On numerous counts Coby has emphasized that the first deal is...

On numerous counts Coby has emphasized that the first deal is the hardest to secure. As we await a potential commercialization announcement, a reminder to all of us that the financial details of the first deal may not to be “huge” in terms of revenue, this first deal will however set the platform and terms for future growth. As Coby and Dadi have said, the “flood gates will open”.

We’ve seen a range of share price predictions… some predicting once the anticipated announcement drops and if it’s as positive as we’re hoping for that we’ll hit anywhere between $6-10, valuing the company between $960 to $1600million on a fully diluted basis.

While those predictions may seem ridiculous (to some) let’s not forget the typical growth trajectory of disruptive companies. For some people this is hard to perceptualize, after all the ASX is financials and mining heavy, both sectors being deeply cyclical where growth depends on various macroeconomic factors and valuations must be underpinned by profit. These type of cyclical businesses tend to mean-revert and performance follows the pattern in the figure below.



Innovative and disruptive company such as WBT follow a completely different appreciation and uptake profile. These businesses tend to change an industry forever. They introduce a structural shift, which is why they follow a “S-curve” growth trajectory. WBT is the forefront of this as the semi-conductor world is yearning for new memory technology to enable next generation products. Examples of products below… seriously look at the adoption rate of mobile phones and the internet – the reason these products were able to grow so fast was because they were simply better than anything that was available at the time made possible by R&D of technical components (such as our memory!!).



Referring to the chart below, while progress and uptake in the beginning is slow and at small scale. WBT is currently just past the “innovation” stage and entering “early adopters”. It’s not even funny how early we still are!! Once we hit a few dozen commercial agreements WBT will enter “early majority” phase and this is were it gets exciting. For technologies with an edge, this is when the adoption rate picks up from10-20% to 70-80% (across all new memory technologies, not all of this will be us but we are one of the most advance, cheapest per bit and first to market!),many of us cannot phantom the acceleration of growth that will take place during this stage. The next 5-10 years will be exciting.

Some of us might see this early growth and be tempted to sell. However, patience will reward those that hold through the acceleration phase of the S-curve.

If you haven’t seen already I highly recommend this video as Tony Seba beautifully describes “S-curve” phenomenon, despite the context being EV the equivalent applies for any disruptive technological break through.

What's exciting about is that WBT we will have the growth of a typical disruptive, game changing technology firm but also the underlying fundamentals of a value firm. Our business model means we'll generate strong retained earnings and profit! This means we will attract institutional fund managers with a growth style tilt and investment managers that only invest in "value stocks".

I can’t wait for Weebit Nano to become super-saiyan.