Universal Display Corp Board less than impressive. $OLED

Much controversy about Universal Display Corporation. Huge shouting match of the loud and rude variety is underway.

The company offers the promise of exciting breakthroughs in lighting technology. Apologies to scientists for a pedestrian explanation but if it pans out its a big thing.

When companies go into warp speed and reach the next level they typically beef up the board and load in excellent talent with experience and gravitas.

The current board composition is unimpressive. The independent directors do not bring a wealth of experience to the table. A snap shot of a few independent leads to these comments:

Leonard Becker age 89 is a real estate wheeler-dealer. Other than buying lighting for his real estate projects what is he bringing to the table.

Elizabeth Gemmill age 67 has a history of non-profit boards. Very noble but this is a business. I want to see the money.

C Keith Hartley age 70 is a Wall Street wheeler-dealer. But there is no history of connections that can be leveraged. Sort of looks good to have a Wall Streeter on the board. But not enough catalyst to propel the company forward.

Lawrence Lacerte age 60 who has a background as a wheeler-dealer in tech and internet ventures.

None of the four independent directors has ever played at the level Universal Display is at or claims its going to. Time for a governance rethink. If you do not see this board changing soon you will know that management is comfortable with a captures board who does not ask tough questions.

In short they will not be able to go to the next level.

George Gutowski writes from a caveat emptor perspective.

Universal Display Needs New Catalyst or the Fat Lady is Going to Sing $OLED

Universal Display Corp is the subject of a rather loud and rude shouting match between Bulls and Bears. Much commentary is emotional and I mean emotional. Lots of traders are locked in deep; very deep. The emotional attachment is too strong and will only acerbate volatility in the near future.

The Bears claim the emperor wears no clothes and this will all collapse sooner rather than later. They point to an SEC investigation of accounting for payments from Samsung. We’ll see.

The Bulls claim the technology is fantastic and we are going to the moon.

The forward PE is astronomical at around 31. So what’s left. A huge takeover offer at a big premium should have already happened if the technology is so great.

The short interest has dropped by about 4.46%. The overall short level is a snick over 8 million shares. The ratio of short to public float sits at 23.96%. The nascent bullishness of a big short position is dropping but still not out of the danger range for the shorts.

While the company is making positive announcements nothing has succeeded in moving the stock north of $40. If the company cannot serve up some event-driven circumstance the stock will have a hard time justifying higher valuations. Excitement will wither and the stock will drift then drop down.

RSI looks like a car driving over a cliff.

Looks like the shorts and bears will prevail unless management can sting them somehow. Given the scrutiny management needs to come up with something very very good.

George Gutowski writes from a caveat emptor perspective.