YB new stock pitches (Wed, Jun 18)

Frequency Electronics (FEIM) is the dominant U.S. leader in precision time and frequency solutions for space applications, with vertical integration and no domestic competitors. The company benefits from multiple growth catalysts: satellite proliferation (projected to reach 42,000 LEO satellites within 7 years), the Golden Dome missile defense initiative ($500B+ estimated cost), and a promising quantum sensing business through partnerships with Leidos and MIT Lincoln Lab. Despite these tailwinds, FEIM trades at 13.85x LTM EV/EBITDA, its lowest level since 2016, while backlog has grown from $53M to $73M year-over-year. Management owns 26% of the company, with an additional 19% held by Edenbrook Capital, ensuring strong alignment with shareholders. The company has the potential to grow revenues at 10-15% CAGR through 2030 as the atomic clock market expands from $600M to $1B and quantum sensing applications mature. Key risks include government contracting dependence (98% of revenues), limited TAM for atomic clocks due to national security constraints, and potential competitive entry from well-capitalized players like Microchip.

Read the full article here. Read time: 14 min

Neonode (NEON) has reached a settlement in principle with Samsung in their patent lawsuit, with final details expected within 30 days. The timing of the settlement, occurring between Fact Discovery and Expert Discovery phases, suggests NEON had strong evidence, possibly a 'smoking gun' discovered during the May 19 Discovery Dispute hearing. NEON's estimated settlement could reach approximately $40 per share from Samsung alone (assuming 1 billion units, $4 per unit, 50% haircut, 33% gross proceeds, and 17 million shares outstanding), with a gross settlement of $1 billion equating to roughly $20 per share. The company's lawsuits against Apple and Google remain pending, with the Apple case expected to resume once the Samsung settlement is finalized. The current stock price appears not to fully reflect the potential value from all settlements, the core business, and net cash. NEON's board members have significant experience and skin in the game, suggesting any settlement proceeds will be distributed to shareholders in a timely manner.

Read the full article here. Read time: 4 min

WM Technology (MAPS: NASDAQ) presents an asymmetric opportunity at $1.02 per share (2.6x FY25 EV/EBITDA) following a non-binding $1.70 take-private bid from original founders Doug Francis and Justin Hartfield (who own 39.5% combined) that has stalled for six months despite their initial promise of a 3-4 week timeline to a definitive agreement. The founders are likely deliberately delaying to depress the share price, creating investor fatigue to ensure eventual deal acceptance on favorable terms while avoiding SEC scrutiny. Notably, CEO Francis received a highly conflicted 8.7 million share grant (5.2% of shares) with Change-in-Control terms in November 2024, after a confidentiality agreement regarding a potential transaction was already in place in October. Weedmaps, the largest online marketplace connecting U.S. consumers with licensed cannabis businesses, has stabilized with expanding EBITDA margins ($45M projected for FY25), $53M in net cash, and is positioned for significant growth if cannabis is reclassified to Schedule III. The investment thesis offers upside to at least $1.70 (or potentially higher) if a deal materializes within 6-12 months, with downside protection given pre-deal announcement trading levels around $1.40 in early December 2024.

Read the full article here. Read time: 18 min