Linear And Logarithmic Views Of MVIS

The way we look at data matters, and doesn’t. (Another post that can be generalized, but where it is handy to have an example like MVIS.)

Hopefully this will be one of my shorter posts. It should be because more work went into the data, this time. The plots are simple. The thoughts weren’t.

The default for many stock charts are linear. (Really, almost any chart in the news.) Linear is easiest to understand and easiest to draw; but can miss longer term trends.

Another popular choice is logarithmic. This one takes some thought because instead of the axis going up like 1, 2, 3 in equal distances on the chart, the steps are 1, 10, 100, etc. Why do such a thing? Because long term trends can be easier to spot.

When a stock is going up the same amount every day, the price grows as a straight line on a linear chart. If the increment stays the same, then the percentage increase gets smaller every day. YAY! turns into Yay! into yay into eh.

When a stock goes up the same percentage every day, the incremental change is small at the start, even possibly so small that it’s lost in the noise. But.
A 1% change when a stock is $0.15 is only $0.0015, not even an penny. But.
A 1% change when a stock is $1.50 is $0.015, barely more than a penny. But.
A 1% change when a stock is $15.00 is up to $0.15. And.
A 1% change when a stock is $150.00 is only $1.50. An increment which has become ten times the total value at the start.

Return on investment is usually expressed as a percentage. On a linear chart for a prolonged period of time, it either takes a magnifying glass to see where things started, or accepting the fact that the curved line rockets through the top of the chart, or a Really Big piece of paper is required. On a logarithmic chart a steady progression is a straight line. 

Stocks don’t follow straight lines or curves. The stock market is chaotic, in a mathematical sense. Finding the simple trend within the complicated chaos is an approximation. 

Companies don’t follow straight lines or curves. Milestones like earnings reports, press releases, product announcements, are few, even if some of them are regular. The company’s intrinsic value climbs or trips on stairsteps. Internally, there are many tinier steps preceding those stairsteps, but even the managers can’t track every bit of progress. Some of the steps are too small, essential, but too small individually. The stock doesn’t wait. It bounces in the meantime, sometimes driven by rumor or supposition more than official news.

Much of the interest about MicroVision refers back to the recent months. Look at the linear chart and the growth seems to start somewhere in December. Prior to that, barely any progress could be seen (unless you were in the midst of the advance and were very aware that the stock had gone from $0.15 to almost $3.00. $3.00!!?!? Whoo Hoo!) 

Look at the logarithmic chart and see a different story. Rather than the last three months looking like the volatile time, they look like a pause in a trend that began back in June 2020. That long term trend looks optimistic. The data and the trends from the last few weeks can look downright dismal, or at least dull when compared to expectations of constant growth. If that earlier trend is the truer story, however, then the short term is temporary. No one knows.

I like charts. I like data. I read discussion boards and tune into various YouTubers because I enjoy understanding others’ methods of interpreting the stocks. And then I make my own assessment.

I am encouraged by recent trends, as I see them. 

I am also aware that behind the stock’s machinations, noise, chaos, and investment climate, there’s a company that is striving to make significant, positive, objective progress. Many things are coming together after decades of small, incremental improvements that battled corporate realities. Their cash position dramatically reduced the downside risk. Customers are encouraging, and maybe finally getting past a pandemic’s problems. Possible buyers seem to be progressing (but the price makes me wonder if the stock has overpriced their comfort range). Shorts and such may yet overwhelm any true value of the stock or the company. There are so many unknowns that I doubt any trend line will remain firm for very long because the company and the stock are in the midst of systemic change. Allow me to emphasize that: trends are helpful, but reality has no duty or guarantee to adhere to any trend up or down or sideways or bouncing along.

But. 

It is encouraging to see evidence that systemic improvements have a longer history than most realize, and that my dwindled supply of patience might be just enough to enjoy more than just enough of a reward. 

Now, about the dangers of extrapolating data…

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The Fifty One Percent

“We never agree on anything”; say some couples. “We won!”, said the majority that had the results go their way despite the minority. “It’s worth a lot, so I should get a lot.”; say so many sellers, artists, homeowners, – and stockholders. Regardless of value, worth, or even relationships, our society emphasizes the majority over consensus. If the majority rules, and you don’t get more than half the vote; then the world may not be the way you want it to be – even if that’s within a couple or between factions.

Ah, truly democratic relationships. Society in microcosm. If both people have exactly 50% of the votes, there are only two votes, each has one, and either person has a veto power over any choice or negotiation. It’s great if there’s always agreement, and it must happen with some folks; but for many, absolute and all-pervasive equality and authority can mean neither person gets to get much done. Give and take are necessary. I’ll leave it to you to decide how that works out in your life.

Step it up, a bit. Companies and unions, and governments can be reduced to relying on bare majorities. Because politics are so bizarre I’ll use business/employee negotiations as an example. The company has demands. The union has demands. Each presents positions that can sound valid, valuable, and defensible. The positions are debated, or at least shouted back and forth; but the resolution comes down to which side can convince 51% of the vote.

For the pedantic types; yes, sometimes it is 50.1%, or 1 vote past 50%, or 60%, or 66%, or 75%, or… The issues aren’t resolved by the better of the positions being resolved by logical debate judged by an independent entity. Who got the most votes? Union contracts come down to how many employees are enticed by the first offer, then the next, with a guess of when enough will accept it, regardless of the importance to the rest.

I’m sure you can make the analogy to government, and possibly not be surprised if votes between two major parties keep coming down to elections that are hard to call in advance, even if they seem foregone conclusions in reflection. Satisfying the barest majority is the cheapest way to win.

Currently there is great debate, argument, and speculation about how much MicroVision is worth (yes, I’m talking about them – again, but the company is a proxy for so many corporate issues.) Look back a few posts (MicroVision MVIS Valuation Shift) and read or at least skip down to “my rickety wobbly valuation model” for MicroVision which results in a price for MVIS of $76. The post was well-received, but I forgot to realize what many investors do not have experience with buyouts and mergers. Those who do know buyouts and mergers are decided directly by the number of votes, and only indirectly by the value of the company. I think MVIS could be worth $76, but I don’t expect it. It could go lower in a negotiation. It could go higher in an auction, and market forces could overrule all in either direction.

As usual, I’ll point off to my seldom-bought book, Dream. Invest. Live. (really, buy a copy and be even more special than on-in-a-million) where I described one situation that made the 51% very apparent: Disney’s buyout of Pixar.

