This isn’t the first time we wrote about Brett Conrad’s Longboard Capital’s Resonant Inc (NASDAQ:RESN) position. Resonant Inc is a micro-cap technology company that came to our attention three years ago when it was pumped by certain writers on Seeking Alpha. It was covered at Value Investors Club as a short candidate when it was trading at $18 per share. Here is what was said at the time:
Resonant inc. (“RESN”) is a $145 million market cap Jobs Act IPO that is up 200% since its ipo last May, has no revenue, has no venture capital investors, has underwriters with questionable performance, has significant product risk and is cash flow negative and trades at 10X book value (which is mostly cash). The stock is up due to Seeking Alpha articles and other promotional activity as well as buying from retail and momentum guys and excitement over the anticipated completion of Milestone 4 which “may” then lead to revenue generation in the second half of this year.
Let me first say we are not tech investors and suspect there are many others on VIC who will have a more informed view about the technology and its market. Considering the Company’s valuation, investors base (or more importantly who is not an investor) and who its underwriters are (and who did not underwrite the deal) and who management is, well that leads us to believe this might be an interesting short.
Seeking Alpha author wrote the following a few weeks after the publication of VIC’s short Resonant Inc thesis:
On March 9, Resonant announced it had signed its second customer, sending shares up to the mid $14s in after hours trading.
A day later, a flood of anonymous, unfavorable articles and negative comments hit on numerous Internet finance sites and chat/message boards, leading to a major selloff in RESN shares.
Author, who is long Resonant, believes the selloff has created a buying opportunity for aggressive investors.
Author believes Resonant is close to a royalty deal with its initial customer, Skyworks, and that securing a second customer gives it significant negotiating leverage with SWKS.
Well, within two weeks of publication of this article, Resonant’s agreement with Skyworks was terminated and the stock price plunged below $4 level. Resonant Inc.’s stock price has been lingering below the $5 level for the most part of the last 3 years.
Right now Park City Capital owns more than 1 million shares in Resonant, but the biggest hedge fund holder of the company seems to be Longboard Capital (owns nearly 22% of Resonant’s outstanding shares).
It seems like Resonant’s CEO George Holmes is the smartest trader among all. He bought 8300 shares of RESN almost 2 years ago when they were trading at $2.99 and he sold nearly 12000 shares in December and January at above $7.20. RESN shares currently trade at $4.47. Our view is that investors should stay away from RESN until they see George Holmes adding to his holdings again via open market purchases. You can sign up free of charge below to get real-time email alerts whenever there is an insider filing in RESN stock.
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The details of Longboard’s Capital Advisors’ latest 13D filing can be seen below:
Ownership Summary Table
|Name||Sole Voting Power||Shared Voting Power||Sole Dispositive Power||Shared Dispositive Power||Aggregate Amount Owned Power||Percent of Class|
|Longboard Capital Advisors||4,229,259||00,000||4,229,259||00,000||4,229,259||21.97%|
Page 1 of 8 – SEC Filing
SECURITIES AND EXCHANGE COMMISSION
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