Next week is MicroVision’s annual stockholders meeting. The amateur grammarian in me would like to tweak it to read the annual stockholders’ meeting, as if the stockholders owned the meeting the way they’re supposed to own the stock and the company; but I realize it will be a meeting of a small percentage of the stockholders and that the meeting will be owned by the corporate officers and board members. Of course, the corporate officers and board members are also stockholders, and probably own or control more shares than any collection of individuals invested in the stock. Maybe that explains the way such events are run, despite the spirit of the SEC regulations. After years of optimistic expectations followed by disappointment, this year I am preparing myself with lowered expectations that I hope will be positively refuted. Why, not? It’s worth a try.
For several years, MicroVision has seemingly been on the cusp of dramatic success. Being able to embed projectors into devices the way cameras are now part of so many devices suggests that the owner of the technology and the patents should be in a very good position. MicroVision has been in that position for years, and hasn’t moved from it. Any minute they could announce a significant deal that finally realizes their potential, but that hasn’t happened, yet.
From the perspective of conventional investing, MicroVision has been growing. The growth has been uneven, which means it doesn’t fit well into analyses and spreadsheets, which also means investors are more likely to look elsewhere; but, it has been growth. In 2015 they booked over $9M in revenue, a significant improvement over the nearly $6M from 2013, and ever closer to the number necessary to reach positive cash flow, and then profitability. That progression is impressive, especially considering their hurdles, limited resources, and competition.
The stock (MVIS), however, has followed a different path. Since last years stockholders meeting, the stock is down over 36%. Over the last five years it is down over 80%. Over the last ten years it is down over 90%. Ten years ago I thought it was a buy, which with even a moderate rate of return should put the stock up 100% instead. I expected much higher by now because MicroVision is not a conventional company with a conventional product.
When you can disrupt a major portion of the electronic display industry and enable applications that are as inventive as the smartphone (in my opinion, emphasis on ‘my’ and ‘opinion’) then valuations and growth can be dramatically higher. Evidently, that hasn’t happened.
One measure of the success of a company is whether they can continue operations. They’ve crossed that hurdle for decades. Dozens or hundreds of employees have been paid, received benefits, and grown their careers through that period. Corporate officers and board members have received similar compensation though with the special characteristics associated with executive compensation like stock.
I expect that everyone working in the company even more strongly feels the difference between the future potential and the current reality. The difference with the stockholders is that the only compensation has been free coffee, tea, donuts, and pens once a year. We also get to deal with the emotional stress of trusting analyses while witnessing painful portfolio performance. And then there’s the emotional stress that happens within relationships – but the anecdotes I’ve heard will remain private because discretion isn’t just polite, it’s vital between friends.
Since last year’s stockholders meeting, only one product has become available for sale, a portable projector from Sony. It is about the size of a smartphone, is far more capable than previous products, and may be the first of a line of Sony products. The walking, talking, robot smartphone called RoBoHoN should be available for sale about the time I publish this post. It will probably attract a lot of attention, but its high price and gimmicky design will limit it to a few, and probably won’t reach mass adoption that will lead to mass profits. Supposedly, another projector, the Viewsmart should be available by now, but I haven’t heard much about it. The Qualper smartphone is also supposedly available – somewhere. The smartphone with an embedded MicroVision projector was supposed to be a key milestone because years ago the CEO estimated that MicroVision would reach profitability about nine months after such an introduction. (Forward looking statement caveats apply.) Even Celluon used Twitter to tease that the PicoBit would be released by the end of April, with a surprise; and here is nearly the end of May without the news. (A pause while I check Twitter for an update. Nope. Not yet.)
If half of those products were readily available and selling reasonably well, this stockholders meeting might finally be the celebration many shareholders have been waiting for. We have one, and its reviews are more impressive than its sales.
Investing in companies, ideas, and people requires a variety of perspectives. As a stockholder, I have several reasons for owning the stock: investment returns, championing positive disruptive technologies, supporting local companies. Employees have a different set of incentives and motivations. Those of the officers and board are from yet another perspective. Success and failure are measured many different ways. It is nice when everyone smiles, but frequently at least one faction has a frown.
A week remains before the stockholders meeting. I try to attend every year even though each trip has cost the equivalent of several shares of stock. Between now and then are 160 hours, each an opportunity for good news to arrive; a wait that has been going on for 16 years. If you are a shareholder, I encourage you to attend because the story of the company and the stock is not being told in the numbers. I encourage any investor in any company to at least consider attending such meetings because the numbers aren’t the only story. The variety of perspectives in the room reveals the incentives, motivations, optimisms, and pessimisms that influence the company, the stock, and your portfolio.
If no new news arrives, I’ll arrive at the meeting expecting to take notes, as usual; to meet fellow shareholders, as usual; to politely and lightly meet with the officers and board members; and maybe to see a demo of a product or prototype that will entertain me. The lesson I’ve learned from MicroVision has been to lower those expectations, which is a sad lesson. But, all of the other times I’ve been wrong. Maybe this time I’ll be wrong, too – and that would be a good thing.