I’ll shorten it here, so pardon as I simplify the story. I owned shares in Pixar almost as soon as it was public. As I recall, that was before Toy Story, back when the idea of computer animation was laughed at and Job’s investment was termed a waste of money. But, I saw some of the very early shorts, extrapolated the potential in my mind, and bought at the earliest opportunity. (Those were busy work times so I missed the IPO.) Fast forward past a few movies and it was apparent Pixar wasn’t a fluke. They were artists, experts, geniuses, passionate, and persistent. The short version: Disney bought (or merged with) Pixar for a small premium of the stock price. Just as Pixar was about to become highly profitable as the revenues were finally being booked, Disney made very good offers to a few people at Pixar. At the time, Steve owned almost a majority alone. Disney needed a majority, though; so, they made very nice offers of stock in Disney and positions in the Disney to possibly fewer than a half dozen people. Disney got Pixar. A select few were selected to be very nicely compensated. The rest of the shareholders received a premium over the stock price which was appreciated, but was far below the future value of Pixar if it had remained independent. (Aside, I recall Pixar’s version of Ratatouille could’ve had a lot of fun making fun of a certain mouse by making a move about a rat if the Pixar animators got uppity. I wonder if I still have those notes.)

Buyouts and mergers are decided by votes, not value.

And, those votes are counted one vote per share, not one vote per shareholder.

So, while many shareholders in MicroVision debate about how much the company is worth, the decision is more likely to be made by what offer has to be made that will receive enough votes. In the scenario I described, I valued the stock at ~$76 – for that particular scenario. Any particular scenario may be valid, but valuations can be secondary to the vote count.

The power of the vote count is something that is familiar to voters in the US. The value of the argument is worth considering and honing – but as an understanding of the issues. The votes may be swung by other things like ideology, peer pressure, habit, promises, and regular real-life distractions.

With every extra bit of news it is possible to shift my opinion of a topic or to alter my algorithm or assumptions about an analysis. The decision, however, will remain with the majority and probably based on a different set of criteria, assumptions, and logic than mine. One for all and all for one? Nice idea. In the meantime, however, we get to watch what it will take to get that one extra vote to fall on the larger side of the scale. The 51st% makes the rules. But, if MVIS gets bought out for >$76/share, well, … let me see the rest of the offer.

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No News Is Still No News

History echoes. It is too easy to let no news be interpreted as negative news. Humans are so good at reading between the lines that entire grand narratives can fit between two paragraphs of a press release, in the gap between the difference between a plural versus the singular version of a noun or verb. Today, MicroVision released some news, not enough for some, and the price and enthusiasm suffered – at least for today.

Today, MicroVision announced long-anticipated earnings. Would there be a surprise because of something happening quietly in the background? Would management reveal, or at least suggest, or even just tease about buyouts or partnerships or orders? Judging from the stock price after hours, management managed to deliver lots of disappointment regardless of their intent. This isn’t the first time stockholders were dismayed when reality didn’t meet expectations. I leave it to those involved to decide if their enthusiasm misled them, or if management did.

As I decided to write this post I remembered a similar one from several years ago. It wasn’t about earnings. It was about MicroVision’s performance at a massive trade show. There was great anticipation. Lots of ‘wink, wink, nudge, nudge’. Big things were about to happen. And nothing did. At least nothing public, significant, quantitative, and positive.

That big event/non-event prompted me to write “No News Is No News“. The feeling is so similar that rather than rewrite it, I’ll post it again.

No News Is No News

I’m sure some stockholder who was there can recount the tale. I just recall the feeling. Ask around on the discussion boards.

One tidbit: The stock price was about $1.20. I wrote the blog on January 11, 2014.

Another tidbit: A few days ago I tweeted a recent series of updates.

In the last ten days MVIS has bounced between just over $10 to just under $30. After hours it is around $14. Last night one friend suggested it would go to $0.50, because it was about that a year ago. I think the company can be worth ~$76 for a specific scenario which is unlikely because a merger isn’t determined by the value of the company but by the offer that is sufficient to gain a majority of the votes of the shares (not the same as the shareholders – see PIXR’s example in my book, Dream. Invest. Live.) Short squeezes are argued to be able to reach three digits, with some suggesting four digit prices. Shorts and others are rumored to be able to drive it ridiculously low. Pick a number from under a dollar to over a thousand dollars and there’s someone who will agree with you.

And yet, there’s no real news. NDAs and such can be frustrating, but the shareholders, the owners of shares of the company, want to know things like: A) Is MicroVision supplying components to Hololens? B) Is MicroVision supplying components to IVAS? C) Are other customers working in similar products? D) Are customers working on buying display components for other products? E) How many customers are actively incorporating LiDAR units in vehicles? F) How many customers are actively incorporating consumer LiDAR units into products? G) Are any other customers serious about other MicroVision products? H) How many companies are negotiating to buy some or all of MicroVision? And no, I’m not going to ask because years of experiencing professional obfuscation have convinced me that asking it a waste of time.

So, if people can’t find answers, they’ll make them up.

I’ll repeat what I tweeted, with some notes. The risk to the company has significantly been reduced, again.
1) $50M added a few months ago. (Whew.)
2) Very high probability of supplying Hololens & IVAS. (But not guaranteed)
3) LiDAR milestone cleared. (Sales in Q3/Q4. Ah.)
4) and the other possibilities supply hope.
5) And add, the buyout possibility continues.
6) And I hope the company remains independent and become highly profitable, and the stock reflects that – soon.

A stockholder who has only begun their investment endeavor asked how we long term shareholders hang in there through such wild swings as we’ve seen this month. Take a look at the chart in detail back to the 90s through several episodes of MVIS’ history. Expectations remain high. Technological, business, marketing, and public awareness all continue to improve. The story is improving. There are no guarantees, there isn’t enough news, but it helps to concentrate on the progress of the company, not the swings in the stock.

This does feel like an echo, but instead of a cave or a canyon, it feels more like a more refined space where good things are about to happen. But, hey! Management! We’re getting tired of reverb and some stagehand saying “check, check.”

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An MVIS Rabbit Hole 20 Years Deep

Yes, this again, MicroVision again, but it is also a history lesson with a non-stock-related twist that I surprised me.

MicroVision To Announce First Quarter Results on April 29, 2021” – Yahoo Finance

As I type, that’s less than a week away. Only a few days before MicroVision’s management releases news about how much they made, lost, kept, and spent – and maybe news about how much they hope to make, or be sold for, or something, anything. Just a few months ago, I wrote about Gamestop And Moving Smaller Stocks; particularly whether the situation that put Gamestop’s stock (GME) into the news, including the late night talk show bits, would happen to MicroVision’s stock (MVIS.) As of a few days ago, within some investment communities, MVIS is a more popular or at least common topic than GME. Thousands of people might be watching to hear whether they want to buy, sell, hold, short, borrow, whatever.

If you haven’t noticed there are many qualifiers and possible actions in some of those sentences. That’s because MicroVision’s long term shareholders who have spent years wondering if anyone would ever notice the company and the stock suddenly find their company, their stock, and even their discussion boards overwhelmed with crowds, comments, and actors.

