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What’s Basenese’s “Hands Down, Perfect” $2 Stock for 5G?

Checking out the latest teaser pitch for Lou Basenese's Trend Trader

I haven’t written about a Lou Basenese teaser pitch for a while, so a few reader questions about his latest “perfect 5G stock” teaser sent me down the road we’ll travel today. The ad I’m looking at is for Baseneses’ Trend Trader newsletter ($149/yr), and he has worked with a variety of publishers over the past decade or so but now appears to be published by Crowdability.

Here’s a little taste of the hype in the ad:

“It trades for just $2 per share… its ‘gatekeeper’ technology holds hostage the entire $12 Trillion 5G revolution… it just secured a CRITICAL 5G patent…

… and by October 1st, my research says a major smartphone player could buy out this tiny company and hand us a FAST FORTUNE!”

The ad has the typical long spiel about how 5G will be groundbreaking, changing the world in unimaginable ways as remote surgery and self-driving cars and other cool stuff become mainstream over these higher-speed wireless connections, but we’ve heard that a thousand times now so we’ll just skip to the bit about this “perfect $2 stock” … which, we’re told, is “perfect” mostly because it’s small, unknown, and has a patent on a technology that everyone will need… which means the royalties should be rolling in soon (or, as Basenese says, perhaps they’ll be taken over to get control of that technology).

The patent is from November, and he blacks out some of the key information (like the patent applicant, the inventors, and the patent number), but there’s still plenty of info to confirm the company — which means we can be a little quicker than usual today. Here’s one more bit of hype:

“Although you’re not seeing ANY news coverage on this, just days ago this tiny company locked up the world’s most valuable 5G patent….

“Which makes it 100% legally binding that this company gets PAID for anyone wanting to access its 5G breakthrough…..

“Now that this patent is locked up, it means all the big 5G players have NO CHOICE but to pay this tiny firm a royalty for its device.

“We’re talking about legally forcing any of the telecomm giants like Verizon, AT&T, Sprint T-Mobile….

“And ANY smartphone manufacturer like Apple or LG that wants The PERFECT 5G stock’s technology….

“To pay this tiny company.”

That’s a shortened version of the pitch, to be fair — he included lots of “what if” language in there, perhaps to assuage his lawyers so he can claim this is just a hypothetical, but that’s the basic idea… this company has the best technology, they’ve got patents, and anyone who wants to use their best 5G tech will have to partner with them and pay royalties.

He also hints that…

“This tiny $2 company has ALREADY signed a $10,000,000 deal with one of the leading tech companies in the world…”

And he later goes on to say that the company is already working with Samsung, as evidenced by one of their pieces of tech being found in a teardown of a Samsung phone, and that they’re also working with Murata, which is an Apple supplier, so might perhaps be in the next iPhone.

I have no idea whether or not they’ll get any Apple business, but we can at least take you out of your misery and reveal the “secret” — this is another tease of a Resonant (RESN), a small-cap RF filter technology company that is indeed trying to push adoption of its patented filter technologies in 5G phones.

Here’s now Resonant describes itself:

“The filtering problems of RF front-ends are rapidly becoming so complex that very few companies can solve them. At Resonant, we have developed a fundamentally new suite of technologies we call Infinite Synthesized Networks®, or ISN®, to configure and connect acoustic resonators, which are the fundamental building blocks of RF filters.”

You can see Resonant’s latest investor presentation here, it lays out the case for the company pretty well and certainly tries to make a claim similar to Basenese’s, that Resonant’s technology will make filter development faster and cheaper, and that 5G should dramatically increase their royalties as they move their XBAR filters into development with an “industry leader”.

Resonant is a very small company, with a market cap of about $120 million and no real revenues yet — they did receive an initial $2 million pre-payment of an anticipated total of $9 million in royalties (over several years) from Murata last year, and that showed up as a receivable on their cash flow statement but they apparently haven’t actually earned it yet, it hasn’t hit their income statement. Regardless, though the company is still on pace to burn through roughly $30 million a year, mostly on R&D and selling/administrative costs, so even a high-margin royalty of a couple million dollars a year isn’t enough — they need to get bigger.

Will they get there? I have no idea. If you’re interested in committing some capital to this technology startup, I’d urge you to listen to their recent presentation with Loop Capital and see if you find their plans reasonable, and explore their website to get a handle on how you think they’ll make money. The royalties will presumably be quite small, since RF filters are small devices and it’s a very competitive business, but if they can get their technology used on products that are inside iPhones and negotiate a per-piece royalty it could quickly become large even if the per-device royalty is minimal.

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Resonant has been teased before, most recently by Chris Wood, and they were also an MBD Capital client and were publicly promoted by Lou Basenese five or six years ago, back when the rumors swirling were that Skyworks was partnered up with Resonant and might acquire them, and there was some very critical coverage of the company by the short selling folks at The Street Sweeper (which isn’t around anymore).

