MVIS?

[Groovy]

Hi, folks.

I'm really horrible at picking individual stocks, because I'm always looking for high-risk, high-reward, and the 'risk' side of things often bites me you-know-where. Exactly, on the ankle. I've gotten some good advice on here in the past, so I was wondering if anyone had ever looked at a company called Microvision (MVIS), and had any thoughts they were willing to share.

Some Background:
Mircovision owns a huge amount of pico projection IP (think about a projector small enough to be embedded in your smartphone) pertaining mostly to 'Laser Beam Scanning' technology -- It uses small Red, Green, Blue diodes to rapidly paint each pixel on a surface. A year ago, Sony announced that they were working w/ Microvision towards developing a pico projection module. Texas Instruments currently dominates the pico projection space, but it's a market that hasn't really taken off (and may never, but there's plenty of potential).

This should give you a sense of my take:

Major Pros:
* No debt
* Working w/ Sony (and had some component orders late last year, presumably for Celluon product launch - see below)
* Some technical advantages over competition (LCOS, DLP): size, always-in-focus laser, no fan needed
* Laser diode prices (esp. Green) are coming down
* Recent 720p product launch (by Celluon, using Sony engine w/ MVIS tech).
* Huge potential upside (Standalone pico projectors, embedded cellphone, automobile HUDs, Virtual/Augmented reality, etc.)
* Even a niche might be enough for big investor returns
* Potential for more products w/ their 'PicoP' technology coming as early as this year (Possibly Microsoft Hololens, possibly products directly from Sony, a Fortune-500 company's smartphone product targeting 2H 2015).

Major Cons:
* Still in the red
* Laser safety (Regulations may limit how bright the output can be)
* Past results (Check the historical stock price, which was at over $500 (pre-R/S) around the year 2000; lots of fizzled attempts at commercialization)
* As w/ any high-risk pick, potential for dilution, delisting, bankruptcy

Of course I haven't captured everything.

My personal thoughts are:
1. Go all in and sell when this is at $250 in late 2016.
2. Become rich, and provide three children out of wedlock to a one-armed french prostitute named Lucille.
3. Retire to a small shack with a fake name in Oregon.

But, I've never given a shack a fake name. Looking forward to hearing if anyone has any thoughts. Thanks.

 

[MooreBonds]

Some Background:
Mircovision owns a huge amount of pico projection IP (think about a projector small enough to be embedded in your smartphone) pertaining mostly to 'Laser Beam Scanning' technology -- It uses small Red, Green, Blue diodes to rapidly paint each pixel on a surface. A year ago, Sony announced that they were working w/ Microvision towards developing a pico projection module. Texas Instruments currently dominates the pico projection space, but it's a market that hasn't really taken off (and may never, but there's plenty of potential).

I haven't investigated the company yet, but sounds interesting. My first question would be: if they were working on this in 2000, and here it's 15 years later - what have they done in the meantime? Are they still putzing around with this technology? I realize component prices need to drop to reach a mass-market level, but come on - if you are still R&Ding a concept 15 years later, what will it take to finally reach the "end result" where you're ready to start commercialization Do you realize how many new technologies have already come out full-force in that timeframe?

What proof-of-concepts have they come out with? Anything at Consumer & Electronics shows yet to showcase to vendors and manufacturers?

Also, what are the share counts like? Is this a case where you have 100 million shares that they've sold over the years to finance things, and you'd need insane product sales volumes to have any hope of making money - and even then, the earnings/share would be miniscule due to the huge share count they've issued to fund operations?

 

[Groovy]

Hi, MooreBonds.

Great questions! My "background" information was a little brief. They've actually re-focused themselves around pico-projection since the late 2000s. They used to work on bar-code scanners and other such products before then.

They've showcased at CES, and brought some low-lumen standalone pico projectors to market in 2010 and 2012, IIRC by themselves (the showWX and showWX+). These were 10 and 15 lumens products respectively, and at the time, they didn't have direct green laser diodes, so they had to rely on synthetic ones which were more expensive probably by an order of magnitude over what they might cost nowadays. I suspect that the engine might still be a bit too expensive to put into a mobile phone currently, but I also think there are enough opportunities to keep afloat and get in the black until that happens. The current manifestation of their technology via Celluon was rated at 32 lumens -- not overwhelmingly bright, but 1) they're not exactly competing to replace televisions and 2) their contrast ratio is extremely superior to the competition (they just shut the lasers down to achieve real black) - 80,000:1 versus about 1,000:1 for the competition. They've received good reviews from a number of sources.