While I and others prefer to work from data, logic, and facts, I recognize that the investment community can operate from emotion. In my opinion of the stock price, MVIS has passed from years of irrational pessimism to so much attention recently that it may experience irrational optimism – or mechanisms in the investment world that can dramatically affect the price of the stock regardless of the value of the company.

Lots of variables. Little information. Thousands of people. Very little time. Billions of dollars at risk. Industries possibly positively disrupted in ways we haven’t witnessed since the internet was so novel and amazing that Internet was capitalized.

Just the time for me to dive into data for long term trends. But, wait.

As many know, I’ve owned MVIS shares for over twenty years. I don’t access massive databases, because I don’t spend that kind of time and money. I’d rather focus on living than on investing; hence, my book “Dream. Invest. Live.” But what I do have is a pile of paperwork from years of owning the stock and trying to decipher management speak.

Hello, paperwork. Hello, rabbit hole. So much for data. Nostalgia kicked in.

That’s a lot of paperwork. It’s also a lot of data, but searching that many documents to retype data stored on paper is more time than I want to spend today, and there aren’t many days between now and the meeting.

But look at those annual reports. Even simply looking at the covers tells a story.

The ones on the left are from an optimistic time. Color brochures, every year a different set of graphics – and every year a different story. The technology and the name of the company were the most constant part of the story. If I write a book about the company I’d like to compare the progression of the optimisms.

The ones on the right are from the next decade, the era of black and white, structured format, cheaper paper, no catchy slogans – the years of a reverse split, many shareholders splitting with the company, technological holes being filled in by managers recognizing reality.

Between the two are a period when the company’s logo went from something I saw as a tri-color bicycle to a set of harsh green cuisinart blades.

This year’s report is as dull as the others.

Until last year, however, every stockholder’s meeting came with trinkets. Sometimes only a pen (which may not last the meeting), other times cups, hats, notebooks.

My favorite is the pen that lights up so you can write in the dark. It was the celebratory pen for the Nomad system, an augmented reality headset that clipped to a baseball cap. Great things were expected for the monochrome display – back in the early years. (2004?)

The stack of papers weighed so much that, as I arranged them, the binder holding them broke.

Out popped a surprise: the 1999 Annual Report with a scribbled note of “When profitable?”

Curiously enough, I don’t think I’ve heard that question about the upcoming meeting. There are questions about buyout values, royalty and licensing income, customers, and cash burn. Profitability? Not discussed. Wouldn’t it be a great surprise to hear management address that directly? (rhetorical)

We’re in the drumroll period for MicroVision. An earnings report in a few days. An online stockholder’s meeting in about a month. (Not expecting them to mail us doughnuts, coffee, trinkets, and demo units. I do miss the meetings, and meeting the other shareholders.) Maybe I’ll set that mug aside, just in case any optimism I have is greatly exceeded. Champagne? Whiskey? Maybe just tea?

One last surprise. As I opened the brochure from that first meeting an article fell out. Ask long term holders about green lasers and get more stories than you may want to hear. Intrigue. Soap opera. Success through adversity.

And then, as I picked up the article I dropped it, it flipped and revealed something that should’ve been read about two years ago. Spooky.

Stay tuned. There may be much brighter days ahead, and the wait might not be long – for MicroVision, MVIS, and many things.

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Possibly Profitable Patience

Pardon me an old man moment. Kids, slow down! Oy! OK, back to the show. Patience is useful, a hard task for some, and changes with time and age. It is also possibly profitable. 

Yep, another stock post with some real estate included, which also means writing about MVIS because it has become my long term example.  

Sometime in April, #MicroVision is expected to announce good news about their LiDAR product. For $MVIS shareholders, browse back through the blog for details. When MicroVision announced that they would announce the product the stock jumped. For months (years?) management has talked about possible buyouts. Another reason for the price to rise. Recently, Microsoft (not MicroVision) announced an initial order of ~$22B for their new Hololens/IVAS (augmented reality) headset. Another reason for optimism. Up, up, up. From ~$0.15 in early 2020 to $23.72 in February 2021 (irrational exuberance?) to $18.55 at the end of March 2021 to, to, to, – down down down since the beginning of April 2021, to $11.03 April 16, 2021. 

Google Finance
Google Finance
Google Finance

Where’s the news? Where’s the news? We want the news! Oh no, maybe there’s no news. What if there’s no news? Why won’t they say anything? 

Many new MVIS investors have been Long, i.e. holding the stock without selling, since the last few months. For someone new to investing, such a lack of information can be worrisome and exhausting. 

I am one of the reasonably Long Long investors. Others exceed my twenty years of holding. Throughout MicroVision’s history the cycle of lack of progress, tons of guessing, scraps of good news, excuses about competition sensitivity and NDAs, and – be told to expect good news within a few months, or several months, or at most a few years. 

This time looks different, though.

That’s a test of patience, and with no guarantee of success. Ironically, in modern American finance, waiting decades isn’t rewarded directly. The benefit comes from seeing an opportunity and getting involved before the crowd rushes in. Waiting rarely takes decades because most companies can’t last that long. Most investors can’t wait that long, either. But, the shareholders that buy the day before the big news or the big news are the ones who can make the most money in the least time. The risk is that the stock can rise faster than a buyer can act. 

Unfortunately, it is usually difficult to predict that timing so investors/speculators like me buy in early when the company is small and sell after the crowd arrives. Buying early can mean putting up with people laughing at you. Successful selling can mean suddenly people laughing and celebrating with you. It all worked in my favor for the laughter at: a company that will sell coffee, a company that will use computers to make movies, and a company that had the silly notion that people might want to visit the internet. Thank you, SBUX, PIXR, and AMER/AOL. But it can also mean a long wait for a lack of results from an online bookstore that didn’t understand online, a solar power company that almost hung in long enough, and a satellite communications network that understood technology but didn’t understand debt. Barnes & Noble, Real Goods Solar, and Iridium had good ideas but were either too early, not adaptable enough, or underappreciated the debt required to be a first mover in a new industry. (Additional details in my book: Dream. Invest. Live.)

Fortunately, a stock can only go down 100%, but can rise tens of thousands of percents. 

(Triple Whammies happen, though. Update scheduled for August.)

Long term investing can be simple and easy. Buy. Wait. Check on occasion. Sell at the right time, either to get out before the bottom or as it approaches more positive goals. The waiting, however, seems simple until the waiting begins to exceed the available patience.

Patience is personal. How long is a person willing to wait for anything? I look forward to getting back to running (marathons), bicycling (coast to coast), hiking (across Scotland and throughout Washington’s mountains), and such. I’m a writer and a photographer, usually of twelve month projects. I’d rather transplant from something already growing on my property and wait a few years than buy from the nursery and rush home to plant it. If I had a larger lot without rules about tree heights I’d plant a lot more trees, and wait. Evidently I think long-term.

