Update on “Moore’s Law is Dead in the Water” — Chris Wood teases “109X” gains from a Shorted Stock

Project 5X is still gung-ho about this microcap that has "made the biggest computing breakthrough since silicon computer chips!"

By Travis Johnson, Stock Gumshoe, September 14, 2020

This article was originally published about a month ago, on August 20, but there is a new push behind the stock, premised on the idea that “a ferocious short-seller ‘hit piece'” has suppressed the share price — “temporarily,” they believe. So we’re re-publishing our answer here for you, and I’ve added a deeper look into the updated info and the short attack at the bottom. Most of what follows has not been updated since I first published it on 8/20/20.

Chris Wood is peddling his Project 5X Portfolio ($2,497, 30 day refund period) with a pitch about a new chip design company that will soon strike a royalty deal with a big chipmaker, sending its shares soaring. So who is it, and is such a deal expected by other folks? Let’s dig in and check it out.

The ad is full of urgency, as is no surprise — they say that there are “only 50 openings” for subscribers, and that “this microcap is going to make its big announcement as soon as tonight” so “it’s now or never” you have to sign up NOW NOW NOW to be ready.

You won’t often find a newsletter actually turning away subscribers, of course, though some small cap and option newsletters do have to restrict their subscriber base to make it possible for folks to follow the recommendations without blowing up the share price… but the primary reason for talk of “limiting signups” is that it spurs you to make a decision, quickly, before you’ve had time to think it over. And things like “only 50 openings” often refer to a single day of a long-running ad campaign, or some other technicality, but who knows. At $2,497/yr, getting even just 50 signups is a decent campaign for a smaller publisher — that’s $125,000 in recurring revenue. Even those of us who sit on golden thrones here at Castle Gumshoe would sit up and take notice of that.

This is the lead-in to the ad that got so many readers excited:

“An imminent announcement is about to 109X this microcap’s business OVERNIGHT!

“A tiny startup with just 17 employees (mostly PhD scientists) has made a game-changing breakthrough that Amazon, Apple, and Intel are dying to get their hands on.

“This microcap is about to announce a landmark royalty deal that could 109X its annual revenue overnight!

“Here’s how ordinary investors can buy into this American microcap for pocket change before it explodes to $25+/sh.”

And the reason Wood says this company’s facing a near-term deal? They’ve “fixed” the fact that Moore’s Law has essentially ended. Here’s a bit from the ad:

“The basic idea of Moore’s Law is that computers continuously double in power and shrink in size.

“This constant doubling has led to ‘exponential growth’ in computing power…

“… which is why one iPhone is 4.3 MILLION times more powerful than the supercomputer that guided Neil Armstrong to the moon.”

Just think… the next Neil Armstrong might be able to snapchat a photo from the moon. Maybe with some cute bunny ears or a heartfelt emoji.

And why have people been pulling at the reins of Moore’s Law lately? More from Wood…

“Today, at the ‘bleeding edge’ of tech, parts of computer chips are so small they’re measured in atoms!

“Problem is… physics says you can’t get smaller than an atom.

“Microchips are as small as they can get.

“That’s right… Moore’s Law is dead in the water.”

So “smaller and smaller” progress is slowing up, but that doesn’t mean chips can’t get better and faster in other ways. And apparently this company Wood is teasing has invented a new semiconductor material for just that purpose…

“They’ve fused silicon with another element to create a new material.

“Unlike silicon, this new material does not exist in nature.

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“It was quantum engineered in a Silicon Valley lab to be ‘superconductive.'”

They include a photo of part of the patent, which means this gets awfully easy for the Thinkolator — and, frankly we don’t even need to pull it out of the garage for this, anyone can look up a patent number. This one is patent 10,636,879 B2, from April 28, 2020.

And that patent was originally filed on June 13, 2018 (these things tend to take a while), and has been assigned to Atomera (ATOM). The patent can be viewed here, should you be so inclined.

