RE:RE:RE:RE:RE:A Small Shareholder AgainI think it will be more than your confidence that will be “tapped out” if the company doesn’t turn the corner over first half 2019!!
Probably looking at a couple of possible scenarios IMO:
1.(My favorite scenario and what I feel or hope will be most likely based on the recent 411 the CEO provided us with)
Okay, we establish a base revenue stream in the VR/AR - Console segment (Sony please) which for 2019 Would/could be $6-$8 million in revenue at 50% minimum gross profit! (2018 is $3 million for the first 3 quarters reported combined revenue HDMI, VR and small amount DC sales)
Remember, Raouf stated the console company would provide revenue equivalent to all their VR/AR combined. That’s the $6 million I used as a low side estimate for 2019 segment in VR)
Design Wins in the Data Center pipeline continue converting into Design In’s at various stages throughout the year resulting in a minimum of $8-10 million in operating revenues.
I think we are told the company has 35-36 Design wins at various stages of development, and with just a 40% conversion rate on these newly to be constructed units (40 buildings x 100,000 server x 2 interconnects per server) you have a potential reach chip set sales in the millions.
Raouf states the company doesn’t require equipment to ramp up sales as they are a fabless entity and sub contract out their chip production , so no major increase in overhead should occur! (This is great)
If they can turn in combined revenue in the $12-15 million range then they are covering their overhead as currently structured and should command a much higher valuation based on current and future revenue guidance!
If this scenario plays out something pretty close to these guesstimates and their technology continues to be superior for the foreseeable future in both segments of their product line, then I believe it could be possible for the company to see an exit strategy in the form of a buyout!
If they were to get taken out for about $200 million, that’s roughly 10x their current market cap, maybe 10-15 x annual revenue and I gotta believe most here would be pretty happy !!
Scenario 2
The company continues to push further out revenue ramp dates for reasons beyond their control, resulting in additional infusion of funds and further dilution.
I don’t like to dwell too much on the negative side of things as most here have already taken a pretty good beating.
There is a great deal of risk associated with micro cap companies, especially technology based due to the inherent risk of their technology becoming obsolete by the next greatest thing!
On a positive closing note, for the company to be standing on the door step of these Hulk sized Data Center players and have a pretty good shot at their product being utilized in a volume capacity is in itself a pretty amazing accomplishment!
We just need the Hulk to cave in the front doors of these Data center operators and sell them millions of these cutting edge chips designed by Super Spectra!!
(Okay , if not the Hulk how about Molex, Foxconn, Zhaolong, and a multitude of other Hulk sized company’s supporting Spectra’s vision and product line)
All this stuff was just my opinion on a Friday before Christmas!,,,
PS
Merry Christmas and don’t forget to include your Christmas wish to the Old Guy in the Red Suit to grant S7 a successful 2019 and beyond!