For years, house prices were depressing. Now that I’m a real estate broker (required disclosure: I am a broker with Dalton Realty, Inc. on Whidbey Island http://whidbeyrealtor.com/) friends are asking me about how much their house might be worth, and are then surprised and sometimes disbelieving that their house is worth more than they thought – and all they did was nothing but wait. Accidental patience; benefits that sometime happen by simply not acting impulsively. 

Trends don’t go on forever – unless you’ve reached galactic escape velocity (~550km/s) and nothing gets in your way. Real estate inventories can’t go below zero. Prices can’t climb forever. Startup companies eventually either run out of financing or succeed or get bought out.

Guessing at trends from a few percent of the life or history of something can benefit from a longer view and a deeper appreciation of the core value. Is the value of a company or of a house greatly different from today to tomorrow? The price can change frequently throughout a day, but the value reacts more slowly. Usually, a house gets a day older every day; but except for emergencies, most homeowners can wait months or years to counter the aging. A company can seem to change dramatically every day because the stock price changes so often, but the core value changes more gradually – even if the stock doesn’t move. A successful order is progress, but the steps that led to the order inherently had value. An invention gains value as it proceeds from idea to research to development to patent to prototype to product to profit. Those steps are usually too subtle and sometimes secret, so their contribution to value to the company isn’t represented in the stock price; but are more noticeable with patience. 

As I wrote above; “Where’s the news? Where’s the news? We want the news! Oh no, maybe there’s no news. What if there’s no news? Why won’t they say anything?” Without the news, worries arise. Over promise and under deliver has become the expectation for MicroVision. But also as I wrote above; “This time looks different, though.”

Stocks bounce around, hopefully upward. Houses hopefully fight aging sufficiently to become more valuable objectively and subjectively. With those and many other aspects of a long-term goal, a long life, one of the key skills is patient. Now, pardon me as I check Twitter to see if MicroVision announced anything after the close of the business day. I mean, come on, I’ve been waiting years and they could announce good news any time now. Now, please?

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Waiting – April 2021

Oh, to dance, again. It’s been a long wait. And that’s not the only thing I’ve been waiting for. Weeks, years, decades of waiting should be resolved within the next two months. Potentially, all of it is good news. But in the meantime, waiting is required. Waiting isn’t much fun. Dreaming is.

Spring! Spring happened already, so the calendar says. The yellows of skunk cabbage and daffodils are fading but the fields of tulips are blooming. (Dressing The Spring Equinox In Yellow) Ah. But, in the meantime, a spring storm is arriving with a bit of winter. Snow is forecast, but no accumulation is expected. Sure, but no storm was expected, either. The good news is that my neighborhood’s forecast is also for a wave of warmth to finally arrive next week. Patience, lad.

National Weather Service

MicroVision! Got to mention MicroVision. I’d be hiding a major event if I didn’t mention it. By the end of April, the company is supposed to make a significant delivery of an innovative component that enables driver-less cars and such. The guess is that by the end of May or June the company will announce a buyout, or a partnership, or a major order, or a combination of any of those because they’re also busy in other innovations. The stock (MVIS) is up over 6,000% from last year, with many enthusiasts expecting to rise much higher. In the meantime, my investment is worth a couple of years of emergency frugal living expenses, but within a few months it could put me much closer to re-retirement if those enthusiasts are right.

Business! For places like Whidbey Island, the tourism season begins. Shops reopen, restaurants fill, jobs are posted, vacation homes are rented. Sorta. The pandemic hasn’t moved out, yet. Masks, responsible people, and vaccines are making impressive progress. Maybe that’s reflective of the county’s status as a generally healthy place. (Island County ranks 4th healthiest in state) Today, places may open with caution. Within months maybe they’ll open with fewer restrictions and viable revenues.

Business! For real estate brokers on the island, spring is usually the time when inventory rises (Yay for supply!) at the same time that people decide to move here or at least get a second (or third or fourth or …) home here (Yay for demand!). At least half of that is happening. Worldwide buyers are busy shopping; but for many reasons sellers aren’t selling. (Whidbey Real Estate During Covid19 – April 4, 2021, – WA required disclosure, I’m a broker at Dalton Realty, Inc. http://whidbeyrealtor.com/) Sometimes such markets turn around with a note from the Fed, or a whim, or a fad, or enough pent up frustration and demand to make something happen. In the meantime, I get to keep busy (while waiting for enough transactions to close so I can go on vacation, too.)

Second Dose! It’s coming. It’s soon. Within a few days I get my second dose (Pfizer). For a few days after that I will have time blocked out just in case there are significant side effects. (That first dose was an multi-day event. Ouch.) Hopefully within a couple of weeks I’ll be dosed up and ready to feel more confident about re-engaging in the world.

Post Dose! Come on, life. There’s dancing to do. (I hope I remember how.) Before that happens there will be an epic haircut. (I’ve been letting it get to college length; but the bald patch isn’t participating so a dramatic enforced shedding will occur. Oops. Tried to take a photo and it didn’t quite come out right. Oh, shucks. 🙂 ) At the same time it has become apparent that the transition back to being social beings again may be tougher than expected. Months of semi-quarantine have been tough on many people. Mental health officials have been warning about that. Now, as people begin to re-socialize it is also becoming apparent that months of avoiding contact, avoiding anti-maskers and anti-vaxxers, those new temporary habits are turning out to be tougher to reverse. Hopefully a few, mask-less smiles, hugs, visits to restaurants and bars, and a party or two will help heal and retrain responsibly sequestered souls.

Eventually. A few days, a few weeks, a few months. Compare ten years ago to two years ago to a year ago to a few months ago and be impressed with the changes we’re witnessed, adapted to, and reacted to. What’s next? I have guesses. The best news is that the changes I see before me are finally something to look forward to.

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MicroVision MVIS Valuation Shift

As I’ve told others on social media and discussion boards;

“I didn’t expect to have to update my MVIS model so soon. In it I played with (and it really isn’t much more analytical than ‘play’);…” (Valuing MVIS Looking Back And Forward)

These have certainly been dynamic times for one of my stocks: MVIS. Of course, that’s because these might just be dynamic times for that stock’s company: MicroVision. Notice the word ‘might’.

I’ve mentioned the company and the stock often throughout this blog’s history (#MicroVision, $MVIS). (Too often for some who want to read more about personal finance, frugality, community, sustainability, etc.) Until about a year ago the stock posts were in the far minority, but then things started happening. Lately, ‘things happening’ has become a weekly event. April through June may be busier than that. 

