Louis Basenese has reportedly given up his newsletters and returned to Wall Street, he told his subscribers back in September that he was leaving to head up what sounds like a new investment bank for microcap stocks… but his Trend Trader Daily free newsletter still exists, as does the entry-level Digital Fortunes newsletter that he has been heading for years, it’s just that he found a new pundit to take over.

And who could it be? Well, it’s an old familiar name — Michael Robinson is now the lead, we’ve covered him for years as he pitched mostly speculative biotech and technology story stocks. His latest services were the Nexus-9 report and Nova-X, both published by Money Map Press for about five years until they got the axe about a year ago, and before that he headlined similar technology-focused letters for various other Agora-affiliated publishers (I think Trend Trader Daily is independent these days, it looks like they’re a one-man shop still, just a different man, but they certainly cross-market with the old Agora world, including what are now the MarketWise publishing brands). He was also pretty big in pitching cannabis ideas for a while, too, as part of the failed National Institute of Cannabis Investors (another Money Map imprint that was scrapped last year). He now calls himself the “Chief Technologist” at Digital Fortunes (being sold at $149/yr)… and the ads haven’t missed a beat since Lou Basenese’s days.

So what’s Robinson been pitching for Digital Fortunes in his first few months? The pitch that readers have been asking about is an ad that says “Apple will kill the iPhone on January 25” … and it sounds a little familiar. Here’s a little taste:

“Kill the iPhone, you say?

“Few companies have the guts to kill an iconic… admired… refined… brilliantly conceived… historically significant… multibillion-dollar business… ON PURPOSE….

“See, by strategically killing, say… an aging business model… a declining product… an outdated design… a tired brand… a fading trend… Sears, Dell, Blockbuster, America Online, Kodak, MySpace, and Yahoo could’ve stayed perched atop their kingdoms.

“It’s called ‘creative destruction.’

“If you’re an investor, I urge you to pay close attention.

“Because in the weeks ahead, Apple could do what Sears, Dell, Blockbuster and the others failed to do — if all goes as expected…

“Apple will commit the single greatest act of creative destruction ever…

“I believe Apple is planning to kill its iPhone, ON PURPOSE.”

What’s the story? This is, in fact, simply a repackaging of an older ad that Lou Basenese has been running for close to two years now. Last summer, when I last checked in on this pitch, he touted what he was (and still is) calling “Holo-Core” technology… and pitching the idea that Apple would kill the iPhone with its new product announcement on July 28. Now, what we have is mostly just the same text, with a new date… as Robinson puts it:

“The ‘smart money’ is already moving ahead of Apple’s earnings call on January 25.

“Armed with my latest research report, when Tim Cook takes the stage on January 25, you’ll be way ahead too.”

Well, it turns out Tim Cook won’t “take the stage” today — Apple’s quarterly earnings update and conference call aren’t happening today, Robinson is about a week off. The next results from Apple will come next week, on February 2.

Will Tim Cook be announcing the death knell of the iPhone next week?

Um, no. What Robinson (and before him Basenese) is pitching here is essentially an “augmented reality” device from Apple, and he thinks that will eventually take the place of the iPhone as Apple’s most important product.

Here’s a little more from the ad, just to give you the context as we double-check to make sure he’s still teasing the same little stock:

“I’ll reveal the best stock to own as Apple prepares to kill its iPhone. I expect a single share to go a long… long… long way… because it accomplishes something truly powerful…

“It grants you ownership in a company, but not just any company…

“I’m talking about ownership in a thriving company… a company radically expanding its customer base… a company hiring the best talent… a company on the leading edge of a revolution… a company growing profits every quarter… a company with 10-bagger potential… like I just said, a company exactly like Apple in 1980!”

OK, that’s a nice passel o’ hype, but not many clues… does he drop any hints for the Thinkolator?

“It’s a tiny company making an indispensable part for the iPhone Killer.”

OK… what else?

We get a bit about a secret meeting Apple had about “killing” the iPhone…

“Apple called a ‘secret’ meeting at its Cupertino headquarters.

