Wednesday, April 4, 2018

Vuzix - Are dreams of a short squeeze realistic?


You hear it all the time on social media, especially with money losing companies that rely on dilution to fund operations.  There are always bulls talking about a pending squeeze, how bears are gonna cry.   With it comes exhortations to buy even more shares, to "stick to those short sellers".

And I have no doubt it works, it did on me when I first started playing the market.  

Ultimately the only fundamental that really matters with public companies is the levels of supply and demand for shares.  If more people are buying than selling, then the PPS will climb.  If there are more shares being sold than there are buyers, then the PPS drops.  Economics 101, you don't need a university degree to know the basics of supply and demand.

So is a short squeeze possible with Vuzix?  

First it helps to understand the mechanics of short selling which I will explain.  I know a lot of retail shareholders only understand shorting as a "bet" that a stock is going to go down in price, without really knowing what's involved.  

According to Nasdaq the level of short interest in VUZI was 5,108,228 shares up to March 15th 2018.  The next update is due to be published on April 10th which will give the short number current up to March 31st 2018.  

What this means that on top of the 27,301,201 shares that were issued and outstanding (as per the 10K) up to March 16th 2018, there are another 5+ million that were shorted.  I call it a form of artificial dilution.  Vuzix has issued 27.3 million shares, and shorts have added another 5+ million to that.


Let's say you bought 10,000 shares of Vuzix in January at $10 because you thought it was going to $15 or 20.  At the same time a "bear" who thought the PPS was going to fall wanted to take out a short position.  That "bear" can borrow the shares from a shareholders account, at a cost of course.  The shareholder doesn't even know the shares have been loaned out, when you check your brokerage account you'll still see a  holding of 10K shares of Vuzix.  You don't actually have physical possession of a share certificate, your shares are held "in street name".

So you still own those 10,000 shares, and someone else owns them as well, hence why I call it artificial dilution.

The short seller has borrowed your 10,000 shares and sells them into the market in Janaury and gets a price of $10 per.  That nets Mr Bear $100,000 but he owes you 10,000 shares.  The short is betting on the prospect that he'll be able to buy them back for less than the $100,000 he got for selling them.  The best case scenario for a short seller is that the stock he's short on goes to $0.00 and gets delisted, then in this example he gets to keep the entire $100,000 less fees.

So where does a squeeze come into play?

We know that VUZI is now trading for a little over $5 right now, but back in January when it was around $10 nobody could say with 100% certainity which way the PPS would go.  If an analyst with CNBC had come out with a strong buy reccomendation at $10 its conceivable the PPS could have shot up to $15, $20....who knows, supply and demand.

The short seller who got $100,000 by selling the shares he borrowed doesn't get to take that money and buy a new Jaguar, it has to stay in a margin account to protect his short position, along with additional money to secure the position, typically 50%.  That means that the short seller needs another $50,000 on top of the $100,000 garnered from the short sale.

If the PPS started climbing the short seller would be required to further fund his margin account.  If VUZI had gone to $20, then the short seller would need $300,000 in his margin account.  $20 multiplied by the 10,000 shares for $200,000 plus another 50% or $100,000 to cover the cost of covering at $20+.

And here is where the squeeze can come into effect.  If the short seller is unwilling or unable to meet the margin requirments then he can be forced to cover.  The broker he borrowed the shares from will simply take the money from the margin account and buy the shares back, that's the reason for the 50% extra.  

Do note that I wrote, "can come into effect", I put it that way because while its possible I wouldn't count on it.  And in point of fact if your entire long thesis is built on the possibility of a short squeeze, then you might want to re-consider.

Going short is incredibly risky, and the players who work the short side....they have a lot more risk than longs.  Someone who's short 10,000 shares of Vuzix, having taken out a position at $10, the most he can make is $100,000 less fees.  But on the flip side there is theoretically no limit to how much he can lose, it all depends on how much money he has.  While a stock cannot fall below $0.00 per share, there's no limit (theoretically) to how high it can go.

If you decide to bet against the bears know that you're going up against players with huge bankrolls, I'm talking hedge fund types who often have more than $1 billion under management.  I would submit that this is the reason that there wasn't a short squeeze back in January when VUZI was topping out at $11.40 per share despite 3+ million shares being shorted already at that time.  

The players behind those short sales were not forced to cover and drive the PPS higher with their buying because I assume they have a big enough bank roll to ride out any pump the PPS sees.

