u/Unique-Helicopter955

I see many people on this sub with a high cost basis saying things such as:

"I'm going down with the ship" or "the stock price is very low, so there's no point in selling"

The problem is that you are most likely not going to get your money back at this point. As a result, you will significantly underperform the major indices.

The simple reason why is dilution. When a company raises money from investors, previous investors suffer as the share count rises.

Think about it like this:

In 2022, you bought HUMA at $5 with 103m shares outstanding ($515m market cap)

Today, HUMA is $0.60 with 270m shares outstanding ($162m market cap)

For the stock to reach your break-even cost of $5, the market cap as of today must be $1.35b (270m shares * $5 cost) with the share count remaining stable (most likely not going to happen).

This company burns roughly $20m each quarter and will need to raise capital later this year or early-to-mid 2027. Assuming they raise the equivalent amount as the last dilution event at $1, this would add another 57.5m shares (total now 328m), resulting in a higher break-even market cap of $1.64b.

For those of you underwater, please think about this deeply when they do another raise. It is pushing your cost higher and higher, even as the company executes, due to a severe need for more cash.

I originally thought CPO was disruptive to this company (partly true due to their selling of pluggable transceivers), but their laser chip production which they are scaling now is primed for growth from CPO demand. InP lasers are the bottleneck after memory and AAOI is one of the few vertically integrated companies preparing for the ramp.

I believe that due to the macroeconomic situation we are dealing with now (inflation way off target, interest rate hikes a real possibility), there’s a lot of volatility coming which can present potentially fruitful opportunities for investors interested in the AI photonics industry.

I apologize for misinforming anyone that believed my post. Nevertheless, AAOI still carries risks. For example, hyoerscalers cutting AI capex would have a direct impact on AAOI. Interest rates mentioned earlier may go higher which is bad for all high beta stocks. AAOI could face delays in production which would push back profitability and result in more dilution.

The pathway for the most developed assets (201 and 401) includes pivotal trials for each. The company had $72m after Q1 2026. Cash runway is into 2027, but does this include the extra spending needed for clinical development? I’m afraid investors may get diluted severely. They plan to have discussions with FDA to get alignment on trial designs by the end of the year.

This company is run by The Column Group (TCG is a life science VC that partners with scientists) and they have created promising cardiovascular assets with Tenaya scientists, validated by a research partnership with Alnylam. But is the thesis here that they would get bought before having to fund the trials? As a sub-$200m business, funding science at this scale becomes prohibitively painful for investors.

I don’t see a reason to buy Tenaya currently due to dilution risk for the pivotal phases. But the opportunity is large and the science is backed by data (so far). There was an issue with 201 where patient 5 (in high dose cohort) was lost to follow up. Only 6 patients in the study and one is a male in a condition that affects mostly men.