Within about thirty minutes at the end of the trading day on March 31, MVIS went up over 50%. There are many predictive models for stock movements, but picking out the right thirty minutes of one day from twenty years ago is Ouija Board territory.

“Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years” – CNBC

To recent shareholders, much of the attention was directed to the progress  in LiDAR, the component considered necessary for autonomous vehicles. Driverless cars still need to pay attention to the road.

Prior to that, much of the attention was directed to progress in Hololens. One intrepid shareholder’s video of disassembling Microsoft’s new augmented reality rig showed MicroVision was part of the product – time three. Three MicroVision components per unit, at least in that version.

About a year ago, the stock hit a low of $0.15, at which point the attention was drawn to the prospect of some company buying MicroVision (maybe for as much as $5!) Wither Or Whether MVIS

Longer term shareholders are more likely to be aware of much more: smartphones with embedded projectors, display-enabled smart assistants like Alexa, home theater units, LiDAR for the home and for factories and vehicles, augmented vision eyewear, interactive displays, and enough more that I can’t remember them all. (Others can recite the entire list, I am sure.)

The news that moved MVIS was news for Microsoft that didn’t mention MicroVision. That’s no surprise. Any bit of significant electronics can contain dozens of subcomponents. A company like Microsoft will spend their time selling the product, not listing suppliers. The Microsoft product is the military version of the Hololens product (IVAS) mentioned in that breakdown video. Does the current version of Hololens include MicroVision? Probably. If MicroVision is involved in Hololens does that mean MicroVision is also a supplier for IVAS? Probably. The news was expected. The details weren’t. 

CNBC

There’s always someone out there who guessed right, but most of the discussion was for at most about $2B for Hololens/IVAS. The Microsoft announcement was for over $20B. Surprise. Ah, but that was for the next ten years. Divide $20B by 10 and get $2B. Still welcome. But bump that up again because that announcement was for the US Army getting 120,000 units. IF MicroVision is inside, that’s 360,000 subcomponents. Bump it up again because there are also possible sales to the rest of the US Armed Forces, and then there are allies, and then…? So, the top end increases significantly. That can explain a 50% stock price jump in thirty minutes for a company valued at less than $0.1B last year.

But, here’s one element of risk. MicroVision is well-known for remaining quiet about details of contracts. Whether that’s competition sensitivity, NDAs, or reticent management is difficult to tell. Microsoft mentioned a customer (the US Army), a quantity (120,000 units), a value (~$20B), and a time-frame (10 years). Microvision said – – – – – nothing. Without confirmation from either corporation, verification hasn’t been made. As for the most recent version of Hololens, we can’t expect that stockholder to spend yet more thousands of dollars to continue opening up functional hardware. As for IVAS, I suspect the US Federal Government would do much more than be upset if a shareholder dismantled an IVAS unit. So, without MicroVision management making an announcement I’ll continue to be aware of the risk – while appreciating the stock appreciation.

That risk may be why, after a 50% rise one day, the next day MVIS was down 16%. Progress, but not a direct ascent to the heavens.

Google Finance

Such events are also why I prefer my investing approach of Long Time Buy and Hold. (See my book, Dream. Invest. Live. for details.) My patience has been strained and drained over twenty years, but if you want to get an idea of how quickly news and stocks can happen watch the daily livestream from an enthusiastic shareholder who had to step away to go the bathroom about the time the news happened.

And then there’s April.

As I said above, April is anticipated because the new more-communicative MicroVision management announced several weeks ago that the LiDAR component will be available for customer testing and integration (at least) sometime in April. That news bumped the stock back then. (Dynamic MicroVision And MVIS) That was just the news of anticipated news. April should include the announcement of the delivery. I didn’t expect any company to announce news on April Fools Day, so the news could happen as early as April 2, as late as April 31, could be delayed, or could be, could be. Considering the IVAS surprise, the LiDAR surprise could be just as dramatic.

And then there’s June-ish.

Management comments suggest (forward-looking statements and all) that the buyout negotiations continue, possibly being concluded on or about June. Of course if MVIS has climbed sufficiently is it only purchased in bits? As I’ve written before, I feel sorry for the folks on the other side of the negotiating table. 

Let’s go back to that play model I referred to at the start. Two weeks ago I posted “Valuing MVIS Looking Back And Forward“, which has become the most popular posts on this blog. 

I’ll keep the basics to same to minimize my confusion. I hope that helps, you, too.

LiDAR sold off to Apple or Ford or…,

Augmented Vision developed in partnership with Microsoft 

Stand alone displays, interactive displays, et al remains with MicroVision.” 

Now (many assumptions are included explicitly and implicitly and accidentally). Hmm. As I consider this, the total value doesn’t change much except for the Augmented Vision component.

If MicroVision is inside Hololens and IVAS, then the value of the parent company has fundamentally increased, but I’ll assume profit margins remain the same for conservatism.

Near term (within three years) revenues are guessed at ~$0.2B.

Looks higher now. That $0.2B is one tenth of one tenth of Microsoft’s revenue, not profit, from the IVAS/Army contract. I’ll raise that a bit to account for Hololens + IVAS/Army + IVAS/others. Let’s say $0.4B for near term potential. Use my regular Price/Sales ~6 suggests ~ $2.4B for the value of near-term future revenues translated to a stock value. 

That adds $1.2B to my rickety wobbly valuation model from $10.2B to $11.4B, and a price for MVIS of $76. MVIS was at $0.15, is at about $15, which puts the valuation at just over 5X the current price. Well, $15 looked silly when staring at $0.15. One hundred times that can make one think another factor of five is silly, too; but without knowing more, I have to work with what I have. (And have the time to research and analyze.)

Personally, if I didn’t sell at $0.15 (a time of very little news), then why would I sell at $15 (a time of greater potential) when there is real, positive, significant news supposedly near?

Or, Murphy strikes again, Lucy pulls the football away from Charlie Brown, Wylie E. Coyote realizes that tunnel is really just something painted by the Roadrunner. 

And, in the midst of all of this, one of my other companies and stocks (NeoPhotonics/NPTN, market cap ~ $0.65B) may be a buyout target from a firm (Lumentum/LITE, market cap ~ $7B) that cancelled a buyout of another firm (Coherent/COHR, market cap ~ $6.3B). 

Not a dull year. Great potential. Ah, but not enough to feed my checking account – yet.

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Personal Finance Is Personal

Personal finance is personal. Yes, that’s the title; but since I wrote my own book on my own personal finances (Dream. Invest. Live.) the simplicity of that observation has become more apparent – even after twelve years.

Finance is impersonal, in the ideal. Assets, liabilities, income, expenses all define the majority of finances for people, businesses, organizations, and governments. Arithmetic required, but not necessarily mathematics beyond multiplication and division. Get fancy with things like compound interest which involves understanding how to take a number to the power of another number, and find quicker ways to calculate mortgages, debt payments, and the returns on investments. Or, let a spreadsheet do that work for you.