If shorts weren't forced to cover at $11.40 what would make anyone think they'd be squeezed at just over $5?

And remember Vuzix isn't making any money, they just reported a net loss of $19.7 million for the year 2017, up from a loss of $19.3 million in 2016 and $13.4 million in 2015.   The accumulated deficit was over $96 million at the end of 2017, and is probably close to if not over $100 million by now.  

Yes they had revenue of $5.5 million in 2017, but that's revenue not profit.  This isn't virtual or artificial reality, in the business world a company eventually needs revenues to exceed expenses.  Last year in March of 2016 they put out a PR that talked about moving toward profitability, they went in the other direction.  

Good luck in any case, I doubt this miserable and pathetic blog will convince any longs to reconsider, nothing beats real world experience, even if the lesson is an expensive one.  I myself am not short any shares, instead I own put options, they're a less risky way of betting on a stock's price falling.

Wednesday, March 28, 2018

Vuzix - How bad is it?

Shares of VUZI have fallen precipitously since the company announced raising $30,000,000 via a share offering in January.  After trading as high as $11.40 inter-day on January 24th (as per Yahoo Finance) the PPS has tumbled all the way down to $5.90 as of this writing, a loss of $5.50 per share or 48% from that peak.  

Here's the chart:

The company filed its 10K on March 16th and the results, while probably expected, were far from stellar.  The loss attributable to common stockholders came in at $21,348,436 for the year ended December 31st 2017.  That was worse than 2016 when the loss was reported at $20,870,130 or in 2015 when it was $14,941,559 or 2014 at $7,868,858  

Readers can verify those numbers at the following link, page 31 or just do a CTRL+F search "loss attributable to common stockholders".  

Back last year in a release dated March 23rd 2017 the company wrote about a move "towards profiability".  Its the last bullet point, you can check the linked PR.

I don't think you require an MBA to realize that losing more money than the previous year, over and over and over again, that is not moving toward profitability.  Quite the opposite in fact.  

Compounding the dilution and losses was a bearish write up that came from a site called "Mox Reports" on March 16th, about the same time as the 10K.  It forecast an expected PPS of $0.50 and eventual delisting.  

Also included were allegations that Vuzix engaged in an undisclosed stock promotion to inflate the share price and raise $30 million.  You can read that report here.  

And that wasn't the end.  Next was a number of law firms issuing PRs about investigations into the claims made in the Mox Report and inviting those who've purchased shares to contact them.  Here are links to some of those PRs

That's a lot of bad news to absorb in a short period of time.  Dilution, losses and lawyers....OH MY!

On March 21st the company responded by issuing a business activity update:  

On top of that bullish sounding news bulls were buoyed by some insider buying:  

Three purchases by insiders totaling 11,252 shares between February 6th and March 26th.  

The purchases totaled over $73,000 according to my calculator.  As per Morningstar the CEO and CFO each earned in excess of $500,000 in 2016, down from the over $800,000 they earned in 2015.  Numbers are not yet available enumerating executive compensation for 2017.  The 10K filing says those numbers will be forthcoming within 120 days of Dec 31st 2017.  

Given that Vuzix is not a profitable company, having relied on the selling of shares to finance operations, the buys were a good move in my opinion.  

Salaries are not paid out of profits because there are none.  If Vuzix continues losing money, and the 10K discloses that they may not achieve profitability in the future, then continuing as a going concern will require the raising of more capital.

I know that many bulls are dreaming of a short squeeze, however longs should realize that if the company never achieves profitability and eventually gets delisted, then shorts would not be required to cover the shares they borrowed.  

It wouldn't be the first time that a company with what seemed like great potential failed to succeed, back in the dot bomb tech era it happened all the time, and many shareholders rode stocks all the way down to nothing.  

How bad is it?  Pretty bad to my eyes, which is why I own put options.  

Sunday, March 18, 2018

Sunday Musings on the next bear market...

As all my regular readers know, yes I mean both of you, on Sundays I sometimes like to comment on the things that daze and amaze, astound and confound, the market games that both thrill and send chills down the spines of retail investors.  

The 'Great Financial Crisis' of 2007/2008 is now 10 years in the rear view mirror.  There are players in the market who were still in high school, or even elementary school when it happened.  And that wasn't the first or only time we've seen a recession obviously.  There was the 2000/2002 market crash that came when the 'Dot Com Bubble' finally burst.  Before that the early 1990s saw interest rates explode into the high teens and low twenties.  The world economy teetered during what was called 'The Great Recession', and some pundits suggested we were headed for another depression.  

