Micro was probably a frowned upon prefix in company names prior to Microsoft. Why start a company that starts with something small, something micro? Words become symbols where we overlook the components. Microsoft, small and squishy, and yet a mega-corp and labeled a monopoly. Ah, those MSFT shares are gone, but I have many more of something with a similar name, Microvision, also known as MVIS, also known as a story stock with a long story. Such is the nature of investing in small companies. Will Microvision become a macro-story?
Microvision is such a story stock that most of my friends have heard about it. Some have bought shares. Many are bored with it. My first shares were bought back in 1999 for something like $35. On Friday MVIS traded for $0.80. (Listen and you can hear my fellow shareholders groan.) The company has very little debt but that’s because there has been massive dilution over the years. If things go according to plan, they may become profitable within the next couple of years. That was the story in 1999. That’s the story in 2011. Persistence and perseverance pay off. Good things come to those who wait. Or, expecting something different from the same repeated action can be a sign of insanity (which might explain a lot of politics.) Microvision’s persistence may be legendary if they succeed and would be forgotten if they fail.
They can succeed. From one point of view they already have. They’ve been in business for over a decade. That’s a lot of employees making a lot of mortgage payments, sending kids to school, and living typical American lives. The stock price hasn’t helped my lifestyle though.
Microvision is a company based on a device and an idea, just like Apple, and Intel. What Intel did for moving electrons, Microvision can do for photons, to some extent. Microvision’s products are based on a chip that houses a mirror. That’s simple enough, but not very useful until the mirror is moved. By oscillating the mirror the chip can produce or record an image. Shine one red, one green, and one blue laser on the mirror, turn them on and off appropriately and an image is drawn that doesn’t need to be focused. Shine it on a wind-blown curtain and the image remains sharp. Lasers are handy that way. That may seem like a trivial application and product, but watch your day go by and count the electronic displays. Most of them use fancy glass, complex toxic chemicals, considerable power, and can only be viewed from a small angle. Microvision’s current product is a projector the size of an iPhone, and prototypes have been made with the projector shrunken to operate from within a cell phone. Want to watch a movie on the plane? Just load a movie onto your phone and watch a one foot version if you hold the phone one foot away from the seatback. I use mine for watching DVDs by projecting the image onto a three foot piece of cardboard.
So why aren’t they already a success story and on the cover of Wired, Scientific American, and Fortune? Too many delays, too expensive products, too dim of an image. It wasn’t until the recent CEO got his job a few years ago that I learned that the products couldn’t succeed because there no green laser met their specifications. The previous CEO either didn’t talk about it, or tried to chase other possibilities. Some inquiring minds are agitated by that period. I wouldn’t bring up the issue with them unless you want to hear a lot of impassioned commentary. I can’t blame them. Those were frustrating times. The new CEO finally got a product out the door that actually does what it claims. That happened because he funded the basic physics required to develop the right materials for generating the requisite low-power quickly-modulating green laser. Unfortunately, the units cost more to make than the market is willing to spend. This is new technology, so the power available is small. The projected image is relatively dim. I can’t use mine for watching movies until after the sun’s gone down. Conference room projectors have brightness measured in thousands of lumens. The ShowWX has about 10-20 lumens.
So why do I continue to hold the stock or mention the company? Microvision in 2011 may be like Apple before the release of the Apple II. Microvision’s CEO is not a Steve Jobs. I like what he does, but lets not carry the analogy too far. Edisons, Fords and Jobs are uncommon. But Microvision’s products are useful despite their limitations. And technical limitations change as technology expands borders. Image quality is improving from WVGA to HD. Using newly developed direct green lasers instead of frequency-doubled synthetic green lasers means the image quality has improved, the component cost drops about 80%, and the projector size shrinks. The images are also getting brighter. Just as with the Apple II, the first applications weren’t the ones that powered the personal computer revolution. The MVIS discussion boards (which I claim also act as investor emotional support groups) are talking about stand-alone projectors versus imbedded versus car HUDs versus eyewear versus game controllers versus whatever else we dream up. Whichever products succeed, two or three of them are probably enough to make Microvision a very profitable company. Guesstimates of the company valuation translate into stock valuations of over $100. Guesstimates happen.
This week the company received a delisting notice from NASDAQ. The share price of MVIS has been too low for too long. If MVIS doesn’t rise far enough long enough within a few months NASDAQ may delist the stock. That’s usually not tragic except that it limits many institutions from investing in the stock, which can drop the price further. There are lots of possibilities like reverse splits but it is also possible that the company will have such good news that the stock price will recover.
Despite a depressed stock price (and there’s a lot of that going on) the company is actively being watched by the electronics industry and the financial community. Apple even seems to reference Microvision indirectly in many of their patent applications by describing projectors that have specifications that can only be met by Microvision. Intel has demonstrated a game controller. Pioneer is expected to announce a Head-Up-Display (HUD) for cars next year. Asian partners are already selling second generation products based on the first generation projectors (ESPlus).
My investment history goes back to before 1980. See my book Dream. Invest. Live. for more details. I’ve seen many such companies rise and more of them fall. I’ve also watched ideas and companies pass by. A decade of sustained hope for Microvision and MVIS has not been easy. It is a good example of why many people should not invest the way I do. This is more speculation than investment. Look back over my years of End-Of-Year and Mid-Year reviews posted on Motley Fool, Silicon Investor, or Investor Village and you’ll see the development of the company and my emotional response. I wonder at the ride myself.
Microvision does not have a micro vision. They have a vision that is expansive, disruptive, and pervasive. But to paraphrase a colleague, “Until the story plays to its end, we won’t know if it was a vision, an illusion, or a hallucination.” Stay tuned.