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Friday, January 12, 2018

Quick Summary: Energous's Week at CES

Even I'm getting tired of writing about Energous, but it's just been a very hectic last couple of weeks with their FCC approval and demoing their tech (to a select few) at CES. While most of the original commentary I can give relates to the technology and the rather woeful press coverage of it, there were a few other events to track.

Energous announced a pre-order of the first products to use 'WattUp' charging, and it did help boost the stock price for a little while. What was this amazing product? Underwear. With fitness trackers. For $400 in a 4-pack. Yes, really. The stock buying public was clearly wowed about the at-distance wireless charging, though in the end it turned out that the fitness tracker needs removed from the underwear and placed on the Near Field charging device (comes with the 4-pack) that is incompatible with the at-distance charging. And it's a pre-order, not actual availability, so it's a little disappointing really...

Energous then released the 8K for their 2017 4th quarter, basically their financial report. It was a bit weak with only $30,000 of revenue from "engineering services" (consulting) - which to put in perspective is what most engineers with moderate experience can charge for their individual services, not what you'd expect from a company with a market cap of $500 million. Their burn rate is around $11.5 million per quarter, and they had around $12.8 million in the bank at the end of 2017. Not a healthy financial picture, especially when you read that they admit that their revenues in 2018 will be 'modest' despite claims both Near-Field and Mid-Range products will be available in 2018. Seems weird, don't they expect anyone to buy their products?

This was a pretty poor performance, and the stock price reacted accordingly. It makes it all the more concerning that the insiders sold their stock only a few days prior to the 8K. The executives must have known this was coming, and the SEC usually frowns on sales under these conditions.

Raising money?
In order to keep going, Energous is selling shares in the company, up to $40 million worth. This sale will dilute existing share holders - like the ones who bought on hearing the FCC announcement a couple of weeks ago. With what the company has in the bank, and their current burn rate, that will do them until February 2019 - though given they say that they don't expect significant revenues before then, I'm not sure what they do at that point.

On Thursday it was also announced that Michael Leabman, Founder and CTO, would be leaving his role effective immediately. This was a bizarre announcement, as it's very unusual for this to happen at such a time. Why leave after a great success like the FCC approval, and during the best 'publicity week' of the year? Unlike the usual Energous PR, there wasn't the media friendly PR packet waiting with the "having achieved his goal of at-distance wireless charging, Michael now wants to spend more time with his family" style blurb. It was several hours before that appeared, and the sudden departure, rather than a transition to his contractor role, was odd. We don't have enough information to know and draw an accurate conclusion, but it was very strange.

The CEO gave an interview with Barron's, which also raised some eyebrows. Unfortunately for most of you, it's behind a paywall, but I'll summarize (and I'll encourage you to pay, Tiernan Ray seems to have done the best of the mainstream press covering Energous).
  • We exaggerated in the past and got things wrong, but trust us moving forward
  • What was I supposed to do, the press want to hear something
  • Still claiming smartphone charging at 15 to 18 feet in 2019, though says "one to two watts or 100s of milliwatts" - nicely hedged there.
  • Apple suck because they can't deliver Qi charging mats
  • Qi sucks because it knocks out Bluetooth
  • Still being mysterious about their "tier one" partner and playing that game

Most of it was what I'd expect, but taking a shot at Apple is pretty surprising. I guess they won't be working with them anytime soon!

Despite the glorious week of CES, the stock price took a tumble, from a high of around $26 to a low of around $20. This is a volatile stock and will bounce around for a while, but that's quite a fall from the $33 only two weeks ago. Let's see where it goes this week, and if there's going to be a hangover for some people.

That's it, have a great week everyone.

Final Note: I actually posted this on the night of Sunday 14th, but dated it the 12th to keep it underneath the Tech journalism post, in case you notice. And now the apparently obligatory notice - I have no stock position on Energous, I'm not being paid to write this.

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