Why the XPED Ltd share price is rocketing today

Credit: Printed Circuit Corporation.

Shares in micro-cap tech business XPED Ltd (ASX: XPE) jumped around 24% to 7.8 cents today after the business announced it has commenced collaboration on a technology development project with Chinese company Telink.

Xped says that it has developed some revolutionary technology that will allow anyone using their smartphone to connect and control other everyday electronic devices via the Internet of Things.

It has named the technology Automated Discovery Remote Control (ADRC) and wants to license it to be integrated into third party products. The ‘ADRC hub’ is described as “essentially software” that could be deployed in a number of ways to help connect devices to the Internet via what the company also describes as its “near field communication” technology.

The Internet of Things is often touted as the next great technological trend (after cloud computing) for investors to make big profits from and there may indeed be some truth in this theory.

This may also explain why Xped has a wide following of retail shareholders who are hoping to strike it rich by speculating on its shares and money-making potential. Another reason for the evangelical-like belief of some in Xped’s potential may be the success of ASX-listed Altium Limited (ASX: ALU).

Altium provides the software required to manufacture the printed circuit boards needed to connect devices to the Internet of Things and has been enjoying strong global sales and profit growth with a rosy outlook. It is leveraged to the growth of the Internet of Things and now boasts a market value around $823 million.

However, Xped remains at the speculative end of the market with a value around $77 million according to Commsec and not a single dollar earned in revenue as yet. That’s no surprise given it has yet to commercialise any products, although today’s news of a deal with Telink to use its ADRC technology in Telink’s Internet of Things ready electronic chips is a step in the right direction.

For the nine months ending March 31 2016 Xped lost $1.84 million in operating cash flows, with $8.96 million cash in hand at the end of the period.

It raised $8.02 million through the issue of shares over the period and investors might want to consider how long that cash balance can last before the company will need to bring in some revenues or find more capital.

There's another technology that could have an bigger impact than Internet of Things and Cloud Computing put together...

Insiders are calling it one of the biggest new markets in the history of modern business... NOW is the time to get in on the hush-hush industry that could be poised for growth of over 4,463%+ by 2020... And the 1 ASX stock that stands to grow YOUR money right alongside it! Simply click here to learn its name.

Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.