The biggest hurdles, from what I've read have been Green lasers and laser speckle. Red and blue lasers (since Blue-ray) have been around for a while, but green lasers are still catching up on cost and availability. Sony is one of the companies that makes them (from what I've gathered, through a partnership w/ Sumitomo), so they probably know enough about their availability to be comfortable partnering with Microvision (see announcement from Feb 20, 2014, where they identified Microvision in the footnote). MVIS has some speckle-reduction patents, and I haven't seen any mention of speckle being a problem in the Celluon PicoAir/PicoPro reviews.

From the business side of things, the CEO has said (and my words may misrepresent the message) that Microvision has had to invest in building the path to market -- their business development folks have worked with OEMs/ODMs on component development/licensing, application licensing, OEMs on delivering branded products and with retail channels to get those products out to consumers. They have some slides from their shareholder meeting last year (which I attended) that might describe it better than I can. See slide 9.

They have about 45,000,000 shares outstanding after an 8:1 reverse split a few years ago. Looking at the embedded mobile phone opportunity only: There were about a billion smartphones sold last year. Let's say that they find themselves in 1% of those, at a conservative component+royalty sum of $10/unit, that's $100,000,000. Maybe not quite one-armed-french-prostitute type returns, but still if you apply a 20x EPS multiplier, that's about a 20-bagger (current PPS = $2.19).

 

[bad_LNIP]

I got a better plan, take all the money you are going to invest in this. Go to las Vegas and find the first american style roulette wheel, not European BC those are a ripoff. Take everything and put it on black. Trust me...you can't lose and you seriously have a higher expected return.

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[Groovy]

Thanks for the opinion, bad_LNIP. Sounds like you're not a fan. I usually lose all the money I take with me each time I go gambling. I'm not a fan of Vegas.

 

[bad_LNIP]

People call me a risk taker and I think it is a REALLY bad company/idea. Here's a serious alternative. Sell cash secured puts 2% otm on spy or iwm. Research bxm to find out why

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[pb4uski]

Google "diversification".

 

[Sunset]

MVIS is still around.

I recall looking into you about a decade ago due to the "hot" projector stuff they were working on, going to take over the world.

Throw your money away if you want, or toss it out the window, either way it will be the same.

Can't take the stress of missing the boat on this winner, then buy a couple dozen Leaps going out 2 years, and sit back and watch the fun. That way you won't lose too much.

 

[Rothman]

I got a better plan, take all the money you are going to invest in this. Go to las Vegas and find the first american style roulette wheel, not European BC those are a ripoff. Take everything and put it on black. Trust me...you can't lose and you seriously have a higher expected return.

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No, I don't think this is analogous to betting BLACK or RED but much more like betting GREEN, wait that's still 1/37 so maybe too optimistic, between betting green and winning lotto, calling this investing is more than a stretch.


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[Groovy]

Thanks for the perspectives.

 

[clifp]

So I spent 5 minutes looking at the financials on Morningstar. They are ugly I especially don't like the declining sales and 20x price to SALES ratio. The executive compensation of $2 million for a company with 64 employees and 4 million in revenue is beyond crazy IMO.

This has all the makings of zombie company, one that would be much better off if somebody put it bullet in their head and let people get on with their lives.

FYI, I bet everybody owns a piece of this dog Vanguard Total Stock Market seems to be the biggest owner...

All that said, it really depends on you Groovy. If you work industry and/or you have specialized knowledge of the technology (and it sounds like you have at least some), you maybe a lot more knowledgeable than who analyst or two who cover the stock.

At first glance $10 seems very high ASP for a cellphone chip, but 1% maybe conservative if it really works. But I know very little about the market.

If you put in 1/2% of so your networth and you get a 20x than congrats, but this is much closer to Angel invest than regular investing, and by far the most likely outcome is you'll lose your entire investment.

 

[Groovy]

Thanks for the look, clifp.

I agree w/ everyone on the 'risk' factor. I'm not in the industry, but I have looked at high-level information about the tech, the competition's tech, and some of the recent (past two years) developments.

I don't claim to be a guru on the tech or even the industry or even stock-picking in general, but I feel I've gotten some sense of what (at least to some degree) 'success' (in terms of pico projection) will be, and approximately what it'll take for MVIS to get there (unless some other disruptive tech decides differently).

I suspect that most of the advice I'm getting on this forum is the standard sage advice: "Betting on penny stocks is nuts!", which I would completely expect from a community like this. I've taken that advice in the past, and normally I would agree with it. That said, this is an individual securities forum, and I'm looking at MVIS individually, so I'm trying to consider the advice objectively. The obvious risks aside for the moment, there are some things that shouldn't be overlooked: No debt, relationship w/ Sony, good tech. If things come together, I'm optimistic.

