Opinions
Michael Smedley
Edgewater Wireless Systems Inc
YFI-X
COMMENT
Jan 18, 2018
Stock price when the opinion was issued
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Have hardware based around a proprietary chip set, which basically uses a 3 channel methodology for very fast Wi-Fi. Technology is very good but they have to get somebody to buy them. Emerging markets are buying these products because it is very expensive to build out a formal network. At the moment we have not seen large contracts with North American carriers. Have gone through a bunch of reorganizations. Very speculative. He would guess that in 3-6 months as to whether they have significant contracts.
A pretty interesting company. Making the Wi-Fi more efficient for things likes theatres and stadiums. Stock is up about 180% this year, but the company is still pre-revenue, and he is not a huge fan of companies that are not producing revenue. He would prefer that they prove their business, get the contracts and start translating that into income for the company. They just did a $2.5 million equity raise which might last them 1-2 years. He would wait to see some revenue come in before getting too interested.
Think about Wi-Fi which gives you a lot of trouble. It is getting crowded out because they have a channel approach that is forcing information down into a very narrow tunnel. This company has created a kind of side channel, where you have greater capacity. It is useful, as an example, at a ball game where you currently can’t get through Wi-Fi.
He would hope this will be a global breakthrough. The basic processes involved are dealing with Wi-Fi as it goes into the destruct phase because of too much crowding. This company has created a diversionary stream of traffic. It is looking more interesting.