--- the subscriber area has no ads and those above are not selected or endorsed by this site ---


Akoustis wafer prep acquisition, crypto macro and more +4

08:37 04-Jan-23


Akoustis has acquired Grinding and Dicing Services, Inc. to support its coming application for funding under the CHIPS+ act for $14M in cash, $2M in stock, and $4M in deferred payments over 3 years, according to the 8-K filing.  Akoustis has the unfloated shares to issue, so I assume no dilution is taking place.  The press release also includes yet another quote from Senator Schumer, implying that the company's application for funds will go well.

The acquisition is expected to be immediately accretive, adding $1.25+/-0.25M of revenue with double digit growth, margins around 60%, more rapid prototyping, and new efficiencies within 18 months.  Management also reiterated its fiscal 2Q23 guidance, despite ongoing supply chain challenges.  The GDSI relationship began about a year ago to mitigate these issues, according to the conference call, which has just concluded after only 20 minutes.  AKTS has not traded so far in the pre-market, and I would not be surprised if this development is ignored for the time being.

I'll also note a joint statement from the Fed and other regulatory agencies on bank exposure to crypto-currencies.  Here's the key quote:
Based on the agencies’ current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector.
This signals road blocks to broader crypto adoption, and a potential pullback in traditional funding, but I think it is neutral or better for equity markets over the medium to long term, as a pointless distraction and waste of funds fades.  I am likely to update this note later in the day with a macro rank once Quits and FOMC minutes have been disclosed.

Finally, PPL has also scheduled a call to provide a positive-sounding update on its progress in repositioning itself for the morning of January 11th.  I will listen, but only write if there is opportunity.