“A meeting that filled its on-campus, 1,000-seat, Steve Jobs Theatre to capacity…..

“Code-named ‘N421,’ credible sources believe the device’s highest purpose is…

“To kill the iPhone.”

That was an internal meeting back in 2019, reported by The Information and then re-reported by lots of others as the rumors spread, and all indications are that it was the first big internal meeting about their planned Virtual Reality headset, which at the time was expected to come as early as 2022 if they got it right, and the possibly more important AR Glasses/Googles, which most people didn’t think would be ready for launch until 2023 at the very earliest.

Even back in 2021, when this pitch started circulating, odds were pretty good, said Bloomberg, that anything introduced in 2021 or 2022 would be a high-end virtual reality device that’s mostly a placeholder to allow software developers to create products and some early adopters to build interest (and, of course, since this is Apple the timeline could easily shift, and the product could be scrapped if it’s not good enough or not ready to wear the Apple logo). But almost all of the reporting was then, and still is, based on rumors and decisions not yet made, so who knows.

There was, for a brief while last fall, still some lingering hope among Apple fans that the first high-end AR/VR headset could see a limited release this month, but the company has been hitting technological hurdles for years with that product and hasn’t gotten it right yet. The best reporting now indicates that there will be a mixed-reality headset release perhaps this Spring, something that looks a lot like the current crop of virtual reality headsets (like a snazzier version of Meta’s Oculus), but has much more augmented reality capabilities, including external cameras, and costs probably 5-10X as much…. but the lightweight wearable product that you could conceivably use in the real world, some kind of updated interpretation of the old “Google Glass” product that was a flop a decade ago, is probably still a couple years behind that. If you want to catch up, I recommend this Bloomberg article from a couple weeks ago, and the sum-up of the story from MacRumors here.

So this seems likely to begin as a very expensive, niche product at first, and it’s obviously an Apple priority… but so, too, were big Apple R&D projects like the Apple TV and the Apple Car over the past 15 years. Sometimes it takes a long time to get to commercial release… sometimes the product never measures up, and never sees the light of day.

Back to the ad:

“I expect Apple to be wildly successful in its creative destruction of the iPhone…

“And I also believe that ‘N421’ will replace it…

“Owning a few shares of Apple is both worthwhile and prudent.

“Yet Apple is only the tip of the spear.

“See, whenever a creatively destructive act is occurring — like Amazon replacing malls… Priceline replacing travel agencies… Wal-Mart replacing mom-and-pop shops… Home Depot replacing lumber yards… Uber replacing taxis… drones replacing tanks… or GPS replacing maps…

“The destruction has so much raw power….

“It tends to push every company in the industry to new highs… especially the smallest firms.”

So that’s what we’re being pitched here, some smaller company that has something to do with providing components or technology to Apple (and others) for AR/VR projects.

More from the ad:

“I call it ‘Holo-Core’ technology… because it a) gives users a fully immersive, 3-D, hologram-like experience, and b) Tim Cook referred to the technology as ‘core’ to Apple’s future back in 2016.

“To be clear, Holo-Core isn’t a standalone device.

“It’s one of iPhone Killer’s seven main parts… yet it’s also iPhone’s Killer’s only irreplaceable part… and thereby it’s iPhone Killer’s most important part.”

And then we get some hints about the company itself, and, of course, a reminder that even if Apple isn’t first, the technology is likely to keep moving foward:

“… even if Samsung… or LG… or Huawei… or whoever else… releases their own versions of an iPhone Killer,

“THEY’LL ALL require a ‘Holo-Core’ component to function properly….

“… the global leader in ‘Holo-Core’ technology — an absolutely essential component to every iPhone Killer — is a small company based in upstate New York.

“How small?

“Well, the company currently trades on the Nasdaq for 0.10% the size of Apple!… small enough that a single share of stock could change your life….

I believe Apple is prepared to make an offer to buy this little company, thus eliminating it as a potential competitor… and gaining all of its ‘Holo-Core’ intellectual property in the process. In my buyout scenario, Apple could offer over $100 per share.

