Morning all,
As I've previously stated, I believe that the first FAA approval will be a major catalyst for a re-rate.
Having FAA endorsement / STC approval for alternate inspection method basically announces to the market (for that particular application), CVM tech negates the need for costly / time consuming hangar based maintenance / preventive maintenance.
Think about that for a moment - tech validated / governing industry body approval / application process completed successfully (for that particular application).
I would expect a commercial deal with Delta to follow very shortly after (so I would expect an announcement that states SMN is working on a binding term sheet for the installation of sensors and data capture for the wi-fi domes) - again, this will move the SP significantly north.
I would also expect subsequent applications (many of which are already in the pipeline) to come "relatively" thick and fast after this, meaning the news flow could be significant as each application for each aircraft type would likely mean a new separate announcement.
It won't take the market long to suss this out after the original FAA approval for our current STC for wi-fi is announced. In fact, I would expect plenty of well worded commentary from SMN around what the FAA approval really means beyond this single application (They've said as much in prior announcements, but it doesn't mean much without the first official FAA approval).
All this puts the stock into a different stratosphere in terms of market exposure. If SMN (through Stephen Forman and the IR team) can effectively promote this quickly to the industry, we'll be on multiple international radars. Major new tech / alternative tech breakthroughs for a huge industry that plays a crucial role in cost savings and catastrophic failure mitigation is a rare event indeed.
Now, to be fair, there is a chance that the FAA will come back requesting more info / further validation / increased data analysis. BUT, IF we get FAA approval as we expecting, then the re-rate will be significant.
We have a very low SOI, our top 20 holds 50%, we have a vertically integrated business with AEM and the prospect of a huge economic moat around what will be industry changing tech. Combine this with significant future news flow for other applications and commercial deals potentially being inked with multiple airlines and you get the picture...
The reality is our MC is sitting at under 50mill at 40c SP. (and will likely stay at this level until the FAA news comes in) - to be honest, if nothing else happens I don't see it falling below 30c given the economics of AEM and our ongoing cashflow positive position.
However, with our first FAA approval and a commercial deal signed with Delta, this could very easily go strait to 250 - 500mill MC. This industry will immediately realise that:
1. wi-fi dome approval for the tech is literally the tip of a very big iceberg - 100's more applications will be pending across multiple aircraft types
2. although the immediate deal is likely to be with Delta (as they are the ones currently partnering with us for testing) - there are literally 100's of other airlines that make up our addressable market (all with ageing fleets looking for significant cost saving initiatives).
From there, further validation from the FAA - in the form of say, the Aft Pressure Bulkhead application approval would send the company to the $1billion+ MC in a heart beat.
I've been in this stock for years, now holding a few hundred thousand and have averaged down over time to around 55 cents. Personally, i'm not selling a share under 5 bucks... I genuinely wish everyone who holds this the very best of luck, its been one of my most frustrating holds tbh - IF the FAA approval comes through I have no doubt it will be the start of a huge re-rate. If not, well it won't get much worse than where we are now...
Cheers,
Powerage
All above is IMO
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