The story of an idea. Okay, okay. It looks like I should finally spend a bit more time describing the most esoteric of my stock investments. GigOptix (GIG) is the company that I usually skip over when describing what I own because most electro-optical modulators are not a typical cocktail party topic. The stock and the company are good examples of overlooked opportunities, unexpected developments, and the persistence of a good idea – and we need good ideas and they need persistence.
UW MVIS LMRA GGOX GIG is just a string of acronyms and symbols that represent the changing addresses of an idea. Welcome to the jittery journey of an innovative idea.
Back at the University of Washington (UW), Dr. Dalton (I believe) and probably a team came up with a neat mix of chemicals that allowed for some marvelous physical manipulations. Here’s my slightly out of chronological order post:
“Wrap the right environment and wires around it and light can come in one end, get modulated by an electrical (RF?) signal and out the other end comes basically ones and zeroes of light. This is handy and necessary for things like fiber optic telecom cables and data transfer within a computer.
The current standard for a switch is about 2.5Ghz. I think he said that an interested tech company demonstrated Lumera’s product at over 200 Ghz. Lumera is also working on going up to the next step 1000 Ghz , otherwise known as 1 TeraHz (Thz). Evidently it operates on one-fifth the power of typical systems, “
I believe (and I’ll continue qualifying that because the history search would take more time than I have this morning) that UW and Dr. Dalton et al also helped develop MEMS projector and scanner technologies, a mirror on a chip that could vibrate and either send or receive images. They did some very interesting work back there, but being a university also meant that developing a commercial product would best happen elsewhere.
MicroVision (MVIS) was formed with UW’s ideas and someone else’s money. I wasn’t there at the time. I don’t know how it happened. MicroVision focused on the MEMS work. There were plenty of applications for possibly profitably disrupting the electronic display industry with some awesome competition. They didn’t ignore the electro-optical work, but it didn’t get center stage at any of the demos. MicroVision’s projector work continues in a saga I’ve mentioned in detail throughout this blog. Start with Micro Vision or the tag cloud for more. MicroVision needed money. Electro-optics weren’t their main interest. So, they spun off the division to raise some cash.
Welcome to Lumera (LMRA) a company that was the new home for the development of electro-optics. Whenever I checked in they had at least six product lines under development. The expectation was that if one was profitable, the company would solvent. If two did well, the company would grow. If three succeeded the company would thrive. That’s an oversimplification, but I’m not writing a book here, just a long blog post. They tried lots of things, and in general, whatever they tried managed to impress technically but not commercially. Sometimes I thought they were providing solutions without checking understanding customers’ needs. The company struggled. They winnowed down to a few products, but it didn’t matter. They needed cash. Fortunately, someone needed them.
GigOptix was a small company that had products and ambition. They sold modulators but realized that the internet would eventually need faster ones than their technology could produce. They also wanted to become publicly traded. Lumera had the advanced tech and the stock trading symbol. GigOptix merged/acquired Lumera and traded under GGOX. The GigOptix management took over, moved most of the work elsewhere, and shelved almost every Lumera product except for the modulators. Revenues grew, but slowly. The company was overlooked because it was so small, and the stock price slipped low. They were threatened with delisting, and accepted it. GGOX became GGOX.OB. Investopedia does a god job of describing the .OB . As for investors, it meant the company was much less likely to be bought by institutions. The stock quieted.
The company, however, was busy. From what I can recall, their regular products continue to sell; and Lumera’s technology has finally hit the market too. Within the last three years, GigOptix’s revenues have doubled. According to Yahoo!, in 2011 GigOptix made $32,270,000 while MicroVision made $5,620,000. GigOptix made more than five times as much as MicroVision. Their market caps, the market’s guess at the companies’ values, were almost the same at the end of the year. It looks to me like GigOptix is undervalued. MicroVision, well, that story continues to cycle through great pessimism and great optimism. I suspect the market is as confused as the stockholders.
In the meantime, MicroVision received a delisting notice, went through a one-for-eight reverse split, and has announced layoffs. But they expect to do much better by the end of the year, so they’ve said for many years now. I hope they are right. The technologies, products, and potential profits are impressive. Stay tuned.
In the meantime, GGOX.OB has become GIG, a three letter trading symbol off the .OB and onto the American Stock Exchange. Their market cap has doubled, and may be proof that I underestimated the impact of their recent Dutch Auction, but is probably also proof of the value of persistence.
Why be interested? Well, if you’re not, then congratulate yourself for persistence to have read this far. The modulators are the speed limiters in the internet. Want to transfer massive files? Get fast modulators. Want to video chat? Get fast modulators. Want information to flow quickly and cheaply? Isn’t that the true value of the Internet on a personal and global level? Get fast modulators.
And what else do we need that is vital and boring, that is easily overlooked, yet that may take time and the right environment to come to fruition? Thanks to those who champion the vital yet innocuous.
PS Now that GigOptix is doing this well, I’d love to see them pull some of those other applications off the shelf: Steerable antennas without moving parts; and cheap, fast, bio-labs on a chip. Very cool. We could use those.
For reference: check my posts on Silicon Investor’s Lumera board.
Better Look at a company called LightWave Logic, LWLG, they make the same thing but it looks faster and cheaper. The former CTO of Corning and the former CTO of JDSU has joined the company and now they have a former Navy Admiral now as the CEO.