WiSA Technologies, Inc. (WISA)

WiSA Technologies, Inc. (WISA) is a company that specializes in developing and licensing wireless audio solutions for consumer electronics. The company was founded in 2011 and has since been dedicated to providing high-quality audio experiences that are free from wires, cables, and complicated setup processes. WiSA's technology is based on a wireless standard that allows for high-resolution, multi-channel audio transmission over a robust wireless network. In this essay, we will discuss the business of WiSA Technologies, Inc., and why they are a good investment.

The Business of WiSA Technologies, Inc.

The wireless audio market is a rapidly growing industry that is expected to continue expanding in the coming years. WiSA Technologies, Inc. has positioned itself as a leader in this space by offering a unique solution that is designed to provide high-quality audio without the need for cumbersome cables and wires. The company's technology is based on a wireless standard that is capable of transmitting high-resolution audio up to 24-bit/96kHz with extremely low latency and no interference. This makes it an ideal solution for a wide range of consumer electronics, including soundbars, speakers, and home theater systems.

One of the key advantages of WiSA's technology is its ease of use. Consumers no longer need to worry about running wires through their homes or dealing with complicated setup processes. WiSA's wireless audio solutions can be set up in minutes, and they offer a plug-and-play experience that is simple and intuitive. This has helped the company to gain a strong foothold in the market, with its technology being integrated into a wide range of products from leading consumer electronics brands.

WiSA's business model is based on licensing its technology to third-party manufacturers. This allows the company to focus on developing its core technology and providing support to its licensees, while also ensuring that its solutions are widely available to consumers. WiSA has built a strong ecosystem of partners that includes leading consumer electronics brands such as LG, TCL, and Bang & Olufsen. These partnerships have helped to drive adoption of WiSA's technology and have positioned the company for long-term growth.

Why WiSA is a Good Investment

WiSA Technologies, Inc. is a good investment for several reasons. First, the company operates in a rapidly growing market. The wireless audio market is expected to grow at a compound annual growth rate (CAGR) of 18.6% from 2020 to 2027, according to a report by Allied Market Research. This growth is being driven by factors such as the increasing popularity of streaming services, the rise of smart homes, and the growing demand for high-quality audio experiences. WiSA is well positioned to benefit from this growth, given its leadership position in the market and its strong ecosystem of partners.

Second, WiSA's business model is highly scalable. The company's technology can be easily integrated into a wide range of consumer electronics products, which means that its potential market is vast. By licensing its technology to third-party manufacturers, WiSA can quickly scale its business without incurring significant additional costs. This allows the company to focus on developing its core technology and providing support to its licensees, while also generating recurring revenue from licensing fees.

Third, WiSA has a strong track record of partnerships and customer adoption. The company has built a strong ecosystem of partners that includes leading consumer electronics brands, and its technology is already integrated into a wide range of products. This demonstrates that the market is receptive to WiSA's solutions and that the company has a clear path to growth. WiSA has also won numerous awards and accolades for its technology, including the 2020 AV Awards "Best Technology for Commercial Installations" and the 2019 CES Innovation Award.

Fourth, WiSA has a talented management team with a proven track record of success. The company is led by Tony Ostrom, a seasoned executive with more than 25 years of experience in the consumer electronics industry. Ostrom has held leadership positions at companies such as Harman International, LG Electronics, and the Consumer Technology Association, and he has a deep understanding of the market and the challenges that come with scaling a technology business. WiSA's management team also includes experts in areas such as technology development, product management, and business development, which provides a strong foundation for the company's continued growth.

Finally, WiSA has a strong intellectual property portfolio that includes numerous patents and trademarks. This provides the company with a significant competitive advantage and helps to protect its technology from infringement by competitors. WiSA has also been actively expanding its IP portfolio, with several new patents filed in recent years. This demonstrates the company's commitment to innovation and its ability to continue developing new and innovative solutions for the wireless audio market.

Financials

WiSA has been consistently reporting losses over the last few years, but their revenue has been growing nicely.

Looking at some key liquidity ratios, their business seems to be in decent shape in that regard as well.

Chart

Below is their 5-year chart. My first thought when I see numbers this big is "reverse stock split." Sure enough, they've had two. The first was 1:20 in 2020 and the second was 1:100 in 2023.

They IPOed in 2018 at $5 so those original holders (if any are left) are down somewhat.

I hate seeing this.

Conclusion

In conclusion, WiSA Technologies, Inc. is a company that operates in a rapidly growing market and has positioned itself as a leader in the wireless audio space. The company's technology is easy to use, highly scalable, and has a strong track record of partnerships and customer adoption. WiSA has a talented management team, a strong intellectual property portfolio, and is well positioned for long-term growth. For these reasons, WiSA is a good investment for investors looking to capitalize on the growth of the wireless audio market and the increasing demand for high-quality audio experiences. However, and this is a big however, their history of reverse stock splits does not bode well for the future. I am very leery of companies that have to resort to this questionable tactic.