Dash For Trash
Why Soundhound is a poster child for this cycle's FOMO follies.
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Soundhound AI SOUN 0.00%↑ will surely go down as one for the books…
If nothing else, it’s a standout in this cycle’s dash for trash.
And if that’s not enough, how about this from a few days ago from one of my old alma maters, MarketWatch?
That’s the next-worst thing to a CEO having his name on the cover of a major magazine… or a company naming a stadium after itself.
It’s hard to believe that it was barely two years ago, in a piece I wrote headlined, “The Memefication of AI,” that Soundhound was front-and-center.
I had never heard of the company, which makes voice recognition software. But at the time it had joined the likes of BuzzFeed BZFD 0.00%↑ to get swept up in the first wave of ChatGPT-related hype. As I wrote at the time regarding Soundhound…
It's a member of the 2022 class of broken special purpose acquisition companies ("SPACs"). After wallowing at around $1 per share earlier this month, SoundHound's stock has roughly doubled on news about its voice-activated AI software after announcing additional financing, "strong preliminary 2022 results," and a deal for a "customer engagement platform" to use its software.
For the next year the stock bounced generally between $1 and $2 until earlier this year, when Nvidia NVDA 0.00%↑ disclosed it had taken a stake in Soundhound. More about that in a minute…
Within weeks shares more-than doubled… then quadrupled, before falling back a bit. Until last week, that is, when they exploded (and I do mean exploded) higher on news that it had struck a deal with a 150-unit taco chain to use its software.
Before We Go Further
And before we get into my five key observations…