It’s about a “Method for Making DRAM with Recessed Channel Array Transistor (RCAT) Including a Superlattice.” But, uh, you totally knew all about that before, right? Yeah, me too.

Sorry, I can’t resist being a smartass. I know almost nothing about chip design, and I can barely understand a quarter of what they describe.

But sure, let’s take them at their word when the teasermeisters tell us this is the critical invention that will keep advancements moving forward now that Moore’s Law is “broken.” What exactly is the point of these inventions? More from the ad:

“According to tech news publication New Electronics, the technology can ‘improve the performance and power efficiency of devices,’ while also ‘reducing their cost.’

“MarketWatch says this breakthrough has already proven to deliver a ‘performance improvement of up to 50%.’

“And this new breakthrough microchip technology is the ‘only game in town.’

“It’s protected by a fortress of 234 patents.

“The latest one was just approved by the US patent office.”

And, of course, there’s some urgency…

“… the $8 microcap is in active negotiations with the world’s four largest chipmakers.

“I believe a game-changing royalty deal is imminent.”

And Wood provides a little back story as well, he says he has been following the stock for a while and looking for a good entry time…

“The $8 microcap passed my strict ‘tiny stock, BIG BREAKTHROUGH’ formula a year and a half ago.

“So I immediately got to work talking to my Silicon Valley contacts.

“When I confirmed that its breakthrough was the real deal…

“I knew it would likely be the biggest score I ever delivered to my readers.

“After all… the world needs its patented technology.

“We need faster microchips for 5G, self-driving cars, artificial intelligence, and any other lucrative tech you can think of.

“Which means this tiny company’s tech could soon be in billions of cutting-edge devices….

“But I refused to recommend the stock until I knew a big announcement was imminent.

“Now, after a year and a half of “stalking” this $8 microcap…

“It’s GO TIME.”

Then we get into the “urgency” bit…

“The company has a history of making big announcements around 5PM PST.

“And I DO NOT expect them to wait until a scheduled quarterly earnings release.

“This is too big to sit on.

“As early as tonight, this company is going to announce a landmark deal that causes revenue to jump up to 109X overnight.”

Why would it jump so fast, you ask? The ad explains his reasoning:

“Which is only possible because the $8 microcap is a royalty collector.

“It doesn’t produce a physical product.

“Instead, it licenses its patented material to the highest bidders.

“Then it gets paid every time they use it to make a microchip.

“Royalties are the only way a business can 100X its revenue overnight….

“The $8 microcap barely pulled in half a million dollars last year.

“And my calculations show that just one signed royalty contract could cause its revenue to jump to $58 million.”

He also hints at the company being acquired…

“I know for a fact that several giant companies like Intel are looking at acquiring the $8 microcap.

“Given the game-changing nature of its breakthrough, I doubt it’d sell for less than $100/share.

“But let’s be conservative and say it gets bought out for $75/share by Intel.

“If you get in today, before the big 109X announcement, you’re looking at a nice 838% profit.”

And just to be sure it’s really Atomera being teased, Wood does drop a few other hints:

“The $8 microcap was founded by a bona-fide genius.

“He’s an English physicist from Oxford…

“Who helped invent the fiber optic network the modern internet runs on.

“Now his team of Ivy League scientists has made another world-changing breakthrough.

“They’ve patented an entirely new way to make microchips.”

That’s Robert Mears, who is the founder of Atomera (and its predecessor company, Nanovis), and remains CTO of the company. His Mears Silicon Technology material is the heart of the company’s offering to chipmakers.

Wood is really talking up his certainty about the prospects here:

“MIT Technology Review calls the situation ‘inevitable.’

“The Telegraph says it will ‘Usher in a new era in computing.’

“The patents are locked down…

“All that’s left is the announcement that this tiny microcap has struck a massive royalty deal.

“And I guarantee it will happen.

“I repeat: I 100% guarantee this announcement will take place.”

