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Friday, September 16, 2016

A Whole Lot of Nothing

Energous had a rally in their stock recently, having reached around $18 from only $14 a day or so ago. What happened to cause this rally? Perhaps a product release? A deal announced with a major customer? A licencing deal on their technology? Something to show a product or revenue?

No. Someone read a two year old prospectus and jumped to the conclusion that a deal with Apple existed because the word "Apple" was in the document somewhere. And based on that, the stock rallies from $14 to $18 in 2 days. Here's the wording, image taken from the VentureBeat article:

Let me translate - they expect (but don't confirm) that their products will go through a variety of tests (Apple compliance being one of them), and that this list of tests may change. That's it. Nothing more. Nothing about a deal. Reading anything more into this is just putting your own biases and hopes into it.

I've watched from inside a startup as the tech media made rampant speculation about what we were doing, the technology we had - it was based on nothing, with ridiculous expectations, but it benefited the company for this to continue so why dissuade them of their opinion?

Energous are a publicly traded company, the SEC can get upset if they mislead or leak information, resulting in criminal charges. I expect everything they say to be 100% factual but worded in a way that lets you draw other conclusions if you are so inclined. I've talked about how you can word a press release to make it sound like so much more has happened than actually has.

Take a look at the stock price for WATT (Energous) over the last 3 months. Notice the rises then large drops, such as the $12 to $20 rise from July? That's the rise before Apple events, then the fall at 2pm on the day the Tim Cook doesn't announce Energous wireless charging in iPhones. Expect that to keep happening, someone is making a lot of money on this volatility. 

This is a non-story. The real story is the genius of the Energous team - either the genius in making RF wireless charging possible, or genius in how to earn millions in developing a product that can likely never actually work or get regulatory approval all while never actually lying and staying legal within SEC rules. I know which of those two I think it is.

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