This particular ad from Ian Cooper has been running for six weeks or so, at least that I’ve seen, so it’s not exactly “red hot” and brand new, but I’m still getting questions about it and the ad is still being circulated… and the stock being teased is down about 20% since I first saw the ad, so who knows, maybe it’s a better buy now.
Cooper is selling his The Next Superstock service ($99/year), which we haven’t seen promoted before… here’s how the ad gets our attention:
“A small $7 company is quietly positioning itself to reshape nearly every major industry in the world thanks to its discovery of…
“Energy… Defense… Electronics… Medicine…
“This life-changing innovation could change them ALL forever and turn every $1,000 into $467,000 for those that act NOW!”
Sound a little familiar? We have seen all kinds of “miracle metals” pitched over the years, from lithium and cobalt to zinc and rare earth magnets, but this ad actually seems really familiar. Let’s check out some other clues:
“Dr. John Zolper, VP of Technology at Raytheon, has stated that Miracle Metal is currently ‘changing your world.’
“An MIT professor says that this is a ‘once in a lifetime opportunity to change not only electronics, but the entire energy industry.'”
Hmmm… also seems familiar.
Then we get the photos of chunks of this “miracle metal” that you can see will stand up to the strike of a hammer… but also melt into a liquid in your hand.
And we get the pitch that this is being used to take the place of silicon, preparing us for the next wave of revolutionary chips as silicon has reached its performance limit.
And a few specific clues:
“The same way that silicon made fortunes for so many investors who jumped onto the back of the tech giants… the big defense contractors… cutting edge biotech companies and more…
“Miracle Metal has the very SAME potential behind it.
“And a small, little known $7 company sits firmly ahead of the pack, with a whopping 46 Miracle Metal patents in its back pocket.”
And a few more tidbits:
“they own the LARGEST Miracle Metal production plant in the world….
“While also setting the gold standard with their proprietary Miracle Metal wafer manufacturing process?”
And we get the typical “what if” scenario that is supposed to sound conservative, but is actually wildly speculative:
“…what if this company cornered just… 5% of its market share?
“Well that 5% would translate to annual revenues of $20 billion…Are you getting our free Daily Update
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“And they’d still only be 1/10th the size of Apple.
“$20 billion also may SEEM like a ton of money… but in reality it wouldn’t even rank them in the top 500 revenue-producing companies in the world today.
“But they currently are only pulling in $98 million in revenue a year.
“So, making the leap up to even just $20 billion even a jump to a modest would mean a 20,000% revenue surge!”
OK, so if this company is actually being touted as a maker of substrates — as a wafer supplier whose “miracle metal” competes with polysilicon wafers — then it’s probably better to think of them not as a part of the whole semiconductor market, but as a part of the wafer market… right? The global semiconductor industry does have total revenues of about $460 billion, but the estimates for the size of the wafer market put it at more like $7 billion. And that includes not just silicon wafers for semiconductors, but for solar panels as well.
So at $98 million in revenue, this particular company would be about 1.4% of that wafer market right now, in terms of sales… getting to 5%, which is a remarkable achievement in any industry, might only put them at a few hundred million dollars in revenue.
Which is still a nice jump from $98 million, of course, but it’s nowhere near the crazy promises made by Cooper in this ad — he talks up that jump from $98 million to $20 BILLION as if its rational, even though that’s three times as much as the world’s chip companies and solar panel makers spend on their silicon wafers right now. I guess it’s possible, if this is some proprietary new miracle technology that the world is suddenly willing to pay more for — but the story of silicon and semiconductors has never been one of rising prices, it’s been one of massive cost cutting and scale and industrial efficiency and a desperate pace of innovation to allow chip designers to hold on to their gross margins.
So cool your jets with that “$1,000 into $467,000” silliness. But still, even after we’ve done away with the crazy rose-colored glasses, we still do want to know what the stock is… right?
Indeed, so the Thinkolator obliges: This is AXT, Inc (AXTI), the maker of gallium arsenide chip substrates. And yes, gallium is that “miracle metal.”
And that brings us to our “why does this sound familiar” bit — we saw this same stock teased by an entirely different newsletter, from a different publisher, just six months ago… and Ian Cooper’s ad copywriter either wrote both pitches, or “borrowed” a huge chunk of Michael Robinson’s “Shape-shifting Smart Metal” ad that we covered back in May. It’s not just the company that’s the same, whole sections of the ad are either minor rewordings of the same pitch or, for some big chunks, the exact same words. Doesn’t particularly bother me that