This is what I wrote a little over a year ago, when Chris Wood was teasing Resonant:

“The business model is appealing, I love royalties, but these are such low-cost items that the scale required to actually generate meaningful revenues, even for a tiny $85 million company, is pretty overwhelming. I only looked into this one for a couple hours, but don’t see an easy pathway for them to cover their operating costs with royalty revenue unless they become “built in” to a big chunk of the global RF filter business, which would be a huge accomplishment for a brand new company competing in an industry of titans (like AVGO and QRVO)… so it might be a fun story and it’s not impossible, but my initial reaction is that I think the risk is too high and that their sales growth will likely be disappointing in the near term.”

(In case you’re curious, by the way, no, that move from a $85 million market cap in April of 2019, when I penned those words, to $120 million today, is not representative of shareholder returns… the stock price is actually down 20% or so, the market cap is larger because they sold more stock).

And Resonant’s history of heavy promotion and “overpromising” by the company or its mouthpieces, really, is a bit of a yellow caution flag for me. Basenese is not the only one who has been fascinated by these kinds of small-cap “we’ve got a brand new patented technology that will take over the world” companies, but he seems to have had a finger in most of the MDB stocks that went through that overhype-to-disappointment cycle (sometimes multiple times). At one time or another he has teased or publicly recommended probably at least half of the higher-profile “small cap IP” companies that MDB Capital helped to launch, including some stocks that turned out to be heavily hyped penny stock disappointments after their initial surge, like UniPixel (UNXL), ClearSign (CLIR), Parametric Sound (bought by Turtle Beach (HEAR)), Ideal Power (IPWR), VirnetX (VHC) and Energous (WATT). I think UniPixel is the only one that has actually disappeared into bankruptcy, but they’ve all been hype-driven gobblers of capital for anyone who bought during the initial surge of excitement.

That’s not Basenese’s fault, particularly, I don’t know what his track record is like otherwise, or when he might have sold or recommended a sale on all of those stocks. All of the small cap tech newsletters seem to drift from time to time into the orbit of MDB Capital or other promotional brokers and conferences (like LD Micro) as they look for new names and new ideas.

The fact that Resonant is specifically from that MDB cohort, though, with a CEO from Energous, leads me to be more concerned about the likelihood that they’re overpromising on their potential than I am about “missing out” on some historic run, so I don’t think there’s a real rush… we’ve got time to think it over, try to figure out whether the company has a real business that can scale up dramatically enough to cover their operating expenses and make a profit one day, and be our own best counsel.

That’s just my thinking, though, and maybe I’m wrong… or maybe you’ll disagree. Have any thoughts on Resonant you’d like to share? High hopes for the future? Let us know with a comment below.

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Robert
Irregular
July 14, 2020 2:02 am

I still don’t know recall name of the stock that supposedly all the other 5G companies need to do deal with! I may have seen the name mentioned here, but forgot. The patent should be valuable/essential from what I gathered, but am I too late in the 5G festivities!

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Scott Ruscello
Member
Scott Ruscello
September 7, 2020 11:37 pm
Reply to  Robert

I believe that you are thinking of HonHai/Foxxcomm.

riya
Guest
July 14, 2020 2:48 am

nice blog

narr01
Irregular
narr01
July 14, 2020 6:44 am

Basenese has touted this stock that has gone steadily down with some bumps since its IPO five years ago with such a tenacity that I cannot help to think that he’s receiving payments from them or profiting personally in some way from pushing it.

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Lou Basenese
Lou Basenese
July 14, 2020 10:30 am
Reply to  narr01

I’m a 100% independent analyst. I have never taken money from any company or third party to write about a stock. I personally own the stocks I write about, so yes, I profit if my readers profit. As for this 5G stock, I’ve owned it for years and it’s been volatile. I originally recommended and bought it close to the IPO price before it ran to $19. Trading around a core position is a way in early-stage tech to profit through the volatility.

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Drema R Devlin
Guest
Drema R Devlin
September 2, 2020 5:02 pm
Reply to  Lou Basenese

What is the name of this tiny 2$ company they are talking about ?

alexho
alexho
July 14, 2020 5:54 pm

Here is the RESONANT marketing strategy, in their own words: “Resonant is a licensing company, which makes developing, protecting, and commercializing its intellectual property of primary importance. Resonant engages in a thorough process of intellectual property landscaping that provides an in-depth analysis of not only the markets the company is addressing but adjacent markets so that the company can tactically and strategically protect its position in the market through the filing of strategic patents.” WOW, their marketing group deserves a reat atta-boy for that bit of word-smithing. Delving further into the fine print on their website, it seems RESONANT does not produce or sell a physical electronic filtering device for use in celphones or other electronic products. It offers a “FILTER IP STANDARD LIBRARY” intended for use by any electronics manufacturer (at a fee), allowing them to design their own filters meeting their own specs that would be “foundry built” into their own product line (celphone or whatever). IRESONANT also offers a “ISN PMTX™ (PROCESS MONITORING TOOL)” (at a fee), that somehow controls the quality and electronic characteristics of the filter that is produced using their filter design parameters as designed using the above “LIBRARY” documents and “MONITIRING TOOL.” RESONANT claims to have patents on both the LIBRARY and the MONITORING TOOL. Just how successful and air-tight these patents are, if the resulting filters do work as well as touted and if they are indeed not producable by any other means without violating RESONANT patents, remains to be seen. IIt sounds like a recipe for years of court battles and solid retirement plans for teams of lawyers.

