May 18, 2017 - VXS Takeover Announced (1mth 90% Gain for Subscribers)
ViXS Systems (TSX: VXS 22 cents)
This is my second takeover in just over a week.
A great gain... but a valuation I am not the least bit happy with.
Pixelworks is offering only USD $20M
and it appears VXS management are happy with this - they must have golden parachutes built into the deal ! Techs of this size should be valued at 1 to 2 times annual revenue. So this offer appears close to 1 times their revenue over the next year. Seems low, but reasonable.
However, in ALL the ViXS corporate presentations, they have emphasized their HUGE patent portfolio and the fact it is independently valued at (an estimated) USD $50M to $80M
So are they just GIVING the patent portfolio away ?? If this deal is allowed to go through under the current terms, then ViXS shareholders are NOT getting fair value for their investment.I personally have no intention of selling as I will hold out for a renegotiated deal OR a competing offer.
May 10, 2017
ViXS Systems (TSX: VXS 21 cents)
Shares Outstanding: 73M / Market Cap: $15M
Estimated Revenue for the Upcoming
Year $20 to $30 Million *
Revenue for the year ending Jan
31/17: $29.5 Million
(Unrecognized) Patent Portfolio [>500] potentially worth $50 to $100M
Strong growth potential in UHD / HDR
TV and Internet Video
Toronto HQ / Hong Kong R&D /
Sales in Asia, Europe, N. America / > 85% of employees are engineers
* April 12th it was
announced that VXS would sell a high cost, non-core division for $5M USD
Note that the Graphics below were
taken from their Jan/17 Corporate Presentation
“Current infrastructure is built on 20 year old technology that is not
optimized to handle today’s video traffic”
The ViXS market cap is
only $15M yet there are two specific factors
that should make this a very strong speculation from 17 to 20 cents (excellent
liquidity lately in the 18 to 20 cent range).
1) They specialize in technology for Internet Video and displays
needing 4K UHD and HDR. These are notable areas of strong growth in the coming
2) Most important - and
incredibly overlooked - is their enormous patent portfolio. They own more
than 500 Patents (40% approved and 60% pending). This should be extremely
valuable. Possibly in the range of $50M to $100 million or 70 cents to $1.50
per share. The market is completely
overlooking this value.
April 17, 2017
Revive Therapeutics (TSXV: RVV 25 cents) (OTCQB:
I am preparing a research report on Revive for late April but in the interim I am providing the comparables as this is where the valuation potential
I determined that it was best to break Revive down
into two distinct markets / valuations.
(1) Traditional Medicine / Drug Pipeline and (2)
(1a) I narrowed this division down to 17
comparables (microcap only - CDN or US listed). Valuations range from $12M to
(2a) In Cannabis sciences there are only 14
"Pure" North American public companies in this space. By this I mean
life sciences companies (not growers with a research division) focused on drug
research and development using the Cannabinoid compounds in the marijuana plant
(the medical benefit vs the high). Valuations range from $11M to $3.5 Billion.
Realistically we can take the minimum valuation
from each = $12M + $11M and assume minimum fair value should be CDN $23M or 43
cents per share.
You will likely see where a strong case can be
made for saying fair value should be closer to $30M to $40M or 60 to 80 cents
Most the Cannabinoid Science companies are being
valued at $50M to several hundred million - which makes no sense to me when
they have no revenue, but that seems to be the nature of the sector right now.
I will show all the comparables but we cannot use
those sky-high valuations as they make no sense to me. What DOES make sense
however, is that this stock (at least from a comparables perspective), is
Realistically I think RVV should be worth 40 to 80
cents - in its current state.
A few of the valuations are so ridiculous that
they shouldn't be allowed to trade (no revenue, horrible balance sheets - and yet
market caps worth several hundred million dollars). But I still need to use
them as comps because they exist in a sector with limited competition (it is an
industry that could produce significant future value).
Revive’s (more traditional) trial drugs for kidney
stones and gout could also be quite valuable, but it is the Cannabinoid Science
that will likely have more "sex appeal" this year.
Worth Noting: I spent a LOT of hours searching for
comparables using a variety of search term phrases / keywords specific to
Cannabinoid science, research, etc. - these were also filtered using certain
terms that would only show up in a press release of a public company. This
larger list was then filtered down again to meet specific criteria.
What I found fascinating was that there wasn't a
single large biotech or pharmaceutical company that appeared in the top-level
search. This means they are either (1) not doing research in this field because
marijuana is Federally illegal in the United States, or (2) they are conducting
research but afraid to discuss it publicly.
If notable Cannabinoid discoveries are made by
small companies like Revive, they will attract the attention of majors (similar
to the way large mining companies have bought out junior exploration companies).
Revive Corporate Presentation:
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