Is The Market’s Most Controversial Stock Set To Implode?

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It’s not often you’ll come across a stock that has risen roughly 200% in the past year and is still valued at less than six times projected 2014 profits. Equally impressive: Those profits are expected to come on the heels of 450% revenue growth.

Sounds too good to be true? It quite likely is.

Yet those are the heady numbers swirling around technology upstart UniPixel Inc (NASDAQ:UNXL).

UniPixel Inc (NASDAQ:UNXL)

Here’s another stat to ponder: More than 40% of the trading float of this stock is held by short sellers. There are a whole lot of investors that think the entire company is a sham. And unless the company can soon point to tangible progress, then short sellers may reap some handsome profits as the stock tumbles back to the single digits.

I took a deep look at Uni-Pixel’s business model about four months ago, right after shares had plunged 50% in a matter of weeks. (I encourage you to re-read that piece before continuing, as I’ll be referencing it throughout this follow-up.) Since my last look at the company, shares have rebounded almost 10%. But that doesn’t begin to reflect the behind-the-scenes drama that continues to play out for this company.

The Kodak Connection
Shares of Uni-Pixel began to rebound in early August when management discussed the company’s pre-production efforts underway at the manufacturing facilities of EASTMAN KODAK (OTCMKTS:EKOD). (As I noted in June, the two companies had inked an agreement in April of this year that initially powered the stock higher before investors grew dubious of the relationship.)

CEO Reed Killion noted in a second-quarter conference call: “The construction in [this] build-out effort is well on track; Kodak now has over 40 full-time Kodak employees dedicated to the manufacturing and supply chains for UniBoss touch sensor solutions. Our rapid progress during [the second quarter] enabled us to receive the two printing lines and supporting equipment at the Kodak Rochester facility around the end of June.”

There was plenty of other fodder for the company’s supporters on that conference call, including presumed agreements with other technology firms that may seek to use Uni-Pixel’s technology in their own manufacturing processes.

Still, the company had yet to actually build any products for sale. Killion said, “We are on track to meet production-level revenue in [the fourth quarter],” adding that “that this PC partner wants product on a shelf of holidays. … For us, the drop-dead date to ship product would be … Oct. 1.”

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