SKYT Stock: Is Skywater Technology ripe for lift off?

Skywater Technology (SKYT) is a Minnesota-based foundry that helps companies develop prototypes for highly specialized semiconductors. They’re currently opening a second facility in Florida to expand production and capabilities. They also build radiation-resistant semiconductors for the Department of Defense, aerospace, and automotive sectors. While it was established in the early 90s, it only IPO’d a few months ago, so this is a stable, solid company with an established client based that’s poised to grow as semiconductor demand increases.

I’m not going to get into balance sheets or earnings reports or anything like that, because they mostly don’t matter for the catalysts I’m talking about, and we only have two from this year since they IPO’d. If you want earnings or income or whatever, look elsewhere: they’re still negative. That looks to change as their second facility comes online in Florida, but like I said, it doesn’t matter for most of the information below.

The stock has increased significantly since it IPO’d near $14. It’s currently sitting closer to $30. It has a number of very short term and medium term catalysts that will propel the stock to new highs, but first let me explain:

  • One of the reasons it has had such an increase in price is because it has a very low float, about 7.5 million shares, and most of its investors know that there’s nothing but up for this company, so they never sell. (The short-term catalyst is based on this knowledge.)
  • Another note is that this is not a short squeeze, because nobody shorts this company because it’s absolutely suicide. The stock only goes up. It’s %short is less than 2% of float.

Another factor is that Skywater does not trade options. This is likely due to the relatively low volume of the stock. The above catalysts could propel the volume high enough for options trading. If options start being traded, volume will further increase. Volume is $SKYT best friend, and if you’re a $SKYT investor, it’s your best friend too.

positions: 531 shares with an average cost basis around $27. Will add today if it drops below $30 again but I don’t think it will.