As I’ve ridden a roller coaster through America’s wealth classes I’ve received advice when I was rich, poor, and muddling by that almost always referenced the bare truth of those objectively correct numbers and mathematical realities. But, there are other realities.

Humans are not automatons. Society does not treat everyone equally. Opportunities are not evenly distributed. Success breeds success. It takes money to make money, and the defining aspect of the poor is that they don’t have enough money. Advice that sounds rational and sound to some sounds silly, impersonal, insensitive, and clueless to others. I’ve learned to affix a long acronym to almost any financial advice I find: ALAYCPYB.

As
Long
As
You
Can
Pay
Your
Bills

When you can’t pay your bills, the idea of putting something away for a rainy day is ridiculous because you might already be in a gentle drizzle or out in a deluge without a hat or a home. Working harder makes little sense if you’re already working seven days a week at several jobs, gigs, or endeavors. Go back to school, or move to a better place, or invest in yourself, or get a better job are great ideas but useless ideas without the surplus cash or time to get a better job.

I know too many people who’ve tried to access government assistance but who were denied because they or their businesses hadn’t enough history of making enough money to qualify.

I suspect I’ve lost many readers this far in because that reality is uncomfortable and a challenge to conventional wisdom. It is 2021. Conventional wisdom was established before trickle-down economics were introduced, about forty years ago. This is no longer 1981. Much of that wisdom remains valid, but seemingly only for those from whom finances are supposed to trickle down from, not trickle down to. The world is changing.

Despite those difficulties, there’s a truth that is appropriate for almost anyone who is having to manage their finances. Here’s the echo: Personal Finance is Personal.

It is possible to dispassionately manage personal finances, but most people aren’t purely objective. We are a subjective species. Even Vulcans had emotions, they just repressed them.

If we were purely objective about personal finances, we’d all be frugal, only purchase and produce necessities, would invest purely based on things like return on investment, exercise every tax minimization method, and always have balanced checkbooks.

But. We do more than invest; we dream and live. We buy luxuries, which can be necessities to maintain mental health. Some of my best investments have been little luxuries like coffee (Starbucks) and movies (Pixar) that managed to make billions of dollars a few dollars at a time. Investments can embody personal values. Do you want to invest in industries like fossil fuels, the military, plastics, or exploitative cheap consumer goods? They can have a good return on investment. There’s also triple bottom line companies that measure success by more than profit and stock price, or companies in renewable energies, healthier food production, socially responsible labor and supply chain companies, or one of my favorite approaches – positive disruptive technologies that may replace inefficient anachronisms.

Personal finance is personal because personal values are personal. Even people within restrictive societies will be unlikely to have identical values. Even within the same list of values, two people can emphasize different values.

Respecting the reality of personal values can make it much easier to approach personal finance. For those fortunate enough to be able to pay their bills and have excess with which to invest, it can be much easier to manage those finances when they represent more than just the accumulation and escalation of wealth. (I’ve been binge-watching a lot of Star Trek, so excuse yet another reference to the ultimate accumulators of wealth, the Ferengi. Fun folks, but oy, do they go to extremes – within their fictional realm.)

There are investors who concentrate on stock movements without concerning themselves much with the company behind the stock. That can work, but the stories involved are mostly about charts and trends. That may be sustainable for them. But they can spend a lot of time concentrating on staring at screens with their fingers on the keyboard ready to act.

There are investors who concentrate on companies with strong growth trends, but only while the stock is going up or down. Waiting for a buildup or sitting through a lull may not be their style; which means moving onto new subjects every few months. They also risk missing a rapidly rising stock. Dynamic without being as frantic.

There are investors who concentrate on companies with steady growth, or at least steady revenues. Maintain the status quo, enjoy the hoped-for steady appreciation and possible dividends, and maybe only check in for news or quarterly financial reports.

There are investors who research companies, trends in technology, trends in society, trends aimed at profitably meeting unmet needs. It can be difficult estimating the value of such stocks because the future is always speculative. These can be story stocks, where there’s enthusiasm based on a company’s optimism; but not every story has a happy ending. I am in this camp.

I am one of those who is willing to speculate early, sit through the lulls, check in regularly, and be more comfortable than many with uncertainty and risk. A new investor asked how I’ve managed to hold one of my stocks for over twenty years. The same way I’ve held several stocks for that long. I find it far easier to remain engaged and optimistic in stocks that represent companies which are employing new technologies to do things like regrow damaged nerves, treat currently untreatable health conditions, improve energy efficiency, revolutionize restrictive wasteful and inefficient electronics, and enable faster and cheaper internet operations.

My style of investing is risky, not the riskiest, but definitely risky. (See Dream. Invest. Live. for examples of ups and downs. See My Triple Whammy for details of as one financial pro called it “A perfect storm of bad luck.” See the recent stories about MicroVision and MVIS for a developing story about a dramatic turn around including a stock rising 10,000% in one year.)

In over forty years of investing I have invested in stodgy companies, but I find them harder to keep in mind. Some of them have been profitable, but, well, even as I type this I took a long pause as I tried to bring up any way to describe them. They are easily forgotten until I look at the spreadsheet I use to track my investing performance.

But, that’s just me. I have met few investors who are willing to take buy and hold for such long terms. Disruptive and unprofitable don’t inspire them; they frighten them. That’s fine. Personal finance is personal. Don’t just do what I do. Find out what you want to do. Find out what you value. Be real about your situation. Self-awareness can be more valuable than the advice you may receive. Spend less than you make and invest the rest is a fine idea as long as you can pay your bills and money left to invest.

Ironically, people with less money may be more aware of how archaic conventional wisdom can be. They are less likely to be tied to an outdated model of finances. They may have been more aware of bitcoin, innovative ways to buy stock, the viability of operating a virtual business, and more efficient and decentralized technologies that are disconnecting people from industries and institutions. By choice or necessity, they may have an advantage over people who haven’t changed their perspective since the fall of the Berlin Wall, or the Apollo landing, or VE Day.

Personal finance is personal. You are a person. Don’t ignore your self. Respect your self. Learn about your self – and hopefully benefit from the knowledge.

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Valuing MVIS Looking Back And Forward

Rarely do I write about one topic so much in so short a time, but MicroVision is in a unique situation. Watching several videos and reading dozens of posts since the earnings report inspired the following perspective on perspectives.

“OMG, MVIS is worthless.!” OMG, MVIS is going to be the biggest thing!” Well, yes, or no, or probably something else. After twenty years of mainstream silence about MicroVision (the company) and its stock (MVIS) it is phenomenal to see so many posts, videos, analyses, and articles about the company and the stock. No surprise, they don’t all agree. At least for now, they may both be right, from their particular perspectives. 

