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What do you do when the stock price of a company runs up before every earnings report only to drop 15%-25% the day after because the market has gotten a jolt from the results? If you are an investor in MicroVision, you have no choice but to accept it as par for the course. MicroVision (MVIS) is a stock that moves in extremes either way depending on the news.
Key Tech for Self-driving Vehicles
The company develops laser beam scanning technology. Its product PicoP, an ultra-miniature sensing and projection solution, is its flagship. In November 2020, it announced that it has made important progress in the development of its first-generation MEMS Dynamic Scanning Long Range Lidar (LRL) sensor module, including continued progress toward meeting key automotive industry requirements, which it believes will facilitate its development objective of producing hardware for demonstration and benchmarking by April 2021.
This tech is of great importance in the autonomous driving space which is expected to see a significant boom in the near future. This caused the stock price of the company to run up by more than 400% from 1.83 on November 10, 2020 to 9.27 on December 22, 2020.
Since then, the stock has fallen as low as 6.22 as the prospects have started to dim. This price rise and fall has been a standard feature of MicroVision stock.
Repeated Jolts
MicroVision reported revenues of $600,000 for the third quarter of 2020, compared to $1.2 million for the third quarter of 2019. The company’s net loss for the period was $2.8 million, or $0.02 per share, compared to a net loss of $6.1 million, or $0.05 per share for the corresponding period in 2019. MicroVision ended the quarter with $5 million in cash and cash equivalents, compared to $5.8 million at the end of the fourth quarter of 2019. The stock fell 21% the day after the earnings.
It was the same story when it reported numbers for the second quarter of 2020. Revenue figures were $600,000, leading to a loss of $2.3 million, or $0.02 per share. The stock fell by 25% the day after the earnings report.
Earlier in the year, MicroVision disclosed that it had failed to find customers for 2020 delivery and had to reduce its head count by around 60%.
On the Lookout for a Buyer
The company has made no secret of the fact that it is open to a sale. It has funded itself with capital raises as it has found few takers for its products. And now with barely any sales, MicroVision wants to find a buyer.
On the earnings call with analysts after the second quarter, CEO Sumit Sharma confirmed that the company is in negotiations with multiple suitors but nothing had come out of it. He reiterated the same after the third-quarter results.
“MicroVision is focused on pursuing a strategic transaction at the right value for our shareholders. Our focus is to drive to an agreement at a valuation that reflects the sustainable strategic advantage, we believe, our technology offers now and into the future. We are continuing to work toward this goal while maintaining expenses at appropriate levels,” Sharma said in a press release.
What’s Working for the Company?
MicroVision’s tech can be adapted to a wide array of applications and form factors. Its IP (intellectual property) portfolio has been recognized by the Patent Board as one of the top 50 IP portfolios among global industrial companies. It has also been included in the Ocean Tomo 300 Patent Index. The company is based in Redmond, Washington.
On December 29, 2020, MicroVision announced that it entered into a $13 million At-the-Market (ATM) equity offering agreement with Craig-Hallum Capital Group. The company can, at its discretion, offer and sell shares of its common stock having an aggregate value of up to $13 million through Craig-Hallum. Its working capital and capex should be safe for some time as it continues to hunt for a buyer.
“Completing development of what we believe will be the best-in-class lidar sensor for range, resolution and frame rate is an engineering challenge. So far, our team remains on track to complete our Long Range Lidar sensor sample in April 2021. We believe this financing will further solidify our balance sheet as we remain committed to pursuing strategic alternatives and establishing value for our shareholders,” said Sharma.
“We expect a stronger balance sheet will provide the Company with runway through 2021 and into the first quarter of 2022 to enable us to continue development of our lidar sensor while pursuing strategic alternatives,” said Steve Holt, MicroVision Chief Financial Officer.
The stock is trading at 6.89 right now and investors should be very wary of any news related to the stock as it is prone to wild swings. If the news is good, it wouldn’t be surprising to see the stock price double. If.