Sunday, July 13, 2014
SENSIO Now A Takeover Candidate
SIGNIFICANCE OF THIS WEEK'S DEAL WITH LG
On July 8, 2014 SENSIO announced that it inked a deal with LG to put their 3DGO! streaming app on LG CINEMA 3DTVs in over a dozen countries worldwide.
SENSIO signs an agreement with LG for the international deployment of 3DGO! on CINEMA 3D Smart TVs
This marks the third manufacturer (following Vizio and Panasonic (PC)) to sign onto the 3DGO! platform - but the first to expand beyond the United States. In the United States alone the LG deal should more than double SENSIO's potential market when it launches in October giving SENSIO access to around 40% of all 3DTVs in the US. When the global roll out begins in December SENSIO's customer base will continue to grow as more and more countries are added.
More importantly, the global roll out of 3DGO! will give SENSIO something nobody else has: A global user base of active 3D consumers. Until glasses-free 3DTVs become mainstream (likely still years away) 3D in the home will continue to be a niche market. But niche markets can be extremely valuable if they can efficiently be tapped into. SENSIO's 3DGO! provides that medium. Potential suitors would include names like Netflix (NFLX), Amazon (AMZN) and RealD (RLD), among others.
Existing deals with top named studios like Disney, Paramount, IMAX, and others give SENSIO instant credibility and recognition. In fact LG plans to use characters from these studios to help promote sales of their 3DTVs via SENSIO's 3DGO! in retail stores when they launch later this year.
SENSIO's existing patents also provide further support to SIO's valuation. SENSIO currently has 15 issued patents and 21 pending. Key among those patents include:
Hi-Fi Format - Ability to compress and transmit Bluray quality 3D streams across existing 2D cable, satellite and internet infrastructure.
S2D Switch - Ability to convert any 3D video into 2D video.
AutoDetect - Ability to automatically detect any 3D format (SENSIO Hi-Fi, side-by-side, top/bottom, etc) and automatically convert the stream to a 3D video without the need to navigate 3D menus on the 3DTV.
Global Maxfin estimates that SIO's patents alone are worth $0.13-.40/share.
As of Friday shares of SIO were trading at $0.30/share. This week Global Maxfin increased their price target from $0.50 to $0.75 based on the LG deal and maintain a 'Strong Buy' recommendation on the stock. Following the LG deal this week SENSIO also announced a S2D patent deal with Sony (SNE) which further supports this valuation.
SENSIO SIGNS LG FOR 3DGO! TRIPLE PLAY
SENSIO® S2D Switch Patents Licensed to Sony by WiLAN
Going forward expectations are for more CE manufactures like Samsung and others to license the 3DGO! app from SENSIO. As these deals are announced SIO's valuation potential will only continue to rise as they continue to capture more and more share of the global 3D market.
And with virtually every 3DTV manufacturer currently utilizing technology covered by SENSIO's S2D Switch patent we should expect a number of new S2D deals to be announced in the coming weeks/months through SENSIO's patent agreement with WiLAN (WILN).