What else? Basenese says that he thinks “this little company’s technology is roughly three years ahead of Samsung’s… and two years ahead of Apple’s… and it’s protected by over 180 patents.”

So… does that still match up?

Indeed it does, this is essentially the same teaser pitch we’ve been seeing since 2021, with Michael Robinson’s name just pasted over Lou Basenese’s.

The Thinkolator’s best answer remains… Vuzix (VUZI), which makes smart glasses and components, and is sometimes rumored to be selling components for larger “smart glasses” projects, like those underway at Apple or Google.

This stock has been teased many times over the years, going all the way back to the early “Google Glass” days when it was really a “penny stock” (I think the market cap was well under $100 million the first time I wrote about them, close to a decade ago), and they are the only real standalone company with an established product line of augmented reality glasses. They’re also still tiny, with a market cap around $300 million, and have never been able to really get off the ground.

This is one of those stories that always seemed like it should have a chance of taking off… but they’ve never made it. Which probably tells us all we need to know about how critical their technology and designs are to this still-unrealized dream of an augmented reality future. They got up to about $12 million in annual revenue way back in 2008, and lost about $5 million that year… then the business was in slow decline for a long time, they sold a ton of shares along the way, and over the past four quarters they’ve gotten back to that level, about $12 million in annual revenue, but they’re now losing $40 million a year. The accumulated losses now stand at about $233 million.

It’s not just that he’s adopting all of Lou Basenese’s old ideas, to be clear — Michael Robinson has teased this one before, too, even when he wasn’t with Digital Fortunes, Vuzix was touted in “Metaverse” themed ads for his Nova-X report back in December of 2021, he pitched the military side of Vuzix…

“… we have a small-cap company with less than a $1 billion market cap that is trading at around $7.

“It is now flying under the radar of big Wall Street investors, but I believe that won’t be the case for long…

“This company is on the cutting edge of making mind-boggling tech solutions for military, enterprise, industrial, medical, and everyday consumers.

“Its portfolio includes augmented reality, virtual reality, and mixed-reality systems.

“It’s so advanced that one of its biggest clients is the Department of Defense of the United States.

“Recently, this tiny company got a contract to provide eyepieces for a special program in the military to locate and accurately engage targets with precision-guided munitions.”

There have been lots of other augmented reality/headset products developed over the years, from companies big and small, and next-wave AR glasses from Google and Apple and many others continue to be featured as future ideas or concepts, but most of the augmented reality glasses I’ve seen make their debut in the marketplace over the past decade have been abandoned, from the Kopin Solos to Google Glass. Nobody has come up with a product that’s good enough to have broad consumer appeal, so they’re mostly used, so far, in niche applications. (There are still plenty of attempts out there that you can buy, last time I checked that included the Epson Moverio, Lenovo ThinkReality, and Everysight Raptor glasses in addition to Vuzix’s products, along with higher-end AR projects like Microsoft’s Hololens and the Magic Leap goggles, and there are “smart glasses” that don’t have actual augmented reality or displays in them, like the Meta/Rayban collaboration or the glasses from Snap, which combine audio controls and cameras but no display yet so no real AR capability, but nothing has really taken off yet… perhaps we’re all waiting around for Apple to tell us what we want.)

I’ve been pretty skeptical about this one for a long time. I don’t think VUZI will make enough progress as a small, independent hardware company, but it’s certainly possible that Google or Apple (or Intel, which invested in Vuzix many years ago) could buy more control of the category or clean up possible patent challenges by purchasing VUZI — it would certainly be cheaper to do so now than back when Basenese was first pitching this same idea in mid-2021 (the stock was around $12 then, on its way down from the meme stock mania period of early 2021, today it’s back to the $5 level where it has spent most of the past decade).

The fact that no larger player has acquired this company, and that VUZI has been selling smart glasses mostly for industrial applications for years without showing any sign that this is a viable business, is an indicator for me that Apple and Alphabet and Samsung don’t see VUZI as a threat or an innovator or an owner of patents that will slow the development of their own products. Even if Vuzi now has 180 patents, up from probably 40-50 when it was first being pitched as a microcap idea back in the old Google Glass days.