There are plenty of memes about perspectives but because this post is about investing I suggest looking at a dollar bill. One view: It has a picture of George Washington. Another view: is has a picture of a pyramid and an eagle. Yep. Either view only gives half the story. 

In the last twelve months MVIS is up over thousands of percent. (It varies a lot because the stock price volatility from then and now.) The high point I’ve seen was 9,602%; oops, now 10,173%. On March 11, 2021, MicroVision announced earnings. Since then equally passionate people have claiming the company is barely worth anything, while others see it being the start of a new technological revolution which makes it effectively priceless – in a good way. 

Google Finance

Welcome to two common points of view in the stock market. A third will follow.

Let me tell you a story.

I know someone who is active in the stock market, understands data, and is adamant that the best (but not only) way to estimate the value of a company and its stock is to look back over the last five years of earnings reports. Past performance may not predict future growth, but at least the data are audited and official. By that measure, MicroVision, is making less money per year more than a few people. “Sell the company and go get a job” sort of thing. 

I know someone who is active in the stock market, understands data, and is adamant that the best (but not the only) way to estimate the value of a company and its stock is to look ahead. Looking ahead is inherently guessing, but intelligent guesses can lower risk sufficiently to invest. Investing is about the future, so where the company is going is more important than where it’s been. If they’re not going anywhere, why buy them? 

Looking back is effectively relying on the world not changing significantly. Looking ahead is effectively relying on predicting the future. Well, the world is changing, but we can’t know how. Assuming nothing ever changes has trapped many people and companies in archaic institutions and anachronisms. Assuming we can predict the future has led to many predictions that look silly years later. 

And then, there are the people who ignore the company, and who only care about the numbers game of how the price is moving, and project the future by applying methods based on correlations of previous market actions.

So, there are three models. 

Those two people I mentioned above represent a couple managing the same portfolio. Their best performance was when both of them were correct; the past performance suggested continued growth, and analyzing trends suggested a company well positioned for a changing world. You may not be surprised to hear that such a confluence was rare – but very profitable. And that when they didn’t agree there was tension.

An easy example. Look back about twenty years. Barnes & Noble was a bookstore with decades of financial reports, appealing stores, and growth. You know Amazon gets mentioned next. A short history, an unproven business model, and an unconventional CEO. Old and steady focused on profit. New and aggressive focused on growth. Oh well, a missed opportunity. (They didn’t buy AMZN.)

So, here sits MicroVIsion. Financials aren’t encouraging, on their own. There’s great sentiment behind the projections, but most of it is based on speculation. And MVIS is up over 10,000%. Irrational optimism? I’d like to say yes or no, but we won’t know for months or years. 

Google Finance

The more astute readers will realize that I tend to look forward, otherwise I would’ve sold MVIS over a decade ago. Until a year ago, that would’ve been considered a wise choice. But, I held. I’d like to say it was because I saw this coming, but it was really because the stock had sunk so low that maintaining the tax losses was more valuable, also I hold out of habit because I’ve seen patience pay off well before (examples in my book, Dream. Invest. Live.), and because I still thought the trends were leading MicroVisions’ way (even as it seemed that management couldn’t capitalize on their position.

And here is MVIS at over $17.40 after setting a record low of $0.15. Which is the value that is closer to correct? Here’s my opinion. Opinion, opinion, but a factual declaration. Opinion. 

My previous MicroVision/MVIS post helped clarify my thoughts and conjectures. The range of possibilities is infinite with the majority of the cacophony seeming to be focused on either valuing the company and stock based on a buyout, or basing it on the value of the product; with, of course, a camp that thinks pennies may be more correct than dollars. 

My opinion. I have no expectations. The situation is unknowable, possibly even for the company’s management who know far more than we do. Even they may not know the intentions of suitors and customers and competitors. I am keeping in mind that it is possible that one of the product lines and attendant patent portfolios will be sold off for a very large sum. That acquirers gets exclusive rights and MicroVision gets cash ($2B seems possible based on nothing more than the mood in the community.) Another product line could become committed to a partnership or joint venture initiated partly with cash, and with profit sharing. The partner basically funds MicroVision’s continued development of that product; e.g. cash in exchange for buying into a hopefully successful product. (At a guess, and it is a guess, $1B in cash and hopefully eventually hundreds of millions in revenue, though those revenues may take years to actualize.) The remainder of MicroVision’s products and patents remain in a MicroVision which temporarily has a smaller product base, but a significantly better balance sheet, possibly enough for MicroVision to become an acquirer of other firms and their technologies and patents. It’s a complicated scenario, but life frequently becomes more complicated, rarely does it get simpler – unless that’s because plans fail.

(For example:

LiDAR sold off to Apple or Ford or…,

Augmented Vision developed in partnership with Microsoft,

Stand alone displays, interactive displays, et al remains with MicroVision.

In such a scenario, initial assets are at least $3B. Near term (within three years) revenues are guessed at ~$0.2B. Longer term revenues are guessed at $1B. To simplify the calculation, if that partial buyout is for about a quarter of the company, then each of the other thee quarters can be valued at $2B. ($3B cash +3X$2B in valuation + price/sales of 6 X $0.2B = $3B+$6B+$1.2B = $10.2B market capitalization.) Divide $10.2B by the number of shares of roughly 150,000,000 = a price for MVIS of ~$68.

That’s a guess. I’ll barely call that an analysis. It’s just a possibility, like any number between zero and the GDP of the world is a possibility. It’s just that zero and infinity are possibilities that are highly improbable. 

Discount it for risk, and get to zero. Multiply it by a premium and, well, who knows? 

Personally, my guess is handy for quieting my anxieties and eagerness. Because so many of my shares were bought before the reverse split, it doesn’t make sense for me to sell before ~$57. My guess shows me that it is possible, but I don’t know if it is probable. Beyond that, $100 would help me re-retire, partly because I’m now old enough for Social Security. $200, yeah, that’s retirement, probably remaining in my house – which would finally get new windows and a new roof. $300, sure, retirement with more style. $400, ah, back to being a philanthropist (long story, but I’ve been there before.) But, a move from $17 to $18, nice to see, welcome for sure, but not something that prompts me to sell. 

Usually such analyses have been about companies and stocks whose stories would take years to enact. MicroVision’s story is different. Looking back, it has been a very long road taking place over decades. Looking forward, major events can happen any day, with strong suggestions that big things will happen within weeks. Both are right.

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Dynamic MicroVision And MVIS

I really wanted to wait. I wanted to write this blog post after the market closes on Friday (March 12, 2021). MicroVision (the company) and MVIS (its stock) are both moving so quickly that waiting a day can change the story; but in that case, there’s value in telling this story then that story. Today (March 11, 2021), they announced earnings. Tomorrow, the market will officially react. In the last ten years of this blog, I’ve written about them over a hundred times. At some level the story’s stayed the same. There have also been a lot of changes; so, I guess I’ll add today’s activity to the list.

