize in November.
The remaining states will use the 2016 presidential elections to do the same.
Employers fire you for showing up to work drunk too. Does that mean that we should short all alcohol-related companies?
Alaska is next to legalize (already decriminalized). Many other states will follow in 2016 (election year, easier to get things to pass). There will be lots of excitement and expectation leading into these votes.
you realize that all of these employees are KODAK employees, not UNXL employees, and therefore do not cost UNXL a single penny. It just further shows that Kodak is very much invested in UNXL's success.
Of course, if you believe that Kodak is lying about everything as well.....
I've been trying to stay out of this argument, but enough is enough.
1. Buysider, keep up the good fight. It is tiring, but somebody has to do it.
2. LindonT, you're most recent comment about the "typo" in the recent R&D article is completely false. I contacted the author of the article and he clarified that Kodak currently has ~25 FULL-TIME people working on the UniPixel project, and approximately 75 PART-TIME. Over the next few weeks, they are increasing the FULL-TIME workers to 65-75, with many of these coming from the current part-time workers (i.e. support).
Nobody is being diverted away from UNXL, only towards them. Please try to get your facts straight before spewing nonsense.
RxR, I only posted what I was emailed, verbatim. Clearly Kodak IR was misinformed in some way.
You clearly have no idea what the function of a CEO vs. a BoD is.
You also don't seem to realize that UniBoss (now Copperhead) is very different than InTouch.
I actually agree with Buysider2's hypothesis. But I also readily admit that it is just that - a hypothesis. Will new management under promise? Will they issue aggressive timelines?
With Reed Killion at helm, we knew that a "Q2" deadline meant June 20th at the earliest, and potentially much later. With new management, does "Q2" mean April 1st? or even earlier? or should we still be expecting June or later?
Unfortunately, we don't know yet.
It is fairly obvious, in my opinion, that Reed Killion was forced to resign (aka was 'fired') due to investor pressure and a few missed deadlines.
I expect (but have no hard evidence) that the manufacturing process is still in tact and they will still be shipping in the near future.
We will certainly know more in the coming weeks.
While I am not trying to spin anything as positive, I also want to make sure that facts are facts.
COO Shin has largely just been a figure head for the past 6 months or so, which is why they brought in Rusenko.
WFG dropped coverage because the analyst that covered UNXL has left the firm for a new job. The timing regarding the Uni-Pixel departures was purely coincidental.
The CEO departure is clearly a short-term drag on the stock price, but Kodak won't let the product, which does work, just sit idle. It is time for InTouch to truly be "Powered by Kodak".
Mint, let me explain.
Lets say that you want to be short 100k shares when the stock is at $8, but you know you want to short an additional 100k if it goes to $10 (doubling down, so to say). There are currently 200k shares available to borrow, and you know that historically there have been times where it is very difficult to borrow. So, instead of just shorting 100k, you short 100k and go long 100k.
You are only net short 100k at $8, as desired, but you have gained flexibility. If the stock climbs to $10, and there isn't any short available to borrow, you normally wouldn't be able to short the additional 100k that you desire. But since you already did, you can just sell the 100k long that you have, and now you are 200k net short, as desired, without having to find any stock to borrow.
Does this make sense?
Essentially, you take up as much of the borrow as you can when it is available in order to have increased flexibility in the future when it might not be available. As you mentioned, there is a slight cost to do this, but there always is a cost for increased flexibility.
what Lakewood is doing is not boxing their short.
Boxing a long/short is only done when you have a large gain that you are locking in but delaying the transaction until after a specific event/timeframe, usually for tax purposes. It also usually entails shorting / buying the exact same number of shares that you already own / are short.
Lakewood is doing neither of these, as OPK is clearly a much larger than .1% short for them (if it wasn't, why would they care?), and they only bought .1% long. Also, they are clearly in a loss position given that the stock is pretty much at 52-week highs, so they aren't locking in any gains.
In fact, you could argue that if they were boxing, it is foolish as it would imply that they are locking in LOSSES instead of covering before the end of the year to get a tax-loss carryforward.
---no position in OPK
I applaud your focus on rebutting RxR, however I am sure that you have realized it isn't worth the time and effort. RxR unfortunately doesn't seem to understand the english language and can't differentiate between "capability" and "expectations" vs. "doing now"
Well thats just confusing. Most likely the current Omni's on shelves have a different metal mesh, and the XSense will be phased in over time.