That doesn’t mean the company is standing still, or is worthless — I’m just skeptical that they’ll explode as a major player. It’s entirely possible that the stock will go on a “story” run when the next wave of AR/VR products from Apple or whoever else hits the market, it’s a small “pure play” company in a space where there aren’t many obvious public competitors, so it often draws investor attention… it’s just hard to see the real operating business growing into something meaningful.

The company does sell products, which is how they got to the current ~$12 million or so in revenue — and they are happy to announce when they make a sale, like their press release that a “Fortune 50 global retailer” had bought some of its smart glasses, though the size of the order wasn’t disclosed (they’re using them for warehousing and logistics — presumably that means using smart glasses to help workers find stuff in the warehouse, etc.), and they also are pushing for use in industrial cases, including by telecom company workers and healthcare workers. It makes sense as a training and support tool in a lot of businesses… but that’s been true for a decade, and the sales just haven’t really picked up.

Vuzix has also said that they’re expecting more OEM orders, which would mean orders for Vuzix parts that go into products manufactured by other companies — that has mostly been from the defense industry in the past, but they also see consumer electronics companies ordering more from them. It’s that OEM business that seems likely to be the source of any profitable growth they might have, as they’ve scaled up their manufacturing capacity for parts and display technology in this area, so who knows, perhaps a big customer will come along and shake things up. That’s been the real hope for Vuzix over the past year, but those orders have not materialized yet.

Like I said, I remain pretty skeptical. They are not in danger of running out of money in the near future, mostly because they sold $90 million worth of shares last year, so they can certainly remain a niche player and might get some investor attention again in the future, but it’s been a slow slog and that might continue — not unlike the struggles that other small component makers have had despite their connection to the possible growth in AR/VR technology and many pitches by newsletters over the years (Kopin (KOPN) and HiMax (HIMX) come to mind there as past “Apple will buy this” pitches for AR headset tech, both long-term disappointments so far… though HIMX is at least profitable).

There are still a couple analysts who cover this small cap stock, and they expect $12.5 million in sales this year and $18.5 million next year (down from expectations of $14.5 and $21.8 million six months ago). That would be a new record if they hit it in 2023… but still, not nearly enough to achieve profitability. Given their current gross margins and overhead, they would probably need annual revenue of roughly $200-250 million to break through to profitability at this point — and the fact that they’ve only had total revenue of about $50 million for the past ten years combined is really where my skepticism finds some traction.

The story remains a little bit appealing, particularly if their shift to making products for other manufacturers generates something big and surprising, but the company has been around for 25 years now, without much progress being evident in their income statement yet, and it’s still carrying a very elevated valuation at about 25X revenues, so I’d need more than a story to get interested.

Vuzix has sometimes been a fan favorite among Gumshoe readers, and we’ve covered it quite a few times — so perhaps some of you see more hope than I do on the horizon. If so, feel free to try to talk me into buying VUZI… are they at some tipping point that we don’t yet appreciate? Is their technology unique enough to lead after a decade of selling niche products? Think there will actually be an Apple connection? Let us know with a comment below.

P.S. Robinson’s tease also included a few “special reports” that readers ask about pretty regularly — so I can also tell you that “The Secret $5 Company Behind Elon Musk’s Race to Own the Internet” is almost certainly still Gilat (GILT), a stock he has pitched several times over the past couple years. Sometimes it’s been a $5 stock, sometimes a $15 stock, but it’s still the same company… these days, it’s back at $5 — they sell satellite antenna hardware and provide some satellite broadband services, they’re small and currently unprofitable and have no deal with Elon Musk’s Starlink, which he seems to busy to be worrying about much these days anyway… and, well, knowing about that stock hasn’t done anyone any favors over the past few years. Hope springs eternal.

Disclosure: Of the stocks mentioned above, I own shares of Amazon and Google parent Alphabet. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.