Energous Corp Stock Is at Risk for a Reality Check


WATT stock - Energous Corp Stock Is at Risk for a Reality Check

Source: Energous

One of the hottest names right now is Energous Corp (NASDAQ:WATT), although you wouldn’t know it from a strictly calendar basis. Year-to-date, WATT stock is down nearly 24%, an intractably disastrous start under any other circumstance. But if Energous shares started its run-up a few days later, we would be reading a different story.

OThe reality is that since Dec. 26 of last year, WATT stock has skyrocketed to a ridiculous 88% haul. That’s including the massive selloff that occurred three days later, when in one session, shares plummeted more than 36%. The bulls are especially confident that despite some hiccups, WATT is the real deal, and why not?

Society is rapidly moving towards a wireless world. Concepts such as Software as a Solution are untethering us further away from physical platforms and into the cloud. Therefore, it was only an inevitability that tech firms would bring us wireless charging. After all, who wants wires? With Energous promising a hands-free solution, the rise in Energous stock appears justified.

That said, looks can be very deceiving. Much of the enthusiasm surrounding WATT stock is that it’s the first of its kind. Smartphone manufacturers like Apple Inc. (NASDAQ:AAPL) and Samsung Electronics developed their own wireless charging innovations. They, however, require a charging pad. Energous’ WattUp product does not.

Thus, the company has a first-to-market advantage, causing early-bird investors to buy up Energous Corp stock. Although the sentiment is certainly understandable, I’m not sold on this opportunity.

For starters, first-to-market isn’t always a guarantee for success. Second, if this idea takes off, it’s only a matter of time before the big dogs produce their own variants. But the safety issue is what really puts me off Energous Corp stock.

Energous Is Safe, which Is Bad for WATT Stock

Just recently, the Federal Communications Commission certified the company’s WattUp product which is a near-field transmitter. According to the FTC, the product meets safety and regulatory standards, as well as electromagnetic compatibility. On cue, WATT stock closed out the day of the announcement up over 5%.

Obviously, if you’re shorting Energous Corp stock, this is not the news for which you were hoping. Nevertheless, I personally believe that WattUp is unsafe, and I’m not alone in my opinion. When the technology was first introduced, a technology executive on condition of anonymity stated, “I don’t think I would want to be in a room with free moving power signals.”

Before you label me a conspiracy theorist, please note that the correlation between smartphones and cancer rates are still being studied, and that’s just usage. We’re talking about charging your batteries, which is a whole new dimension. If you still think I’m nuts, go complain to the National Cancer Institute.

But here’s where it gets ugly for Energous stock: if indeed WattUp is safe, there is no way in heck that it’s efficient as claimed.

Let’s just use common sense, people. Electrical wires exist for a reason – they deliver electricity directly to your devices. With WattUp, energy that is powerful enough to charge your device is delivered through the environment, and anything in it, including your body.

The FTC says this process is safe. I’m sure that multiple health agencies would argue that it’s too early to make such pronouncements. But you know what’s faster, safer, and much, much cheaper? You guessed it! That physical wire that you hate so much.

What’s the Point Behind Energous Corp stock?

To be clear, my belief that WattUp is dangerous is strictly my opinion. However, it’s also science. Your battery doesn’t just recharge on its own. Somehow, energy must transmit from source to target. The question for you is whether you want this energy insulated or out in the open.

Another point you want to consider before buying Energous Corp stock is how much the company dumbed down their product. To meet safety requirements and to avoid potential litigation, WattUp has to be fireproof. If a technology this exotic is supposedly super-safe, its effectiveness must necessarily decline.

Which then leads me to ask a fundamental question: what’s the point of Energous stock? Are people really that lazy that they’ll risk possible health concerns to avoid wires? To me, this is a technology developed for its own sake. I see no substantive benefit. If one arises, Apple and Samsung stand ready.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Article printed from InvestorPlace Media, https://investorplace.com/2018/04/watt-stock-reality-check/.

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