So yes, this is just another tease of Atomera (ATOM) stock — no surprise there, given the many clues dropped. Their primary asset is a quantum engineered material that they call Mears Silicon Technology (MST), which, in their words, “enhances transistors to deliver significantly better performance in today’s electronics.”

That “better performance” takes the form of both increased processing speed and better power efficiency, and, like some other “next generation chip” technologies, Atomera says its MST can be impleented in existing fabs — it uses equipment already deployed in semiconductor manufacturing, and is, they say, “complementary to other nano-scaling technologies” that are already in development.

The problem is going to be, of course, that I have no idea how much of this is hot air and how much will become real progress. There are at least hundreds of little companies who have pioneered new nano technologies, or materials, or designs, and dozens who have been teased as investments because of those breakthroughs. And every one of those companies and designers is familiar with companies like Arm Holdings, so they all have the ambition of being passive collectors of trash bags full of cash — they all want licensing agreements and royalties for their materials and technologies, nobody wants to be the one to try to build a factory to compete with Samsung or Intel. Atomera is certainly a lot more advanced than many companies in this area, since they’ve been working for several years with a number of large chip companies to try to prove out their technology in the fab and move to a commercial licensing deal, but the range of possible outcomes is a lot wider than just “bust or 109X gains.”

And how’s the progress toward making a deal? Here’s the CEO quote from their second quarter earnings report:

“We are very pleased to continue making significant technical progress toward license agreements with large semiconductor manufacturers. Despite some minor slowdowns due to the pandemic, we have strengthened our overall pipeline by adding a 17th customer engagement to the critical Phase 3 of our engagement cycle. With recent promising results of our MST-SP technology on customer silicon, we are increasingly optimistic that adoption in 5 volt power and analog chips is closer than ever.”

The revenue for that quarter, no surprise, was zero, and they expect the revenue for the third quarter to also be zero. They do occasionally have a little entry on the revenue line, but mostly just from joint venture R&D projects or fees for engineering work in testing their tech at customer facilities, most of the income statement is really just a story of depleting cash.

How long will the cash last before they actually become a revenue-generating business? (Assuming, of course, that they every do commercialize the technology and get royalties flowing — there are no guarantees). They did sell another $10 million worth of shares, so as of the end of June they had about $18 million in cash — at the current pace, burning through a little over $10 million a year, that’s enough to get them through 2021 even if spending ramps up a tiny bit.

And yes, that “end of Moore’s Law” connection has been made by and for Atomera since the beginning — the stock has been discussed as a potential beneficiary since it went public in 2016, and has gotten quite a bit of coverage for such a small stock (including in Barron’s about three years ago… at which point they also had four major companies exploring a possible deal, and also no revenue, with the “cash burn” similar to what it is today).

So that’s the big risk — maybe nobody signs a deal with Atomera to use MST in production. Or maybe a couple companies decide to try it in low-volume production on some older equipment, and that results in minimal royalties that don’t cover ATOM’s expenses or allow for a profit. There are a variety of possible outcomes, it’s not just the “it works and you make millions, or it doesn’t work and you lose your money” — you can also just lose money slowly, as many tech startups do who never quite get to the scale they hoped for.

That’s not said to dissuade you from buying Atomera… just to get you to think about the variety of possible outcomes.

There have been teases of Atomera in the past — pundits seem eager to be the one who “got in early” on this one, with hopes that it might explode if they finally do make a big deal for someone to use their technology. It was pitched just a few months ago as a 5G play, with the intimation that Apple would be somehow helping to push Atomera higher when they announce their new iPhone in September, and that was pretty silly… but that’s the kind of thing we’ll see a lot, the daisy chain arguments: 5G is going to be big, and the 5G iPhone will be super-big, but it all depends on better networks and better equipment, and Apple is using Qualcomm chips this time out, and Qualcomm has signed a small test deal with Atomera, so therefore Atomera will naturally be soaring higher, because their technology is the very bestest.