Boom then bust, boom then bust, boom then bust.  That's the way the market works.  

The broader markets have been on a tear, but obviously the bull will get tired at some point and the bear will come out of hibernation and take over for a while.  Some think that we already hit that point in January of this year, when the market started dropping.  The Dow went from over 26,000 to less than 24,000, it currently sits around 25,000

I don't think we're in a bear market yet.  Even if I'm right though, one is coming at some point, and I think it could be starting as early as this summer.  

The tax changes that were brought in this year by the Trump administration, I believe they will have a huge impact when companies start reporting their first quarter results for 2018.  If I'm right I expect that stock valuations will explode higher as companies report record earnings.  And if I'm also right on this count, then I expect that media talking heads to start proclaiming that the market is poised to go on a huge bull run.

If that happens, in my opinion caution is warranted.  In fact, if it does play out this way I will be afraid.  Contrarian investment strategy at its core means to be bold when the herd is afraid, and afraid when the herd is bold.  Smart money players sell high while the sheep buys high.  Why do the sheep get fooled?  Because they listen to the news and follow the advice of market "experts".  But that's the way it has to be, we all can't be buying and selling at the same time.

Not much more to say than that, happy Sunday everybody. 

Saturday, March 17, 2018

Vuzix slammed with allegations of fraud as 10K shows more big losses

Website has published a report calling Vuzix a fraud, you can read it here:  

The biography on the website is of one Richard Pearson which says he has a degree in finance from USC.  The allegations are that Vuzix engaged in a stock promotion scheme involving dozens of mainstream media outlets to artificially pump the PPS which allowed the company to raise $30 million via a dilutive share offering in January of 2018.

As of this writing it does not appear that Vuzix has responded in any way to the allegations.  

This isn't the first time a publicly traded firm has been accused of being engaged in fraudulent activity. Just off the top of my head I can recall numerous claims being made over the past 20 odd years:  Enron, Nortel, Sino Forest Cynk Communications...its a long list, Warning Model Management, Adzone Research, Worldcom....I'm sure loyal fans of this miserable and pathetic little blog, (both of them) can think of a few dozen others.   

I will leave readers to go over the Mox Report article themselves and instead focus on the bottom line results as reported in the company's just released 10K for the year 2017.  I have written before that while the AR/VR space is certainly exciting, in the real world a company needs to  have revenues eventually exceed expenses in order to be viable.  

Vuzix has been around for over 20 years now, so let's see how they did.  Here's the link to the filing: 

For the year ended Dec. 31st 2017 the loss attributable to common shareholders came in at over $21.3 million.  That compares to the previous year when the loss was over $20.8 million.  

There will be a conference call on Monday, and just like last year I expect there will be talk about this being a pivotal year with all the usual forward looking and safe harbor protected hyperbole.  

There's not much more to say here obviously, the business is performing as it has in the past, losing money by the bucket full.  At the end of 2017 the accumulated deficit was at $96.4 million, assuming they've continued losing about $2 million per month that number is already over $100 million.  

If it weren't for the money generated from printing and selling shares into the market.....

Good luck in any case, maybe some more media outlets will write some nice things and help pump the price up again.  

Disclosure.  As mentioned in previous posts, I own VUZI put options.

Friday, February 16, 2018

Investors shouldn't fear higher interest rates

Back on Febuary 6th a subscriber to this blog sent me an email that included the following question:

"Can you do an article on what happens when interest rates rise and investors pull out for more favorable returns through bonds and if we should hold or sell and buy at a lower price"?

The inference is that with interest rates climbing, that means that fixed income type instruments and other vehicles such as bonds, that they'll be more attractive and could lead to people taking money out of the market.  

My opinion?  I'm not worried about interest rates climbing, in fact I consider it to be extremely bullish for stocks.  This is something I've written about before, and its one of the reasons why I think retail investor so often lose out when playing the market.  

Central banks use interest rate policy in an effort to influence the broader economy.  When interest rates drop retail investors will often get excited, thinking that it bodes well for the future because the cost of money is dropping.  Likewise when rates climb some retail players get scared, fearful that higher rates will lead to money leaving equity markets.  

But investors need to understand that when interest rates climb, it means that central banks are bullish about the overall economy.  Conversely when they drop rates, it means that the broader indicators are showing weakness.  The take away is that when you see interest rates climbing higher, in my opinion its a signal to be bullish on stocks, and when rates drop...that's the time to be fearful.

