Jan. 2 at 10:25 PM
$PXLW -Based on today's market action where the stock is up ~7.5% to ~
$6.84 (Friday, Jan 2) the market is signaling that the "deal risk" has been effectively removed. Investors are betting that the Board's decision to override the failed vote will stand and the transaction will close imminent.
By the end of next week (Friday, January 9), thinking PXLW may trade in the
$7.40 –
$7.80 range.
While the cash value alone implies the stock is worth roughly
$8.00, it will likely hit a "ceiling" just below that level due to "cash burn" fears, unless the company explicitly promises a dividend. The Math Behind the Target
To understand why
$7.80 is the resistance level, look at the implied valuation:
Shares Outstanding: ~6.35 Million
Expected Net Cash: ~
$50 Million
Cash Per Share: ~
$7.87
Current Price: ~
$6.84 (trading at ~0.87x Cash)
The Trade: Next week, as the "Closing" headline hits, the market will likely bid the stock up from 0.87x cash (
$6.84) to 0.95x cash (~
$7.50).
