Wither Or Whether MVIS

There are far more important things happening in the world this week, but for a few thousand people, the future of MicroVision and its stock (MVIS) was massively distracting. Rumors were flowing of great things, some terrific and some terrible. The fates of many companies are being tested. This was happening with MicroVision as well, but the possible outcomes were amplified, partly from the pandemic, partly from expectations. This one stock is one of the many stories that are lost in the crowd of content we’re currently experiencing. By the end of the week, neither the doom and gloomers were right, nor the cheerleaders. Welcome to the swings of fortune in personal investing.

My investing strategy that had worked so well for decades is commonly called Long Term Buy and Hold. (For details, look in my book: Dream. Invest. Live.) Dream Invest Live coverFind stocks I think are undervalued, hold them until their value is recognized, and maybe even sell them when they are over-valued. It isn’t a guarantee, but one friend called it a Get Rich Slow technique. I’ve owned shares in MicroVision for about twenty years. Is that slow enough? A bit more patience may be required.

If you’re interested in the company and why I am enthused about it, browse this blog’s posts that are tagged with MicroVision or MVIS. Basically, if the company succeeds with its technology, I can envision MicroVision’s tech doing to laptops and other such displays what laptops did to old CRTs. That’s a rather large market. (Massive understatement at no extra charge.)

Small companies with big ideas generate lots of stories. For years, I described MicroVision as a company that will either make headlines or go out of business. Disruptive ideas can be too radical. A few years ago they were finally getting into products which were actually being sold by major corporations like Sony. I thought the odds of going out of business were finally almost zero. Oops.

After that surge of products there was silence. No new products had been announced since September 2018. Evidently some contracts fell through, large corporations can shift product lines without warning their small suppliers, and competition was catching up. The CEO was replaced with another CEO. The company is typically reticent, and only broke that silence to suggest they might be cash flow positive or profitable by the end of 2019. That didn’t happen. The CEO was replaced with another CEO. Even less was being said.

Screenshot 2020-05-08 at 19.35.37

Google Finance

The stock dropped below $1 for too long, which threatened to have the stock delisted. Some see that as traumatic. I’ve seen other companies weather that without reverse splits or fancy financing.

Unfortunately, recently MicroVision announced “strategic” considerations, which was interpreted as being bought out. That’s seen as good and bad. Good in terms of getting something rather than nothing out of the stock. Bad in terms of a sign that revenues won’t arrive in time to pay expenses.

screenshot-2019-02-25-at-13.58.38Ah, but there were rumors about Microsoft’s next big product, Hololens 2. MicroVision components were in the prototypes. Great! But Microsoft moves slowly. Bad – for MicroVision. Neither company mentioned the other in anything official, but as long as the product was a success and the revenues arrived, that’s fine. The rumors had been around for over a year, hence my post from 2019: HoloLens2 And MicroVision. I didn’t pay much attention to the discussions on the discussion boards because most of it was speculation. Something was different this time. More people were on the stock boards. The stock started to move.

One commentor advised me to “load up now” because I’d waited so long. They were right. Maybe I should’ve. Within a month the stock went from a low of ~$0.15 (yes, fifteen cents, less than a quarter, only one dime and one nickel) to about twice that. By the beginning of May, it was ~$0.44. (Almost two quarters!) A few days later MVIS was over $1.70, and I was thinking that for once a stock tip was right, and I missed it.

Screenshot 2020-05-08 at 19.40.30

Google Finance

I stood by my reply, though. Buying on rumor is gambling or speculating. I’d done enough of that with MVIS. I was waiting for significant, positive, quantifiable news. Earnings were going to be released on Thursday. I might miss a jump by not acting, but I already had a position and decided to hold. (But, really, from $0.15 to $1.70 in under two months. And I watched it happen. But hey, no news, just rumors. Therefore, no action.)

Other folks were interested, too. Traffic to that year-old post I mentioned above, Hololens2 And MicroVision, spiked this blog’s traffic by a factor of twenty. Hence, I knew I’d be writing about MVIS this week.

In an ideal world, people would wait to hear the news before acting. In an ideal world, no one would be trading based on having heard the news early. (That can be illegal, but legalities are considered selective, by some.)

Days before the meeting, the price began to fall. Just before the meeting, the price was back down to under a dollar.

Screenshot 2020-05-08 at 19.42.02

Google Finance

The meeting did not have “significant, positive, quantifiable news”. There were lots of waffle words, no Q&A, and too little in general. The next morning the stock was under sixty cents. Today, Friday, it began to climb back up, finishing at $0.77.

The speculations begin again.

MicroVision has had similar swings in simpler years. Basically, the company has been in a series of startup modes, sometimes several within the same CEO’s tenure. I wonder if they’d stood still with their original strategy if the world would’ve come to them. Yet again, we are left with the mantra of “things will be better within the next six to nine months.” And maybe it will, this time. We’re also left with the realization that the cash available may only last fewer than six to nine months, or not in time to realize revenues.

These aren’t simple times.

There’s bad news. The pandemic has been disrupting supply lines, maybe including MicroVision’s. The company’s customers may delay product launches until the economy re-launches.

There’s good news. The devices MicroVision’s technology enables are potentially in demand. Hololens2 helps people work remotely. MicroVision’s tech may be enabling that display. Instead of touching an electronic display screen, MicroVision’s tech allows people to gesture in mid-air as if they were using an iPad. Robotic deliveries need sensors for the robots, and MicroVision has an innovative LiDAR solution.

No one knows which way it will go. That’s typical for startups. There’s even more uncertainty in the world, now; and even more for MicroVision.

This is a story I’ve been following for decades that I have always thought would be resolved in less than a couple of years. I’ve watched irrational exuberance about the technology, the company, and the stock. I’ve watched irrational pessimism in the investing market because of failed expectations, poor management communications, and a lack of demonstrated success. In my opinion (opinion, as in my guess), the present value of the company’s future revenues is far greater than the current stock valuation except for the risk that those revenues may never happen. The company and the stock probably won’t be properly valued until they receive and release news about significant, positive, quantifiable news – or until it is bought out as that is another way to define what the market will pay.

Do I think it should be resolved soon? Of course, I hope. The downside scenarios are so dull that I’ll simply shrug and hold until something happens. The upside scenarios are so exciting that I’ll enjoy them. Either can happen any day, or week, or month, but probably not any year. This is the time for something significant to happen. I’d like to be able to say I know which way it will go; but whether MicroVision withers or succeeds is too unpredictable. That makes MVIS a speculation at best, a gamble in many minds; but could yet be a phenomenal investment.

One thing is for sure, owning shares of a company like MicroVision isn’t dull. Hopefully, years of risk will result in decades of rewards. Stay tuned.

About Tom Trimbath

real estate broker / consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: https://trimbathcreative.net/about/ and at my amazon author page: http://www.amazon.com/-/e/B0035XVXAA
This entry was posted in Uncategorized and tagged , , , , , , . Bookmark the permalink.

4 Responses to Wither Or Whether MVIS

  1. Finn says:

    Very well written.

  2. Jim P says:

    Funny as I have been invested in MVIS for 20 years also !! I have a lot of the same feelings and thoughts. I think management and BOD have been awful and destructive to shareholders. I believed in the tech so never sold plus the pain of actually seeing my paper losses turn into real losses is to painful in itself so I just let it sit and hope. Not an ideal investing strategy but at least
    I still have some hope. Good luck to us all !!!

  3. delbert Davis says:

    Hope I get lucky on this one, even if Microsoft doesn’t buy them out I bet they will regret it in the future because mvis company is going somewhere with their B.A. technology.

  4. Heather says:

    Very well written!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s