CES 2022 Day 3 – Fold and folding

Displays – Fold

• Samsung Display has led the field this year launching its first Quantum Dot (QD) OLED TVs as well as showing a new take on foldable screens.
• The QD TVs will go on sale later this year at the top of the price range but the new foldable screens are likely to prove just as fallible as all of the others.
• Here Samsung demoed new screens called the Flex S and Flex G (see here) which are foldable screens with two folds each and can be folded up like an accordion.
• This is a way to get a really large screen to fold up and be carried around which I have long believed has the scope to permanently kill off the tablet market.
• However, like all foldable screens before them, both the Flex G and Flex S protective layers are made of plastic which enables folding but is also notoriously easy to scratch and damage.
• Samsung is trying to get around this problem by making the screens fold so that the screens are on the inside when closed but as its commercial devices clearly demonstrate, this is not an adequate solution.
• Hence, while the Flex S and G are clearly cool to look at and dream of owning, they are functionally useless until this very sticky problem can be solved.
• I remain bullish on foldable screens long-term just as soon as this hurdle can be overcome.

EVs vs. share price – Danger of folding

• EV and EV-related products and services are everywhere this year and while it is all good news and optimism on the show floor, the stock market is telling a very different story.
• The Fed’s increasingly aggressive rhetoric on inflation has caused bond yields to rise which has hammered the riskier end of the stock market.
• This has taken the EV-related stocks which de-SPACed with much fanfare last year to deepen their malaise.
• This has hit both the good and the bad companies equally with many now trading more than 50% below the price at which they listed.
• Even the high-flying Rivian is now more than 50% below its peak but still overvalued in my opinion.
• The problem that many of these companies face is that even their optimistic forecasts given at the time of listing require them to come back to the market for more money to reach cash flow break-even.
• At current levels, this will mean substantial dilution for the existing shareholders and a lot of unhappiness and potential unrest.
• Hence, I think that there will be a period of great consolidation where those with cash will buy up those that have run out.
• This has already begun to some degree, and I think it will accelerate in 2022 if current market conditions persist or worsen.
• As always, the good companies are being thrown out with the bad creating great opportunities for stock pickers with strong stomachs.