I would guess almost 99% of all investments I have ever made have had some angst. Very few did not have ups and downs along the way. Even when lucky enough to buy towards the bottom no stock moves straight up. All stocks are affected by the general market sentiment and any news can be blown way out of proportion. Which brings us back to the question I get over and over whether its this stock or others that don’t go straight up. What do you do when your stocks go down? Well the first thing you can do is do a check on your investment. Are the reasons you bought it still intact? Has something changed that changes your outlook on the companies future? Has the world changed that makes them less valuable going forward? If you had infinite amount of money to invest would it be here or somewhere else?
So before we go through those questions let’s review the week of trading in Atomera.
Monday: Someone sold off a large chunk of shares. Maybe as many as 500k. In retrospect I think they heard about the insider selling that was coming and sold out a large position. Obviously no insider because if they had waited for the Phase 4 announcement on Tuesday they would have received at least 25% more.
Tuesday: Announcement that Phase 4 of the Technology Transfer and equipment installation completed early and company would get first payment of $400k in Q1. Besides a second JDA announcement this is about as good as it gets. Installation in a multi-billion fab is a huge accomplishment. Next for the fab is to move to Phase 5 and then Phase 6 production and royalties for Atomera. My guess is this will happen as quick as possible as you don’t keep a huge fab offline any longer than you have to. The fab has invested $60m just to upgrade their fab and tens of millions more just to get to this point. Its a true inflection point for Atomera.
Wednesday: Form 4 notifications that for the first time in the 5 years since the stock options program was initiated the insiders were going to be allowed to sell some shares. While in the olden days insiders selling was seen as an indication that something was wrong with a company that just is not the case here. Perfect example of founder Robert Mears. The man has spent 20 years getting to this point. More than likely the stock he owns is part of his retirement plan. He sold 27K shares. People working for small startups are usually highly tied to how well the company does in terms of how they do financially. They don’t have huge pension plans or large 401ks. They shouldn’t be expected to hold their shares forever. Bottom line they are also large investors in the company and deserve to benefit from the improving stock price. How many investors here would be happy saying I’m investing here and no matter what the stock does hold on to my shares forever? My guess is more than 75% of the people reading this have never held a stock position longer than 2 years and 99% never longer than 5 years.
So back to the original questions. Are the reasons I bought still intact? Yes. The companies progress towards large royalties is ontrack and I believe this is just the first of many announcements that will continue coming their way in 2021. I expect at least two other of the companies that have licenses will be in Phase 5 or 6 in 2021.
Has something changed that changes the outlook for the company? In some ways yes. They company completed early the first installation with their first JDA customer. A JDA customer is unique in that they do not have to go through Phase 4 again with other nodes being upgraded. They will go directly to Phase 5 on future nodes being modified. There is a reason the company keeps talking about multiple nodes and productlines for their JDA customers. I suspect in 2022 just this first JDA customer will have at least 3 nodes producing parts with MST technology inside.
Has the macro world environment changed and made semiconductors a poor investment place? No. In fact while the Total Addrssable Market is roughly $450b this year I suspect that will be well over $600b by 2025. So not only is Atomera a huge disruptor into the semiconductor market the space itself will continue to see huge growth. Bottom line everything in the world depends on semiconductors and that only continues to grow.
Finally one test I always use with investments is if I didn’t own the stock today would I be a buyer at current price? To determine that I look at the risk/reward and what do I think the stock can be worth by year end. With my target of $100 by year end this still looks like a low price and the biggest risk is what the general nasdaq does with high tech going forward. While tech has fallen out of mainstream favor at the moment its always going to be a big part of the future which means sentiment will swing back around.
So what do I tell people who ask me how to handle huge stock swings? Ask yourself if your a 9 minute investor or a 9 month investor. Are you looking at the waves or the horizon? I guarantee looking at the waves makes us all a bit seasick in rough waters.
Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.