POET: A Technical Play with Fundamental Risks
The recent announcement of POET Technologies, Inc.'s ( 
POET) collaboration with Mitsubishi Electric on September 19, 2024, suggests greater upside potential for the company. Given the current trend, the stock could reach $6-7 per share by year-end.
Over the past year, the stock has risen 56%, with a 377% increase year-to-date. Despite this strong performance, there are several risks to consider:
• Negative net income (the company has not been profitable)
• Frequent stock-based compensation (a 39% increase in shares outstanding since 2020)
• Negative operating cash flow
• Regulatory risks related to business operations in China
While there is potential for substantial price growth, it does come with risks. I think starting with a small position and monitoring the technical and fundamental developments is the best way to play this opportunity.
POET) collaboration with Mitsubishi Electric on September 19, 2024, suggests greater upside potential for the company. Given the current trend, the stock could reach $6-7 per share by year-end.Over the past year, the stock has risen 56%, with a 377% increase year-to-date. Despite this strong performance, there are several risks to consider:
• Negative net income (the company has not been profitable)
• Frequent stock-based compensation (a 39% increase in shares outstanding since 2020)
• Negative operating cash flow
• Regulatory risks related to business operations in China
While there is potential for substantial price growth, it does come with risks. I think starting with a small position and monitoring the technical and fundamental developments is the best way to play this opportunity.
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