Like all chains, it looks pretty impressive from a distance, especially if you’re eager to get from point A to point Z and don’t think too critically about all the little points inbetween… but it’s only as strong as the weakest link.

That’s a copywriting technique that works pretty well, since we like to get led along with a narrative. For example, the teased “inevitable” link between MRAM memory technology and 5G Internet of Things devices was also prone to breakage, as we noticed earlier this week, and the connection between Apple and any unproven and non-commercial new chip technology, Atomera’s or otherwise, can always be broken with a stiff breeze.

To be fair, Wood’s promise is a little more in-line with reality — he’s just pulling his revenue estimate from the company’s own material (that $58 million is from Atomera’s Investor Presentation, it’s what their annual revenue potential would be if a leading foundry adopted the technology for a large modern fab, and if they got a 2% royalty). The only juice he’s adding to that is his assertion that a licensing deal is imminent — which is always possible, but that’s been true for years as dozens of companes have been in their “phase 3” of testing the technology, and nothing from the company indicates that it’s at all predictable.

We talk about big licensing deals with the major chipmakers, and those are possible, but Atomera has also already signed licensing deals with a few pretty big companies… they have three licenses outstanding now, two of them for well over a year, and they are also supported by three of the big chipmaking toolmakers (Applied Materials, Kokusai and ASM), and that has not yet led to meaningful fee income or royalties.

They have steadily increased their “number of engagements” with customers at different levels, and have moved some of the early stage projects into Phase 3 engagements… but they also had three “phase 3” engagements at their IPO in 2016, and ten three years ago, and that has not led to commercialization to a meaningful degree. Their last investor presentation now says they have 19 customers and 26 engagements, more than half of which are in “phase 3” (as of the last quarter, one more moved to “phase 3,” for a total of 17 in that category), and they continue to say that they are “working with 50% of the world’s top semiconductor makers.” Apparently, change comes very slow to these high-volume and finely-tuned operations.

If you’re curious about what those “phases” mean, here’s how they have described the phases in the past (this is from the Q2 2019 conference call, about a year ago)…

“Phase 1 includes customers under NDA who are planning an evaluation of our technology. In Phase 2, we deposit MST film on customers’ wafers and conduct physical characterization. Phase 3 is where customers incorporate MST on their wafers during an R&D run in their fab and use the test results to justify licensing our technology. It is generally in Phase 3, that we are most likely to sign license agreements with customers. Phases 4 and 5, our customers install our technology in their fab, execute manufacturing and distribution licenses and transition to production”

They have signed three license agreements so far, but nobody has made it to Phase 4 or 5 yet.

Since nothing else really matters in the near term, the conference calls seem focused on looking for clues about when deals might be signed, or what size those deals might be — and the company trying to keep us optimistic without saying more than they’re allowed to say. This quarter was no different, you can read the transcript to get a better sense of what management is saying — or if it’s important to you, it’s always better to listen to see what the tone of voice tells you, sometimes that provides some subtext (I have not listened).

They continue to highlight one lead customer that they’ve been trying to sign to a Joint Development Agreement (JDA):

“Since our last update call, we have been making substantial progress with the first of our customers with whom we hope to institute a JDA. Technical work and communication between our 2 companies has ramped up with extensive planning and data exchange happening in the last few months to allow them to do the pre-work for the JDA now. We have even been informed that the JDA has overcome the most significant hurdle put in place by the customer’s development organization. Unfortunately, as of this earnings call, the formal contract to kick off this effort has not been completed. We continue to be huge believers in joint development agreements because we expect that they will give us an advantage on both leading and trailing edge technologies and will provide access to a variety of platforms, ultimately leading to deeper customer penetration, faster adoption and quicker ramping of manufacturing activities across the product lines.”

