Get the Latest Investment Ideas Delivered Straight to Your Inbox.

TICKERS: ATOM

When Will the ATOM Bomb Launch?
Contributed Opinion

Source:

Daniel Carlson Investment advisor Daniel Carlson makes his case for why investors should have no fear of losing out on this technology company.

Atomera Inc. (ATOM:NASDAQ) is going to blow up. I mean this in a good way, not in the implosion sort of manner. ATOM is a ticking time bomb that is going to have a ballistic launch path sometime in the next year or two. I'm not sure when exactly this is going to happen, but this could be the biggest FOMO ownership stock I've ever seen.

FOMO stands for Fear of Missing Out. It is the reason why you a lot of investors own Atomera stock today. Because the timing on the next piece of big news for Atomera is incredibly uncertain. We are waiting for partnerships to be signed and revenues to follow. The wait has already been a couple of years and could be a couple more.

However, this is like a winning lottery ticket that will cash out sometime in the next two years. When it hits, every investor will have wished they owned it in advance as the stock will be off to the races with zero chance for investors to play catch up. Meanwhile, those of us with FOMO will be incredibly well positioned.

Which is why Atomera was able to land an investment of $6.7 million [earlier this week] at a premium to the market price. Let that sink in for a minute. . .investors paid above the recent trading range for the opportunity to invest a substantial amount into the company. It is very rare indeed for a company to raise money at a premium to the market. Obviously, some investors really wanted to own shares; they had major FOMO.

The investment was led by Transcend Partners. This is a family office with a strong history of being savvy tech investors. They have been early investors in several recent tech IPOs [initial public offerings]. They also do their homework and know, from my digging, when to get out. In this case, they wanted in.

And, why exactly do they want to own shares this badly? It all stems from the recent announcement of a major performance boost in Atomera's MST technology. With recent advances showing performance gains of up to 50%, Transcend, along with the rest of the market, is speculating that customers are going to get excited.

How ATOM is like RESN

In my meeting with the Atomera it became clear to me that there is a big similarity between these two tech companies. Both have disruptive technologies that increase performance and lower costs for manufacturers.

More importantly for investors, both have had similar issues in getting traction with customers. Each company has shown (until recently) performance gains and cost savings that are encouraging but not enough to get customers super excited. This is because the products were competing against internal design teams.

When you bring technology to a large company, like Broadcom or Samsung, you are going to compete head to head with internal design groups that feel like they can do exactly what you're doing without needing your help. Smaller, incremental gains will tend to be slow-rolled or ignored. The impetus for engaging an outside new technology just doesn't exist internally.

Unless, of course, the gains are remarkable. This is when the worm has turned and companies feel like notengaging would put them at a strategic disadvantage relative to their competition. For both ATOM and Resonant Inc. (NASDAQ:RESN), the recent technological advances they have announced appear to be just what the doctor ordered. Customers now have to move forward aggressively, or find themselves left behind.

ATOM is still a waiting game, however. . .

It has been five weeks since the breakthrough at Atomera and only four weeks since they started making customer calls on this. According to the Company, there has been an initial range of customer responses, from excited to "show me." This is where the problem lies in timing of Atomera.

Customers can get as excited as they want about the company's data, but they will still want to validate on their own silicon. This is, as we have learned, an iterative process that can take many design cycles.

However, the performance gains of 50% seen by Atomera are eye-popping. They blow away the 17% or so hurdles required for design changes and are definitely exciting enough to overcome any issues brought up by internal design teams who don't like "not built here."

This means that customers are going to start stepping up their testing of Atomera's MST technology. We should see this reflected in the near term by an increase in engineering services; payments for testing wafers. I suspect this is going to start ramping in June, from $0 in Q1. In the intermediate term, investors should look for more licenses being signed in 2019. The company provides no guidance on this, however body language and the language around customer interactions post the breakthrough suggest to me that we are likely to get some this year.

Longer term, we are still about two years away from significant revenues. We also happen to be about two years away from the company needing any more capital, thanks to the investment announcement. Basically, we could have seen the last financing from Atomera in the public markets. In which case, as they start to gain more traction, those who suffered FOMO and jumped in recently will be well rewarded as others chase the stock higher.

Daniel Carlson is the founder and managing member of Tailwinds Research Group and its parent company DFC Advisory Services, which is a licensed registered investment advisor (CRD # 297209). Tailwinds is a microcap focused research company that provides research on and consults to over 20 emerging growth companies in the technology and life sciences arenas. DFC Advisory Services is an RIA that manages money dedicated to investing in the companies covered by Tailwinds. For more information on these two companies and their track record, please see www.tailwindsresearch.com. Prior to founding these two entities, Dan spent many years working with small public companies, having been CFO of two public companies and helping finance many others. A 1989 graduate from Tufts University with a degree in Economics, Danís formative years in business were spent as an equity trader, first on the Pacific Coast Stock Exchange then on the buyside at several multi-billion dollar firms.

This article was submitted by Tailwinds Research. For more information on Tailwinds Research or on Atomera, please visit www.tailwindsresearch.com.

Tailwinds owns stock in Atomera. For a complete list of disclosures, please click here.

[NLINSERT]

Disclosure:
1) Daniel Carlson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Atomera. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies referred to in this article: None. Additional disclosures and disclaimers are above. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.




Want to read more about Technology investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe