IRIX Concludes Strategic Review Process
And announces a strategic investment in the company
About 18 months ago, IRIDEX (IRIX 0.00%↑) announced a strategic review process under which the clear implication was the company would eventually sell all its assets at a premium to the company’s share price (roughly $1.50/share at the time). I was enthused about this process as I anticipated the company could sell its assets for at least triple that $1.50/share price. Multiple articles written by me here and elsewhere demonstrated why I held that belief. These reasons included a deep review of the company’s filings with the SEC, as well as the fact that Topcon invested in the company previously at a price of $6.18/share.
Long story short, my investment into IRIX has been a disaster to date. Although many opportunities existed along the way to sell at large gains, I held my position, firmly believing the company’s assets exceeded the share price. According to trusted sources and its own press releases and conference calls, IRIX was, in fact, extremely close to demonstrating its assets were worth more than the market valued them; or at least they were to one possible acquirer. Unfortunately, that deal fell through at the last minute, as nearly as I can tell. Still, I held my shares, believing that IRIX would have a favorable conclusion to its strategic review process.
Well, today, that strategic review process has officially ended, according to the company’s press release this morning. Was that strategic review process successful? The market today is clearly and loudly telling us “NO!” Did the strategic review process end in the way I hoped? Absolutely not! And I don’t think the company preferred this ending either. However, the question today—putting aside the emotion of disappointment—is this: is IRIX today a buy, hold, or sell? Of course, I am not an investment advisor, so I can only answer that question myself—as should anyone reading this article. I will discuss below what I’ve been wrestling with today and the decision I’ve reached, which I believe is logical, and not emotional.
Before getting into those thoughts behind the paywall, let me point out a quite obvious fact that another astute investor noted in our free Breakout Investors WhatsApp room today: Novel Inspiration International (“Novel”), an investment company founded in 2020 by William Moore, a former Board Member and CEO of IRIX, clearly believes IRIX is worth more than $2.00/share based on its $10M investment announced today at that price. For those doing the math at home, that $2.00/share strategic investment is well more than a double from current share prices!
So, why might William Moore think that IRIX is worth more than that $2.00/share price, and what might we consider that would lead us to believe IRIX is worth significantly more than the current market value? And what are some reasons to believe IRIX could be a sell, even at these prices?