Shares of Energous Corp. (NASDAQ:WATT) jumped as much as 20.7% in early trading on Jan. 8, before cooling off some. At 3:15 p.m. EST, they were still up 6.3%. This continues a strong run since late December, following the Federal Communications Commission approval of its first-generation WattUp Mid Field transmitter, which sent the stock up almost 170% in a single day.
Over the weekend, Energous announced that the first consumer products were available for pre-sale with its WattUp technology, which supports wireless charging for devices from as far as three feet away. This is a huge first step for the company, with one analyst expecting it to see sales from WattUp surge from $100,000 in the first quarter to as much as $169 million by 2019.
There's little argument that Energous' WattUp technology could be a game changer for device charging, particularly small mobile devices like smartphones and watches, as well as electronic devices in the home -- like speakers -- which may not be located close to an electrical outlet. If the company does establish a strong market position and quick adoption from consumer goods manufacturers, the future could be incredibly bright. Factor in a market capitalization of just over $513 million at recent prices, and it could quickly become far more valuable if WattUp lives up to expectations.
But with that said, investors should be prepared for a bumpy ride. Energous' stock price is actually down 27% since Dec. 28, following a big sell-off after the big jump. Furthermore, the company's prospects are tied to the market's acceptance of WattUp, which is not a given at this stage, and Energous still must convince some of the biggest companies in the world to add WattUp to their devices and at a price that makes money and adds a competitive advantage for the device maker. That could be a tougher task than it seems on the surface.
All things considered, I'm adding Energous to my watchlist and may open a small position soon. If you decide to do the same thing, be prepared for unexpected losses and the chance that WattUp doesn't turn out to be the wireless charging breakthrough it has the potential to be.