|My mid year review of MVIS|
INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.
MVIS (market cap $0.027B)
MicroVision, the company I've known for so long and yet continue to learn more about; like the fact that they capitalize the V. When'd they start doing that? Okay, there's much more to write about here, but I've written about them for so long that I have to find ways to make it entertaining for me too.
MicroVision is a company based on the innovative application of a moveable mirror mounted on a chip, MEMS technology. Move the chip fast enough and in the right pattern and light can be bounced out as a projector or in as a camera. Their primary business application is to create light engines for miniature electronics; e.g. displays and pico-projectors, though they have also produced a bar code scanner. The technology allows for radically reduced power, size, and cost for projectors that can be stand-alone or embedded in other devices like cell phones, dashboards, cameras, etc. If successful, their technology, products, company, and stock will be positively disruptive because the technology can be applied to many of the electronic displays that ubiquitously surround us.
People very aware of the company balked in the previous paragraph when I mentioned cost because one critical component, the green laser, wasn't even available until a few years ago, and is only now coming down in price. The company's first DVD-quality color pico-projector, the ShowWX from 2010 (disclosure: I own one), wasn't profitable because of the cost of that one component. The cheaper version is now available, but the next hurdle is really a ramp, not a hurdle. The factories have to make the green lasers in the millions of units per year before some of the most disruptive, innovative, and profitable products become available. Until then, MicroVision has to undergo drastic stock dilution. The price of MVIS has dropped significantly and resulted in delisting notices and a reverse split.
Product delays and high component costs have resulted in investor expectations of over-promise and under-deliver. And yet, the possible success is so appealing that many continue to hold, or lurk waiting to buy more.
I prefer to value companies based on "Present Value of Future Revenue Discounted for Risk" (is there shorthand for that?), but in MicroVision's case, the discount for risk is so broad as to make any estimate a pure guess. If MicroVision lived up to its ultimate promise, incorporated its units into as many display devices as possible, it would be easy to see MicroVision's market cap as a tenth of Intel's. That would represent a 4,000-fold increase in MVIS. That's extreme. The other extreme is zero, and the stock has steadily marched in that direction for years. Take your pick. Reality is probably in between, but where? (Anyone have a number for the total revenue of the electronic display industry? Who does make all of those displays for cell phones, laptops, monitors, tablets, and all of those devices at home that have sprouted displays in the last few years?)
I consider MVIS to be a Lottery Ticket Stock. It didn't start out that way, but that's where it is now. If it succeeds, everyone will know about them. If they fail, they'll disappear with a whisper; and considering how much of their money is now coming from Canadian investors, I won't be surprised to hear that it's all happening in London, Ontario.
DISCLOSURE LTBH since 1999. The first shares are gone and I have more than enough if the company finally succeeds and the stock reaches the heights I think are possible. Unfortunately, I may have to sell if I can't find a job or sell my house. (I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com . There's also a longer, and fairly popular, post describing the company and its situation. and a discussion of the annual stockholders meeting.)