And plenty of more talk about “hopefully someday” contracts:

“As you know, we have three existing license partners. And I can tell you that advancements continue with them toward solutions we hope will go into production as soon as possible. Each is still excited about the impact Atomera’s MST can have on their competitiveness. One of the 3 has identified a coronavirus impact due to concerns on the market recovery and its potential change to their CapEx plans, but all of them continue to make progress forward. Although there are uncertainties in the market and we have not executed formal contracts that we can share with you today, inside Atomera, there’s a lot of confidence that MST technology offers customers significant benefits that they cannot achieve on their own.”

And they do think that MST could significantly help with 5G — both with power management chips in 5G phones, and with RF components. And they updated us on the progress of acquiring their new testing device, a 300mm EPI deposition tool that they’ve been talking about leasing all year — that’s apparently just about complete, though delayed a bit by COVID. Their costs are ramping up a bit with their newly leased tool about to be accepted, and they do not expect to book any revenue in the third quarter.

And, of course, they hold out the possibility of something big — which keeps investors waiting around with bated breath. The investor presentation still says that “Adoption of MST in one fab can make Atomera profitable from royalties alone.” Which I guess must be possible — the two examples include one “average” fab, which they said would give them $13 million in possible annual revenue if they get a 2% royalty, or, in the one Wood cites, a much bigger “leading foundry” running a 28nm fab at much higher price and capacity, with annual royalty potential of $58 million. In both cases, they also guess at half that annual revenue if they ramp-up is for only half of production, though why they specifically say 50% of ramp-up I don’t know.

Really, with Atomera you’re betting not only on the technology itself, but on what production might be, which chip lines it might be adopted on first, and even what the royalty rate might be… so it’s an investment where you’d have to be very comfortable with patience and uncertainty. It’s absolutely possible that Atomera will sign a deal this year to begin major commercial use of their MST, with licensing fees and royalties. Whether it’s probable or not, and what the timeline for that might be, well, we’re all guessing — and I’m definitely no expert on semiconductor development, so you shouldn’t rely on my guess.

But I’ll share it anyway. My guess? It will probably be next year, and the first commercialization deal will probably be on older legacy fab lines, and be a lot smaller than ATOM shareholders are dreaming of — I’d guess there’s some potential for this technology making small improvements in older chip designs, which might be good enough to sustain a business eventually, but that it’s not going to light the path forward to “save” Moore’s Law. But I’m just guessing. And for some reason, despite having this stock teased several times over the last year by different publishers, it has failed to stick in my head and I find myself re-assessing it each time I put the Thinkolator to work… I don’t know if that’s good or bad, but it’s pretty telling to me that I’ve looked it over now three times in the past year, in some detail, and failed to find any urgency in my mind that pushes me to buy shares.

Last time I wrote about this (in March, for a Penny Stock Letter tease), I said: “I’ll sit this R&D project out, if I were to buy it I’d wait for a bad day, then buy the shares and try to ignore them for a few years — periods of optimism and pessimism alternate with Atomera, but it will probably be quite a while before we really know whether their technology is going to get widely adopted.”

And here’s what I said last October, when it was teased by a Crowdability newsletter: “Seems interesting, but you’d have to be willing to be very patient and take a meaningful risk of loss while you wait to see if it works.”

I’m still in that camp. This is now the most expensive of the three newsletters that has teased the stock, and the stock has moved up, with presumably some optimism that their first larger deal might be coming soon… perhaps, they hope, a JDA with that “leading chipmaker” that could build into a larger deal with multiple fabs… or that any kind of commercial license with a royalty attached gets signed and moves to production. They seem to think they’re closer than they were a year ago… maybe that’s true, and maybe this will be the next Rambus or, dare to dream, Arm Holdings. It is, at the very least, a business with a good model and a commitment to being R&D focused and “running lean,” and it’s reassuring that their patent portfolio seems quite complete (to a non-expert like me) and is actively growing, and, maybe more importantly, that the use of their technology leaves telltale marks on chips… so if this does get to be a widespread technology someday, cheaters can be identified.