I'll toss in another couple of thoughts on broader market issues. The question from the subscriber suggests that bonds will be offering more favourable returns as rates climb.  Not true, not in the broader bond market.  Understand that with bond yields, the return is inverse to interest rates.  As rates climb bond yields drop, and as rates drop bond yields increase.

Huh?  When interest rates climb bond yields go down???  Yeppers.

Bonds trade like stocks, and there are two things in play.  The interest rate they pay and the coupon value.  Say you hold a $5,000 government bond paying 1.5%. and interest rates go to 3%.  Who's going to want to buy your $5,000 bond paying 1.5% when the ones being issued now pay 3%.  The coupon value (what your bond trades at) is going to drop, resulting in a lower yield.  

The flip side is when interest rates drop.  You're holding that $5,000 bond paying 3% and then rates drop to the coupon value of your bond increases because its paying twice the interest as the bonds being issued currently.

I have money in ETFs and Mutual Funds, but its been over a year since I reduced my bond exposure to 0.  I'll look to move back into bonds when the central banks start signalling that cuts to the overnight lending rate are coming.

Okay....and my last thought, its about the volatility the market has been displaying of late.  My opinion, Fughettaboutit.  The reasons?  The changes to the US tax codes that take affect this year.

Right now we're in earnings season, but the numbers being reported aren't for 2018, they're for the 4th quarter and year end of 2017, before the tax changes came into effect.  I expect we'll be seeing companies taking whatever charges and write downs they can to reflect lower earnings than what might have been foretasted and for the capital markets to continue with the volatility we've been seeing of late.

Why?  Its that old buy low sell high bromide.  To buy low you need others willing to sell low, and nothing makes people more nervous than seeing the value of their holdings drop by 10% or more.  But if some people are scared and selling, there have to be others willing to buy.  

Come June when results from the first quarter come out I expect we'll see improved results, with the benefits of lower corporate taxes starting to show up on the books of profitable companies.  Do note that I'm expressing a broader market opinion here, and its with respect to profitable companies....I'm not commenting on money losing speculative companies.  Companies that are simply adding to their accumulated deficits won't see any benefit to lower taxes on corporate profits, because they don't have profits.

That's it for now.....happy trading, be careful out there and remember, nobody ever goes broke taking profits.  

Friday, February 2, 2018

Vuzix - The reason for my fixation on this money losing and constantly diluting company

A question I'm frequently asked on social media sites like Stock Twits where I post with the user name growacet, is why I'm so fixated on a company like Vuzix when I have such a negative opinion.

Its a fair question certainly, and one I will attempt to explain.

Firstly let me deal with the subject line wherein I describe Vuzix as a company that is losing money and constantly diluting.  Is that factual?  There can be no question that Vuzix is a money losing company, all you have to do is read their filings.  Their last released 10Q quarterly report came out on the 9th of November 2017 covering third quarter results up to Sept 30th 2017.  Here's the link:

Just The Facts
All you have to do is a Ctrl F search for the "loss attributable to common stock holders" and you'll see that for the three months ending Sept 30th 2017 the company reported losses of over $5.9 million.  For the 9 months ending September 30th the losses come in at over $15 million.  

So depicting Vuzix as a money losing company is certainly accurate.  But what about constantly diluting?  

That will depend on one's definition of "constantly".  Obviously Vuzix isn't printing shares every single day of the week.  You might have a friend who is "constantly borrowing money" from you.  For some that might mean getting hit up every week, for others being asked 3 or 4 times a year for cash to "tide me over" would qualify as constant.  

So how often is Vuzix hitting up investors to raise much needed cash?

Dilution Dilution Dilution
-On August 9th 2017 the company announced raising a little over $8.6 million less fees and commissions by issuing 1,500,000 shares.  

-Then on December 14th 2017 they raised another $12.5 million, again less fees and commissions, by issuing another 2,066,116 shares.  That raise included issuing 1,033,058 warrants priced at $7 per share which can be converted 6 month after being issued.  This is significant because if Vuzix can manage to keep its share price above $7 into the summer then those warrants would be "in the money" which could result in further dilution.  Of course if VUZI falls back below $7, then they're basically worthless.

-The most recent raise was announced Jan 24th of 2018.  This one was for $30 million, and again that's less fees and commissions, by issuing 3,000,000 shares.  They also issued 1.2 million warrants with an exercise price of $10, but given the drop in the PPS those warrants are obviously well out of the money.  

