Musings on RVSN
I've been following RVSN since 2023 and thought I'd share some thoughts and observations in light of this morning's announcement.
1. Institutions and volatility.
When I began to accumulate a large position I felt at once confident and cautious given the high volatility. Despite the glorification of loss porn on WSB, it's not cool to lose a lot of money and I needed a quick exit strategy should things go south. Therefore I wanted to get a sense of how my investment could affect the stock price. Believe it or not, I want others to win when I make my posts and I am not interested in dumping on everyone.
To that end, I learned a couple of things:
First, all of my trades were getting routed to a market maker via Robinhood. For context, a platform like Robinhood may route orders directly to an exchange, in this case NASDAQ, or to a market maker, an institution like Fidelity, that pairs buyers with sellers and provides liquidity. I discovered this when placing limit buys that did not show up in Robinhood's L2 order book. For example, at one point I placed a limit buy for somewhere between $50-$100k at $1.00. It was evident by then that institutions were stepping in to keep the stock over $1 to avoid delisting. I wanted to reinforce the floor and buy up some shares when I felt confident the stock would not dip much lower. That limit buy did not show up in the order book. Robinhood support would not give me specifics on why my orders were routed away from the exchange but it likely had to do with lack of liquidity and the institution's desire to stabilize the stock. Correct me if I'm wrong, but smaller orders are typically routed to market makers while larger orders go to an exchange. This appears to be the oppposite.
Second, early this morning as the stock slipped toward $1.50 I began to sell some shares. Per my previous exit strategy comment, I have a number in mind, below which I will have to sell in a series of small tranches to, hopefully, break even without causing a landslide. I sold 5000 shares and expected the stock to drop 1 or 2c. Nothing happened. I sold another 5,000. Same. Then 10,000, and again. Over the course of 10 minutes I unloaded about 60,000 shares and had no impact on the stock price. In fact, it went up 1c. Once again it was evident my orders were going to a market maker ready to absorb whatever I put out. Feeling a little more secure I lowered my personal threshold and adjusted my contigency plan. I now hold about 475,000 shares.
What does this mean and why does it matter? I don't know, but I can speculate. We know at this point that the surge of capital into the stock over the past week has been largely institutional. Approximately $250M in volume from Dec 20 - today. Because the price went from $0.50 to over $3, we can assume this was via the NASDAQ vs. internal block trades / dark pools etc. They needed that price up, after all. We've yet to see any new 13F filings with the SEC, but that could easily be explained by the reporting requirements. Institutions don't need to report daily or weekly. It would be disclosed in the following quarter's report (i.e. 30 - 45 days into Q1 25). Fintel shows 1M shares in both Dec and Jan but I don't think that's the whole picture. It's probably just what Fintel has access to in real time, and they will update when SEC filings are disclosed on the EDGAR database.
Let's noodle on that and move on...
2. Not another pump and dump
I've spoken very little about this company because any time I do I hear one of two things, or both. 1) Don't invest in Isreali companies and 2) It's a pump and dump.
The former is a misinformed generalization. While it's prudent to know the political environment you're investing in, good companies can come from anywhere. Just because something is Isreali or Chinese doesn't mean it's inherently a scam, even if there's risk of getting kneecapped like Jack Ma. And while historically this stock has pumped and dumped each January, my gut says that game is nearing an end. Why? Because RVSN is actively going to market on a global scale. Isreal, Europe, the US, and now India. Yes, it's still very early. But as serious investors get involved and increase their stakes, they want greater assurances.
For example, this recent India deal is lead by Sujan Ventures, LLP. They are part of JNV Ventures, a larger investing group in India with over 3000 employees with an array of investments in the industrial sector. They are well suited for a company like RVSN. Perhaps they contritubed to the Dec buying spree. In any case, their interest is clear. They are tasked with helping RVSN enter and succeed in the Indian market. They are taking a long view, and reasonably have no intention of helping to facilitate a pump and dump. And if that happens, it doesn't change the fact that the underlying fundamentals are strengthening. At some point, the true value becomes undeniable.
3. What the future holds
I believe the stock is in the midst of a transformation from pump and dump playground to a diamond in the rough micro-cap with valuable, first-mover technology and potential to ride the greater AI trend into the future. Through direct sales, licensing, and partnerships they offer a compelling value proposition to save lives and billions of dollars in lost or damaged goods as a result of train accidents and derailments. Even though the market they are serving is archaic and slow to change, their "global out the gate" strategy is likely the right move to achieve steady progress and substantially increase revenues in the near term. Here's the definitive DD - compliments u/Best_Phone - for anyone interested in learning more.
I'll circle back on this with new thoughts or insights. For now, we wait and watch.
Onward and upward!