One of the biggest changes has been the attention to stock is getting. The company is getting attention, too; but from what I read in social media and see on YouTube, many people are finding the stock first. Many of the recent discussions call MicroVision an LiDAR company, ignoring the augmented vision work. Or, it’s an augmented reality company; which also seems to have a LiDAR product. Or. Or. MicroVision is many things. They’re working on LiDARs for autonomous vehicles, and LiDAR for the home, and wearable displays, and stand-alone displays, and interactive displays, and in the past worked on bar code scanners, medical equipment, and, and, and … oh, yeah, projectors small enough to embed in smartphones.

MicroVision is basically a company that has many (somewhat aging) patents on all of those things based on an ingenious chip design which incorporates an oscillating mirror. Shine a light on it, and it can paint a picture. Let the world provide the light, and let the outside image hit a sensor. Visible light out becomes a picture. Visible light in becomes a camera. Other parts of the electromagnetic spectrum and get LiDAR. Get fancy and make a display and a sensor, add sophisticated software and create touch-free interactive displays. Cruise the discussion boards and be overwhelmed with creative ideas being played with by enthusiastic shareholders. But, the company has rarely made significant money; yet, is still in business. Great potential. Terrible financials.

A confluence or a collision of events have changed the company’s and the stock’s situation.

Because so many people found the company via the stock, let’s step there, next.

Within the last year, the stock is up 7,315%. That is NOT 7.315%, which would be a typical increase for a market average. Within the last year the stock has gone from under $0.20 to a high of over $24. It is fun realizing someone became a new shareholder about this time last year, held, and has reason to smile even as the stock retreated to under ‘only’ $15.

Google Finance

Many people are crediting the current CEO for everything. I suspect over twenty years of efforts led to that day last year, and to today.

The biggest news has been LiDAR. LiDAR is basically radar but using a different part of the spectrum. LiDAR and radar are powerful tools, but fitting them into a car at a reasonable price has been difficult. Early prototypes used something that supposedly cost about $10,000 per unit and was the size of a KFC bucket. Not elegant, but successful enough to further the technology. I don’t know the exact dimensions, but MicroVision’s version looks to be about the size of a carton of eggs, supposedly will cost about $1,000, and may have performance superior to the competition. Maybe. The units aren’t in mass-production, haven’t been certified by the customers or the regulatory agencies, and are like any new technology – needing to prove themselves. But. It sounds like the customers like the MicroVision units. Production-quality units are intended to be shipped out in April. (Check the company web site for details.)

MicroVision LiDAR

The second most notable news has been the augmented reality components. Microsoft is using MicroVision components in their Hololens product. That went a bit quiet about the time that Covid hit; but Microsoft continues to develop and expand the product. But when will the revenues arrive, and will Microsoft’s experience inspire more customers?

Then, there’s the possible display customers, the interactive display customers, the consumer version of LiDAR for things like in-home security, and … I’m undoubtedly missing something.

MicroVision is more than any one of those product lines.

Oh yes, and the company was in such a sad situation within the last year that the CEO became much more active in trying to find a buyer.

Take your pick. Which one of those is what started and fueled a 7,000% increase in the stock price – even as the revenues remain almost inconsequential? Many are pointing at their favorite. Add them up. Scroll through Peter’s MVIS Blog for his price calculator if you don’t want to create a spreadsheet. The numbers are getting rather silly. They may be reasonable, but silly when you consider that someone could’ve bought the entire company a couple of years ago at a ridiculous bargain.

LiDAR company market caps are measured billions.

Microsoft probably has high expectations for Hololens.

Within five years the global display market is expected to exceed $177B. Even a small market share is a lot of money.

Even without adding in miscellaneous and it’s possible to add billions to billions, for a company that was under $100M.

Oh yeah, and then’s there’s the Gamestop story, a headline and a community. So many of those investors have found MVIS that the MVIS discussion boards have gone from a few hundred folks talking amongst themselves, wondering if the company and the stock will ever be found, to almost 20,000 on the reddit board creating a cacophony of enthusiasm. It’s like going to your favorite pub to visit a few familiar faces, then finding the place has gone viral and it’s scary just trying to get in the door. Oh, well, that’s success, too.

Within one year the stock has gone from irrational pessimism to possibly irrational optimism. Or, has the stock not even reached a rational valuation?

The buyout will fix the price. If the buyout happens. Imagine working in a methodical mega-corp, trying to negotiate a deal for a $100M company that the investment community has driven to over $2B and may see no reason to stop until it is over $20B. Do you still buy out the company? Does the company need to sell? Are you now the only company that wants in?

MicroVision was complicated enough with its various product lines. Imagine the joyful mess if most of them become successful at the same time to a similarly large extent.

I don’t think the company will be bought out as a whole. There were many things to note in today’s conference call. I suggest visiting the various discussion groups (reddit, Fool, SI, IV) for better analyses than most publications produce. Allow me to note some language choices. (Hey, I’m an engineer, but I’m also a writer.) The CEO was suing plurals: clientS, partnerS, mergerS.

Multiple customers? Fine. That’s something most businesses consider a healthy thing.

Multiple partners? That’s what I heard. If so, good. Partnerships can work well, and not being tied to one is even healthier.

Multiple mergers? OK. Each gets only what they want, properly values it, and doesn’t value the rest at less than its worth.

The permutations are more than my brain wants to handle (at least this late at night, and for free. Now for a fee, well….nah.)

This blog is about personal finance, so I have to pick something to plan around. It is rare that everything succeeds. It is rare that everything fails. Last year the worry was that everything would fail, at least as measured by stock price. This year people are reacting as if everything will succeed, as suggested by price targets (that are as ambitious as the ones I had many years ago.) I am going to assume (cue the ‘assume’ jokes, but hey, that’s what we have to do) is that: 1) at least one product line will be sold off, 2) at least one suitor will become a partner, at least in part, 3) with the extra funds subsequently available, the company can proceed with at least one of the product lines independently. In such a scenario MicroVision doesn’t go away (which I prefer), is provided with a very healthy cash position, and may have substantial profitable revenues. In such a scenario, there isn’t one conclusive exit like in a merger or acquisition. Portions of the investor community will drift out with each product line spunoff, but others may be drawn in as the financial situation improves.

Will I be able to re-retire because of all of this? That’s hard enough to say, and it’s late enough tonight that 1) I’ll consider that later, and 2) won’t do anything about it soon because such a sequence of scenarios can take years.

As for the valuations, allow me to dream and recall another buyout I was involved in. Does the term “To Infinity and Beyond!” sound familiar?

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