AEYE: thoughts on a secondary

Given the cash position, the size of the company, and the point at which they are at in their lifecycle as a company (very early-on)…

i found the following in an article commenting on the stock’s recent rise… this article was date Jul 3, 2014 at which time AEYE was trading for $.52. It closed today at $1.07.

The Q1 report tells us that 1,300,000 warrants were exercised at $0.01 per share during the three months ended March 31. If you take a closer look at the 2013 10-K, you’ll see that last year, AEYE sold quite a lot of investment units at $0.30 a piece. As is often the case, the units consist of shares and warrants and although the discount is not huge (certainly not as ridiculous as the ones we’ve seen in other penny stocks’ filings), if the price continues to grow, the profit opportunity might be too big to ignore.

Another thing worth bearing in mind is the increase in the number of authorized shares that took place in March. The A/S count was raised from 100 million to 250 million and, especially in light of the fact that the number of outstanding shares at the moment stands at under 60 million, this might mean that some dilution could be expected.

a couple thoughts for those thinking of buying in over $1.00:

this company’s stock will be very volatile. it’s early, early innings here. depending on who was buying all those investment units at $.30 a piece and depending on if there are any limitations around when they can be sold, we could see some profit taking on those with them up 3-4x.

also, in general, increasing the authorization of shares doesn’t mean a secondary is imminent. that can happen for a number of reasons. but given the size of the increase and vs the total number of shares outstanding… they are making room for a fairly sizable action. it theoretically could be an acquisition where shares are what are primarily used since they only have about $500k cash. Or it could be to do a secondary.

i have invested in a handful of early stage pre clinical biotechs that I have held for several years now and so have quite a bit of experience with secondaries. if you’re smart, you will do one when you don’t necessarily need to do one. you get better pricing and you don’t have as much dilution. with the stock way up over the last 1-2 months right now and near a 52 week high, right now might not be a bad time to do one. then, you have to see how it gets priced. if it gets priced at say $.75-80, and the stock is over $1, the stock would sell off pretty quickly to that level the secondary was priced at or below.

just some thoughts and a sort of stream of consciousness… remember this is still a penny stock… tread carefully.



remember this is still a penny stock… tread carefully


This is starting to seem like a feeding frenzy – a whole lot of excitement and confirmation bias, sort of like some of the Chinese fertilizer stocks in the good old days.

GauchoChris raised some important points and there was a bit – not a lot, but a bit – of a steamrollering reaction, as if he were departing from the gospel.

In cases like this, each additional excited voice chiming in is of relatively small value, and each cautionary voice is worth its weight in gold.

I have been around a long time, and have seen many things. Among them are many instances where this kind of a cheery consensus became very expensive, for reasons that were not at all apparent at the outset.

If this message bothers you, think about what that means for a minute. Nobody paid me to post it; I am trying to help balance things a bit.



this is an interesting post, as it got me to go back and re-read all 19 of the posts in today’s big thread as I hadn’t remembered it as lots of excited voices.

After re-reading them, I interpret the majority of them as either questioning/challenging the company or making off the cuff jokes or benign comments. There’s actually only a few that seem to be preaching positives and excitement from what I see. I wonder if the nearly 20% rise in the stock price today made it seem like all of the posts were positive in retrospect?

Regardless, LTC’s message is an important one. This is a small, risky company, that most of us had never heard of a few days ago. That being said, I did buy some shares and will be keeping an eye on this one.


" will be keeping an eye on this one."

I think you should keep “AEYE” on this one!


a side question, does anybody have an issue to enter AEYE into TMF’s Scorecard? It doesn’t seem to recognize the symbol for me

I haven’t been able to get it onto my Scorecard either.

Yesterday I emailed MF to get AEYE ticker added to the scorecard. Today I still have not been able to add it. Perhaps we can all make the request and get some action!

I did as well, yesterday.

Same here, can’t get it on my scorecard and have sent in an inquiry

I think they have minimum requirements for companies to be included. AEYE may just be too small at this point.