Keeping track of sports is much easier than keeping track of companies. Teams have schedules, public events, and lots of publicity. Companies can operate in stealth mode, only communicate when they need to or want to, and keep their schedules private. Investors are reduced to trying to parse press releases, sift for analyst reports, and watch the industry and competitors for trends, possibilities, and probabilities. Earlier this year, I took the time to sketch out a product timeline for one company, MicroVision, because there was the potential for lots of news, little assurance of any specific milestones, and a lot, a lot, of speculation amongst investors. I hoped to inspire someone to make something better, but it looks like my simple chart will have to suffice. Sports fans are luckier.
A few years ago, MicroVision’s CEO encouraged us investors to look forward to the company’s Super Bowl year because the company was finally clearing its major hurdles and was ready to run. Those years came and went. For more than three years, since the stock went through a 1-for-8 reverse split, there has been great anticipation, and very little actual action – at least publicly. Since then, the only products to hit the market were two variations on the same portable projector, the PicoAir and the PicoPro, both of which are getting very good press. Neither of which has publicly reported any revenues or sales numbers.
For the last few months, very little has changed in the chart. The biggest improvement was a crowdsourced estimate of likely dates for likely catalysts. While there is impressive enthusiasm for the company, the stock, the technology, and the products, there was also a significant tone of investors lowering their expectations for the year. They expected at least one product launch from Sony, had a reasonable expectation of an announcement of an innovative smartphone, and largely discounted the rest of the catalysts on the chart.
From the conference calls, stockholders meeting, and various emails, there are also reasons to believe Celluon may launch a new set of products, Sony may have included MicroVision technology in another of their home products, and then there are hopes from hints from car companies, UPS, and unnamed companies that privately demonstrated prototypes at CES back in January.
Welcome to October, 2015 and the three month countdown to the end of 2015. By the end of the month, Sony will have officially launched and made available a portable projector that appears to be significantly better than Celluon’s projector. Maybe there’ll be more news. Maybe not. Nine months into 2015, and the company has had far fewer than an announcement a month as some expected.
If any of the other products are going to be launched in time for Christmas, the US holiday shopping season, they have to so within about the next two months. The lack of any motion in the stock suggests that, regardless of shareholder sentiment, new buyers are holding back.
Sitting between the enthusiasm and the wariness is like taking a seat in a football stadium, picking the best seat available, and waiting for the crowds, the teams, and the marching band to show up. It can be fun, sitting on the 50 yard line when a game is being played; but it can feel silly to sit amongst tens of thousands of empty and quiet seats if the game never gets played.
There are signs of increased interest in the stock. Trading volumes have not increased dramatically, but this blog and others that mention MVIS are attracting more traffic, the discussion board on Investor Village had a day with five times the normal number of visitors, and private conversations are being started by past investors who sold and are interested in buying back in. At least one of my previous posts has been picked up and republished by an investing web site, stockspotify.com. Evidently, someone is interested.
Stocks can move on quantitative measurements like finances, but those aren’t due until the third quarter report which may not happen until November. Stocks can move based on official announcements, but Sony wasn’t able to budge MVIS with its preliminary news. Maybe the formal launch will suffice. Stocks can move on qualitative reactions when the investment community decides they want buy a stock before it makes a sudden move, or can hold off until after a trend is established. In any case, MVIS hasn’t moved.
As I type, the only reasonably reliable October catalyst is Sony’s official product launch.
At a minimum, regardless of sentiment, Sony sales are likely to significantly increase MicroVision’s revenues because MicroVision’s revenues were so low for so long. FY2014 revenues were only ~ $3.5M (Yahoo). That isn’t even enough to buy some houses in Seattle. Based on comments from the CEO at the stockholders meeting, expenses are running at about $12M/year. It is easy to imagine MicroVision making enough within the next year to be cash flow positive. If Sony plus Celluon sold two million units and MicroVision made $5 on each unit, then the company would make $10M. Add in development contracts and break even. Add in another product launch or three, or a more successful product, and MicroVision becomes profitable.
But here is where the simple tool of a simple chart comes in handy. It is easy to get caught up in the speculations. Some of us frequently dive into the speculations, just the way people dive into dreaming about winning the lottery. (I’ve got my ticket to the >$300M Powerball lottery!) It is sobering, however, to reflect on the chart and see how little has happened, how little is scheduled to happen, while also seeing the reasons for optimism and enthusiasm.
Investing can seem complicated. Full analyses of companies can require resources unavailable to individual investors. The same is true of sports. Understanding every player, every coaches’ strategy and tactics, the competition, and things like the crowds and the weather is equally complicated. Most sports enthusiasts are happy to be spectators, tracking a bit of the data, listening to commentary, and largely enjoying the game (if their team wins). Investing can be as simple. I made a simple chart, improved it with help from others in the stands, and have given myself some additional confidence in the position of the company, the stock, and my investment.
I don’t know what will happen to MicroVision or MVIS this month. I know what I want it to do, (Conservative Estimates). I know what it can do. I’ve also seen what it’s done. Maybe this time next month, the company, the stock, and my portfolio will have finally sprung ahead with the catalysts from the spring. I just hope it doesn’t fall.