So in less than 6 months Vuzix did three raises, issuing 6,566,116 shares raising a little over $51,000,000 less fees and commissions.  I don't know if everyone would qualify that as "constantly diluting", but its close enough in my books.  Especially considering there are warrants still outstanding.  

Then of course there's Intel's position, back in November of 2016 they ended their headset partnership and disclosed that they were looking for alternatives for their investment in the company.  If they liquidate you can add another 5,000,000 shares to the pile on conversion.  If that happens there won't be a cash infusion coming, Intel's $25 million from 2013 must be long gone or the company would not have needed to keep printing more and more shares.  After all, the accumulated deficit up to Sept 30th 2017 was already over $90.5 million.

Alright, I hear what you're saying.  I still haven't explained my fixation on this company.  All I've done is present some simple factual data which anyone with the time and inclination can research and verify.  

And that's what it comes down to.  Simple facts.  I love the capital markets the same way some people love politics.  When it comes to political arguments you see people fixated on an issue or a personality all the time.  Maybe never more so than with the battle between supporters of Hillary Clinton and Donald Trump in the most recent U.S. presidential election.

Why do people get fixated on Donald and Hillary?  I put it down to ego engagement, they want to express their opinion.  And personally I don't have an issue with someone supporting Clinton or Trump, but I do get my shorts in a bit of a knot when people misrepresent simple facts.  

Imagine a Hillary supporter saying:  "The fact is Hillary Clinton has never reversed herself on any position and has never accepted money from big business interests".  The Trump supporter's head would probably explode, mine too.  Or if a Donald fan said:  "The fact is Donald Trump holds women in the highest regard and has never used sexist language to describe any woman". You'd have to be living under a rock to not know how out to lunch that statement is. 

Support Clinton or Trump, I don't care because I thought (and still think) that they both suck. But for God's sake don't distort or simply ignore basic facts just to get people to agree with your point of view. 

The same thing holds true with a company like Vuzix, don't distort or ignore factual reality just to get people to risk money on the stock. That's what I see every day on stock forums and social media sites like Stock Twits.  

Of late I've been crossing swords with a user who posts with the name cthompson.  This individual loves to post about things like a "buyout" like there's an actual deal on the table, instead of just a mindless pump pulled out of his nether regions. Others tout Vuzix as having "solid fundamentals".  How you can describe a company that does three cash raises totalling over $50 million in roughly 6 month as being fundamentally solid is beyond my comprehension.

So put it down to ego engagement, that's why I fixate on a company like Vuzix.  My opinion is that this company is using promotional IR firms to get investors excited about a business that ultimately is not viable.  And when the PPS climbs big, there are individuals who think that a rising PPS confirms that the company's prospects must be good.

What does viable mean?  For me it means a business that is able to generate sufficient revenues to cover expenses with profits left over, if not now at least sometime in the next few years.  Others may view viable as meaning having an idea or a product capable of exciting investors enough for them to finance huge losses year after year, by this definition Vuzix is very viable in my opinion.

Its always nice to have some skin in the game of course.  Shorting though is an incredibly risky proposition.  

Some people caught onto the fact that Nortel was a disaster waiting to happen when it was trading under $100 per share.  Another example would be Cynk Communications when that company was trading for $5 or even $10 per share.  Followers of the tech space know neither of those two stories ended well for those who bought and held on until the bitter end.  

But those who decided to sell short, even though their opinions were ultimately right....if they shorted Nortel when it first climbed to $80 or CYNK when it first went to $5 or even $10, they faced huge losses.  

Rather than going short by borrowing and then dumping shares back into the market, and exposing myself to potentially big losses as happened to Nortel and CYNK bears when those stocks got pumped to high heaven, instead I own put options.  With futures contracts like puts the risks are far less, and there's an absolute floor in terms of the potential for losses.  Short sellers on the other hand, theoretically at least the potential for losses is limitless.

I know that, even if I'm ultimately right in my opinion that Vuzix will never realize significant enough revenue to be earnings positive, that doesn't mean the stock still can't get pumped sky high.  All it would take is for a media personality with a big following to tout an investment in Vuzix as rock solid.  

I remember back in 2005 and 2006 when some sharp minds saw what was coming to the US housing market.  Still there were media "experts" out there telling people that buying a house was the best investment they could make, and as housing prices continued to climb the naysayers were trashed.