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cirque73
cirque73
July 15, 2020 4:16 pm

“They need to get bigger”………..Buyout target?

Brady
Guest
Brady
July 16, 2020 12:05 pm

Fred

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Brady
Guest
Brady
July 16, 2020 12:13 pm

Does anyone know the name of JEFF Brown’s #1 stock pick for 2020,a maker of an RF semiconductor that will be in all 5G phones?

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Oilman
Guest
Oilman
August 19, 2020 8:31 am
Reply to  Brady

If you are asking for an RF filter JB is teasing, it is Akoustics (AKTS)

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Don Young
Member
Don Young
August 28, 2020 4:50 am
Reply to  Brady

Brandy, I’ve been researching this for several days. I bought the news letter but could NOT find the ticker name so I called them. I was told that the stock is MICOM. BUT I have some questions about that. You see MICOM historically has don a lot with memory and stuff like that NOT RF stuff. On the other hand they have one engineer there must be really sharp . He only holds about 1200 patents so anything is possible. If you have more info I’d like to know. I’m totally new to all of this so can use any help I can Get, Don
OH ! Do you know where or why OILMAN got {akts}?

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nrggate
October 23, 2020 7:42 pm
Reply to  Brady

On Oct 21, 2020, Jeff Brown presented his Beyond Exponential pitch that included a free report called “A Stock to Rival NVIDIA.” This report discusses the 5G megatrend and identifies a watchlist company, namely Unity Software (ticker: U). Unity began in 2004 and had its IPO last month. According to Jeff Brown, “Unity Software provides a bleeding-edge gaming engine for creating interactive 3D games and content.” He wrote, “5G will send gaming revenues soaring higher.” The game Fortnite has 350+ million registered users around the world. Jeff Brown wrote that today, “nearly 64% of Americans play games on their smartphones at least once per month.” He cites 27.5 million Fortnite players who attended rapper Travis Scott’s concert inside the game in April as an indication of where entertainment via 5G is heading. He compares this concert to the World Series, which averages 13.9 million viewers. Jeff Brown recommends waiting to buy Unity until after the IPO lockup expires in March 2021, when prices are expected to drop following VC profit-taking. I chose not to subscribe. Travis and others reading this, what are your thoughts?

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OSUfball
Irregular
July 19, 2020 12:03 pm

Lou has a pretty good track record on his biotech stock picks. I used to subscribe to one of his paid letters, and get his free email updates now.

Regarding 5G, I started tracking all these 5G stocks around the time we cracked the list of 5G stocks George Gilder started hyping. The only one that has done well is Cerence (CRNC). Think its a little early to get excited about 5G.

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schnischni
Member
schnischni
August 6, 2020 9:31 am

Is this the same stock being teased on MF “Good bye , old iphone this could be 40x better”? If not, anyone know the stock they are referencing?

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dougbdizoglio
Irregular
January 1, 2021 10:24 pm

Hello, Show me the deep water please, I can’t swim but i need to, learn. At 72 I am brand new in buying/selling stocks. I especially love the quick hit, wham bam thankyou mam, and again at 72 Why wouldn’t I? With all that said it is too early in the game for me to be angry but I am. TEASERS, teasers, teasers, seem to keep coming up , liars ,liars liars. From what i read, these guy’s are all billionaires, SO WHY WOULD THEY THROW BS STORIES OUT THERE for us to buy into at 49, 79, 1nd 2099 dollars If the stock they shop, is so good? I just want to know if the Glass battery at 2 bucks or so is BUY, or if RESN is wort6hy looking into at my income RANGE.. Or if SNDL is really going to do something some day. Im retired with a regular or normal retirement, throw in a 100% disability from US ARMY, and it becomes An ok income. Now i just want to leave my four grandkids a little something to be able to say, Hey I remember him about me, BUT THE BS I’M SEEING FROM THE TEASERS IS MAKING ME TO SKEPTICAL TO DO ANYTHING ANYMORE. End Rant, Thanks for listening

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Frenchy
Frenchy
January 2, 2021 11:55 am
Reply to  dougbdizoglio

Thanks for you service, as far as teasers, that is why Gumshoe is here. Get ride of the clutter and let Travis do the parsing for you. Being here should bring some peace of mind in the financial mine fields out there. Good luck!

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