In the end, it’s a challenge because you can’t know, and the company doesn’t even know, if or when commercial deals might get done… or to what extent customers might choose to use the technology. It is possible they’ll keep trying for years with very limited success, and equally possible that they’ll ramp up to potentially $50-100 million in revenue over the next couple years and get everybody excited. Nobody at Atomera is engaging in any frantic level of insider buying that would indicate they’re excited about things heading up soon, though the management folks, including CEO Scott Bibaud, have generally held on to most of the stock options and grants they’ve been given.

–update 9/16/20–

So what has happened since then? This is from the RiskHedge promo email I received recently:

“A ferocious short-seller ‘hit-piece’ was recently published.

“It targeted the one microcap stock that RiskHedge CIO Chris Wood believes is on the cusp of soaring 150% in one night…

“… the article is trash.

“However, it did succeed in suppressing the stock price, temporarily.

“Which is to say…

“If you haven’t invested in Chris’ ‘109x microcap’ pick yet…

“The window is still open to get in at a very, very attractive price.”

There was a short attack on Atomera on August 26, published by White Diamond Research (which is one of the many short sellers that writes on Seeking Alpha). White Diamond has previously targeted a lot of other speculative technology and biotech names with short analysis as well, mostly using rationales along the lines of “we don’t think it will work” or “retail investors have bid this up because they’re dummies” (I’m reading between the lines, those are not their actual words).

Some of their short picks have worked out, like NanoViricides (NNVC) fading after its initial coronavirus bubble popped, or Canaan (CAN) as a sell at $6 because “bitcoin mining is unprofitable” (it’s below $2 now, I was pretty skeptical about it when it was at $3 earlier this year)… others have gone violently against them (like Co-Diagnostics (CODX), which they gave a $1 price target to when it was at $3 in February — it’s now at $13 after peaking in the $20s). They also posted a “it’s mostly impractical in the real world” short about Wrap Technologies (WRTC) back in July, near the peak, so we’ll see if they turn out to be right about that one (I own some WRTC as a speculative position, FWIW).

So White Diamond doesn’t appear to have any “secret sauce” in infallibly targeting shorts, no surprise there (nobody does), but what is it they’re saying about Atomera? Their article is headlined, “After Researching Atomera, We Don’t Believe Its Technology Works – $3 Price Target.”

They have a few criticisms, according to the cache of the page I saw — the primary one is that Atomera has overpromised and underdelivered, and has never gotten to “production” status with a big partner. Pricing-wise, their complaint is that “Atomera stock is up 300%+ since March, without any fundamental change or improvement in the company.”

The complaints are not really technical, White Diamond doesn’t seem to know any better than you or I whether MST really works — they’re primarily about the failure of management to make a deal, which indicates to White Diamond that demand from their partners isn’t there, and the technology isn’t worth much. They might be right, the long history of “failure to commercialize” the technology is somewhat damning, and at least indicates that MST is not as dramatically important as its biggest boosters would claim. I certainly don’t know for sure, and it’s equally possible that management is right about the inevitability of an eventual commercial deal, and has just been too optimistic in overselling their potential over the past few years in their shareholder communications — a common error of zealous pre-commercial technology companies.

But as to RiskHedge’s point, it seems to me that this relatively minor short attack hasn’t really impacted the stock. Atomera was at $12 when I covered that RiskHedge pick last month, and when the short attack came out on August 26 it dipped below $11… but was above $12 a few days later.

What really brought the shares down was the company’s filing to sell another $25 million in shares on September 2. That pressured the shares immediately, they got as low as about $9 on September 8, but they’ve been gradually climbing back and are still in the $10-11 range today. Looking at the chart indicates to me that the short attack didn’t have much impact, probably partly because it wasn’t publicly released or from a big-name short seller (it’s on the “premium” part of SeekingAlpha), and partly because they didn’t say anything that critics haven’t been saying about Atomera for years (I’d call this the “where’s the beef” argument, but only about 10% of you would recognize that reference)… but diluting shareholders by another 10%+ did have an impact.

