POET: A Technical Play with Fundamental RisksThe recent announcement of POET Technologies, Inc.'s ( NASDAQ:POET ) collaboration with Mitsubishi Electric on September 19, 2024, suggests greater upside potential for the company. Given the current trend, the stock could reach $6-7 per share by year-end.
Over the past year, the stock has risen 56%, with a 377% increase year-to-date. Despite this strong performance, there are several risks to consider:
• Negative net income (the company has not been profitable)
• Frequent stock-based compensation (a 39% increase in shares outstanding since 2020)
• Negative operating cash flow
• Regulatory risks related to business operations in China
While there is potential for substantial price growth, it does come with risks. I think starting with a small position and monitoring the technical and fundamental developments is the best way to play this opportunity.