The first question in the Q&A section of the AGM was a bit of a bombshell. The gist of the question was about SP performance and who is accountable. Once the ice was broken, others jumped in on the same topic. Most of the Q&A was occupied with the SP performance topic.
Comments were directed to the Chairman about his contribution to BLG and the current BLG SP. His previous association with SPP and their current deal to offload shares. Blame was being apportioned to him, even though he has no control about what two BLG shareholders do with their shares. It was an awkward moment.
I don't know if Bill's decision to leave was precipitated at the AGM but I wouldn't be surprised. This now may provide a circuit breaker on shareholder confidence - at least for those who blame him.
There was a lot of good news at the AGM. Whilst some may perceive, BLG keeps changing their focus, they reiterated that they are taking their platform technology and bringing it to market through a portfolio approach. The building blocks of knowledge and experience are being used to maximum potential. Ideas and experience from one application can be applied to others.
The laser diode business is a case in point. They already do most of the bits and pieces and it won't be a distraction from what they have been doing - it is what they do! Just like with Epiblu, the laser diode business will be a quick path to market. They are already working with the customers. There will be early revenue from this business through paid prototypes. BLG has already used service providers to package fully functional BLG LEDs. Doing so for laser diodes should also be doable.
The explanation of the delays on the G4 conversion made sense and (so far) they are only logistical in nature. In the new year the G4 will contribute a lot to BLG. The extra capacity will contribute to foundry revenue and development of customer paid laser diode prototypes. There will also be the confirmation of scaling which is important to many of BLGs portfolio of potential customers. The success of scaling will also be of interest to Aixtron as they determine the business opportunity that becomes available to them.
The start of the SP slide was the no-deal with Lumileds. This was a no-deal now on exclusive terms as we want to use tunnel junctions for everyone. It doesn't mean Lumileds (and others) won't be using RPCVD at some point in the future. The fact that the patent for RPCVD tunnel junctions has been granted to BLG and that this patent (and others) allows them to write down the value of the original Macquarie Uni patents to zero has been lost of the market. No immediate Lumileds deal has meant no short term revenue, but the magnitude of revenue from the portfolio of customers in the mid to long term will be much higher.
I look forward to a positive year for BLG after a successful (development)/unsuccessful(SP) 12 months.
BLG Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)