There are short-sellers involved, and there is some demand for shorting — so it’s a relatively expensive short, with a cost of about 26% from Interactive Brokers today (that’s the annual “cost to borrow” right now, the number fluctuates dramatically but for heavily shorted names that are really hard to find it’s often well over 100%, for very liquid large caps its often near 0%). At the moment, there are only 10,000 shares available to borrow for shorting on that platform, which is a little surprising… but according to ShortSqueeze, only about 2.5 million shares are sold short right now overall, a little more than 1% of the outstanding shares, and at reasonable volume those could clear the market in 2-3 days, so the “short squeeze” opportunity is probably pretty limited (a short squeeze is when a heavily-shorted stock surges dramatically higher, forcing the short sellers to “cover” by buying shares, which leads the price higher still on that new demand). So even if you’re excited about ATOM, I wouldn’t count on a short squeeze accelerating your returns in any big way if they report good news.

White Diamond did also post a follow up after Atomera’s CEO, Scott Bibaud, presented at the LD Micro conference (which seems to be one of the more popular conferences among heavily promotional microcaps, we’ve covered a lot of stocks that presented at LD Micro and were seen as the cat’s pajamas for a year or two but later imploded) — the basic assessment from White Diamond was that the CEO’s answer in the Q&A “makes it seem like ATOM is very far away from any potential commercial agreement.”

White Diamond may be over-interpreting predictions that Atomera leadership has been making for a long time, and the actual investor presentation that Bibaud delivered a couple weeks ago doesn’t really look any different than previous presentations this year, but it’s certainly true that “overpromise and underdeliver” has been the path Atomera has followed for a couple years now… though I dont’ know whether they’ve led investors on intentionally, or just have seen their deals and negotiations move more slowly than they hoped — not as bad as more egregious examples like Energous (WATT) or Uni-Pixel (UNXL), which dangled commercialization deals for years and just kept pushing out those “next month” or “next quarter” predictions (and which also were big LD Micro presenters, if memory serves), but the same basic idea. Management teams at “new tech” companies are often true believers, who persist in believing that greatness is just around the corner even if the evidence points elsewhere… and nobody gets the CEO job at these kinds of startups if they’re not great at selling the potential of the company to their investors. Not every technological advancement that sounds impressive or catches the eye of investors is successful.

Atomera will remain a “story stock” for the time being, I’m sure — it’s still fairly early days, they’ve been public for four years and do continue to talk about advancements, and they’ve been able to sell more shares, so they’re not done yet. If they report good news or continue to be optimistic about an imminent deal, some folks will find the dream compelling and will continue to want to buy shares. They have raised money by selling shares pretty much every six months, it looks like (there were 12 million shares outstanding at this time in 2018, and after several ladder steps up in that number they should be around 22 million when this latest raise closes), and that will very likely continue… which means they’ll have to continue to be optimistic, because nobody signs up to buy shares in a secondary offering if there isn’t a dream of great days ahead.

So I’d conclude that this latest short attack and the secondary offering don’t really tell us much about whether or not Atomera will eventually succeed — but I remain skeptical about the stock. I still think that if they are successful, the likelihood (yes, it’s still a guess on my part) is that they’ll be successful on a much smaller scale than the hype-throwers and their “109X” stories would have you dream.

And with that, I’ll turn it back over to you, dear readers — excited about Atomera’s progress? Do you read the same tea leaves as Chris Wood and believe their first commercial deal will be both imminent and large? More skeptical of the timeline or the commitment to adoption by their partners, or the size of the royalty Atomera will be able to earn? Think the short sellers are right on this one? Let us know with a comment below. I’ve kept the original comments attached as well.

Disclosure: of the companies mentioned above, I own shares of and/or call options on Apple, Wrap Technologies and Intel. I will not trade in any covered stock for at least three days, per Stock Gumshoe’s trading rules.