As drones and other robotics-based devices become integrated into everyday use, ensuring their security has never been more important. That’s what’s driving the core narrative behind Mobilicom (NASDAQ:MOB). The device-specific cybersecurity company closed its initial public offering (IPO) yesterday, leading MOB stock to jump double digits this afternoon.
Interestingly, Mobilicom went through multiple revisions of its new listing terms. Originally, the company intended to raise $10 million through the distribution of 2.2 million shares at an IPO price of $4.65. Later, though, it upgraded the terms to raise $12 million through the distribution of 1.6 million units at $7.43. Then, yet another adjustment called for Mobilicom to raise gross proceeds of $11.8 million at $4.13.
When the dust finally settled, the company ultimately raised $13.3 million before deducting underwriting discounts and offering expenses. Mobilicom also distributed 3.22 million units. The IPO price of MOB stock came out the same as the prior adjustment, $4.13, while each unit consisted of one American Depository Share (ADS) and one warrant to purchase one ADS.
ThinkEquity acted as the “sole book-running manager for the offering.” Per its press release, Mobilicom “intends to use the proceeds of the offering for expansion of its sales and marketing activities, research and development, and working capital.”
MOB Stock Is Intriguing, But Largely for the Speculator
While today’s performance for MOB stock is impressive — up 25% as of this writing — ground floor investors may not feel so. That’s because, with shares currently trading hands around $3, the stock has slipped well below the IPO price.
Longtime investors shouldn’t be too surprised. At the original terms, Mobilicom would have commanded a market value of $20 million. Even with the various adjustments, the company remains a nano-cap play.
At the same time, though, it’s also not shocking that hardened speculators targeted MOB stock. The underlying total addressable market is massive here. For instance, experts project drone sales in the U.S. to hit $1.22 billion by the end of 2022. For years, Goldman Sachs has projected a $100 billion total market opportunity for drones as well, “helped by growing demand from the commercial and civil government sectors.”
Naturally, with so many remote and automated devices on the road and in the air, cybersecurity concerns run paramount. Government agencies and thinktanks have also sounded the alarm about cyber threats affecting drones more and more. So, it’s only a matter of time before drone cybersecurity becomes mainstream.
Whether MOB stock can emerge as an industry leader remains to be seen. Speculators may be enticed, but due diligence remains a top priority when it comes to Mobilicom.
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On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