So go ahead Vuzix pumpers, trash me all you like.....but in the end I don't see this ending well.  With stocks its a zero sum game, some people will end up with shares, others will end up with money.  

Good luck, here's hoping my readers put cash in the bank.

Friday, January 26, 2018

Vuzix - Shareholders should be thrilled (VUZI)

On Wednesday January 24th 2018 Vuzix announced a share offering that raised $30 million for the company after the market had closed.  If you missed it here is a link to the news:

Buyers had pushed shares of VUZI markedly higher before the news came out, paying as much as $11.40 per before the PPS settled at $10.80 at the closing bell on Wednesday.  One day later the PPS traded as low as $9.45 before recovering a bit to close at $9.75 for a one day drop of almost 10%.

The perplexing question is obvious....Why?  Why did the stock sell off causing the drop?  I can only assume that a significant number of shareholders were unhappy with the dilution.  

That suggests to me that a lot of investors failed to do adequate research before buying their shares.  In my opinion those who've done their research and due diligence before investing in Vuzix were not surprised by the dilution.  In fact they should have expected it.

Obviously researching a potential long term investment involves a lot more than simply reading over recent press releases.  Due Diligence isn't just scanning a company profile put out by some IR outfit that's being paid to promote a company. 

A bullish sounding PR may bring a company to an investor's attention.  A sharp looking video presentation might spur some interest.  Experienced investors know that PRs often talk up the potential for the future, but forward looking statements are not material representations of fact and cannot be relied upon.  Companies hired to attract investors will punctuate the positives, while either glossing over or completely ignoring any of the negatives.

Real research for me involves looking at a company's SEC filings, perhaps even researching the business background of key executives like the CEO.  Knowledge of the industry or space is obviously helpful.  If a brewing company is planning a big expansion into some place like Saudi Arabia, it might help to know that the Saudi kingdom has a ban on alcohol.

One quick note before I continue.  

I am writing this blog posting from the perspective of an investor who is looking for long term success in a company.  I'm not approaching this from the point of view of traders simply looking to scalp shares at a profit.  For those who play momentum, or who like to swing back and forth between long and short should probably stop reading right now.

Frankly in depth research is likely a waste of time for those simply looking to buy the dips and sell the rips.

Those looking at Vuzix as a buy and hold long term investment should already be aware of the fundamental realities.  The last 10Q came out November 9th just passed and reported the results of the 3rd quarter up to September 30th 2017.  Here's the link:  

Simple factual data from that filing is there for anyone who takes the time to look.

  • Shares totalled 22,203,911 as of Sept 30/17 up from the 20,674,742 issued as of June 30/17
  • Up to Sept 30/17 the accumulated deficit was $90,592,988
  • Loss attributable to common stockholders came in at ($5,937,563) for the quarter
  • Cash and cash equivalents totalled $8,677,341 as of Sept 30/17

Basically this paints a pretty clear picture for me.  Vuzix is a cash poor company with insufficient revenues to cover operating expenses.   This isn't a Google or Apple with billions of dollars on the balance sheet to spend on product development.  

Those who've done their homework on Vuzix already know that as of May 15th 2013, in the first 10Q after a 1:75 share consolidation, the company reported only 3,536,586 shares outstanding.  So its clear how the company funds operations, by share offerings.  

From Sept 30th 2017 to present I haven't seen any news about actual sales.  Yes there's been lots of reports about hopes of building relationships and about deals that "may" happen.  But anything that "may" happen...its reasonable to think they also "may not".  

Given that the company burned through almost $6 million in the three months leading up to Sept 30th, I think its reasonable to assume they've burned through at least that much in the 3+ months since Sept 30th, and probably more.  That would have meant that without further dilution the cash available would have been getting very low.  

Now they've raised $30 million with this most recent offering, on top of the $12.5 million they just raised in December 2017.  I don't have a PHD in advanced mathematics, but I make that to be a total of $42.5 million raised in a little over 1 month.  

That is pretty impressive in my books.  Even if they start losing $10 million every 3 months going forward they now have enough money raised to last another 12 months.  Shareholders with a long term view who are willing to take on the obvious risks should not have been surprised.   

I own put contracts, which is a way of playing the short side.  Obviously that means my overall opinion is bearish.  With that being said with all the money they've been able to raise Vuzix is going to be around for a while yet, and if they actually do start realizing signficant sales they could even become profitable. 

If they don't?  Eventually I expect the pool of investors willing to risk money on forward looking promise to shrink.