I posted about this company last week when the shares were around $5.50. Today they made an annoucement that they are integrating video conferencing into their Inferno AR (Augmented Reality) platform to provide AR-enhanced video conferencing. The shares are now around $7.21. I forgot to mention in my last post that NexTech came onto my radar screen when I saw that they had partnered with Fastly to provide security for their AR platform. Every day it seems like there is good news coming out of NEXCF. The float is pretty small around 64 million shares and when the NASDAQ uplisting occurs within the next 6 weeks I really do think these shares will go parabolic. AR is going to really take off in 2021 when Apple introduces its AR glasses and NEXCF will be right there to integrate with the glasses. I increased my position today by selling off a bit of my Zoom position.
I was in NEXCF in February when it was around $1.30, then sold at $2.30. I am happy about that decision for multiple reasons:
NEXCF has three product lines if I remember correctly, all of which have broad appeal with the future of AR/VR. Though their growth WAS incredible up until this year (they are now growing at around 150% I believe), its off an incredibly small base (something like $2.4MM CANADIAN dollars). If their product was anything special, their adoption and revenue should be DRASTICALLY higher than it is now. The companies we follow on this board likely have way higher growth rates than that when they were at $2MM quarterly revenue (I’m guessing in the thousands), and most of them didn’t have the broad appeal or optionality of AR/VR. When you consider that many companies are working on AR, including Apple, you realize that the probability that NEXCF has groundbreaking technology is extremely slim.
For the last year, their CEO has pitched the stock way more than he’s pitched the company, and that worries me. I don’t think its a scam, but I think his main goal is to get rich instead of trying to introduce an amazing AR/VR platform to the world. All his appearances have been on the same show, which hypes micro cap companies, and the entire time he talks about how they are the only public pure play AR company. I’ve never gotten anything informative about why their company is different than everyone elses. Also, he promised $20MM in annual revenue in 2020. Unless a miracle happens later in the year, that isn’t going to happen. He seems to be more of a hype man than an actual CEO.
I still check in with the company from time to time to see how its doing. Even though its $7.41 as I type, I’m extremely happy with my decision to sell.
AR/VR is kind of like 3D printing from those halcyon days of MF recommending 3 companies with extreme promise and few results.
Good: Data and information transfer is higher today in capability than when the Oculus 1 first emerged.
Better: Gen2 and Gen3 versions of hardware are coming from a bevy of major blue chip suppliers (like Google)
Even Better: Companies are getting more data to fill the streams with pictures and indicators and graphs.
Bad: These tools require extreme customization for true interactive use. Data formatting, configuration, translation and loading into platforms based on use cases.
Worse: platforms and standards for presentation are not easy to generalize, so, use cases need to be optimized for application, hardware and use cases.
Worst: services revenue and skilled deployment specialists are not readily leveraged to accelerate along with the capabilities of the technology. It’s going to be starving for a while, as the applications benefit cycle is choked by multiple constraints.
This is not a green field of verdant grasses, ready for frolicking in spring time sun. Its a patchwork quilt of fescue and asphalt and the foundation of old sheds, waiting for a bunch of carpenters and other skilled tradesmen to meet the architect, who’s currently on the phone with the city permitting office.