I've gone against the grain this time, and put some money that I'm willing to lose on Black, and today's announcement of a non-exclusive deal signed w/ Sony is quite encouraging. At a quick glance, terms appear to be $8 million up front (almost 2/3rds of MVIS' annual expenses) along w/ royalties and additional component sales.

The module includes a MEMS-mirror based display engine -- not just an individual chip. I believe an entire camera module in a cell phone can cost around $20-25, and I expect a projector module to cost more, so I don't think an MVIS share of $10 to be too unreasonable.

MicroVision: Investors: News Release

Like MooreBonds said, I find it "interesting". I'll probably leave my money in the stock for a while, and see how things play out. Thanks again for the perspectives.

 

[bad_LNIP]

Groovy I don't necessarily think penny stocks are nuts per se. I just think this is a terrible investment and more akin to gambling with long odds than anything. I am a risk taker, but this isn't how I would take a risk. I would rather sell covered 100 strike puts on gild or take a flyer on arcp or sdrl with a 9 month LEAP call than put any money towards this. At least with those other trades your risk is defined and limited.

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[Groovy]

Thanks, bad_LNIP.

I'm curious about what specifically about MVIS makes you think it's a terrible investment. I've seen a few general negative sentiments, where I haven't been able to identify the specific reasons. Is it specifically because of past performance -- the fact that they've been in the red for so long? Your perception of market demand for this kind of technology? General risk of bankruptcy? Technical analysis?

If it's just a general sense of the company based on what you've read so far, I can accept that. I'm trying to cover as many bases as possible -- i.e. Trying the answer the question for myself -- are there unknown unknowns that I should be thinking about?

Thanks.

 

[clifp]

I hope it works out for you. Having done similar things with varying degrees of success, it's hard to fault you. Just a word of caution my BIL is generally conservative with investing got all excited about a bio tech with a cancer drug, he got in early and rode it up to 15 buying periodically on the way. He even did something he's never done before recommended to friends and family.

Well the cancer trials didn't go well and the stock is now a penny stock.

So as I suggested keep the investment to a percent of two of your investments.

 

[Groovy]

Thanks, clifp. Sorry to hear about your BIL's experience.

I appreciate the advice. I bought a biotech in my early twenties (over a decade ago), based solely on a friend's suggestion. I was just getting into investing, and it turned out to be one of my (many) mistakes. I've learned that I just can't play biotechs. I've learned that I'm more comfortable with consumer technology, based both on my personal experience and the fact that I have people around me that I can discuss it w/ on a day-to-day basis.

 

[bad_LNIP]

Groovy-

It is simply super, super speculative and I can think of a million other things/ways to invest, some of which I have already stated and even those are speculative, but somewhat worth the risk. I'm not entirely joking about gambling and expected returns. The biggest question I have is when/how is the company going to make money? I can't answer that with your selection, like at all. By comparison:

SDRL is a play on oil. Not sure what is going to happen in the near/mid term with oil. Currently, SDRL makes money, although that is going to get more difficult if oil remains low, but they have some big time management in place. They have macro issues in play but good management and assets.

ARCP- new management in place and they still have solid assets: 4,000ish properties that are paying rent despite some major league accounting/management issues. They have rock solid assets, but um not so rock solid management.

BOTH of these are speculative investment ideas that may pan out in the future, to varying degrees. I'd bet more on ARCP than SDRL, but I have zero dollars in either one right now and no real plans to do much other than watch for right now, so that tells you how willing I am to put my money on these. Both of these companies have billions and billions of dollars in valuable property/assets, and that is worth maybe buying some LEAP calls IMHO. That's about it.

 

[Groovy]

Thanks for the perspective, bad_LNIP.

I also appreciate the suggested alternatives. I'll take a look.

 

[Sunset]

My experience with MVIS was a number of years ago. All the wonderful exciting news about their upcoming deals, their great projector, yadda yadda yadda.

I'm totally fine with investing in penny stocks, high risk stocks, speculative ventures, and have done it more than once.

My earlier comment was about MVIS, and its exciting news.... just like last time..

So I bought some options, dreamed of a small warm island..... and lost some money

Maybe this time it will be different, but if they were so smart, they would have been a success long ago, and I'd be sitting on the beach !

 

[Groovy]

Mmm. Small, warm island.

Sometimes the ecosystem won't let you succeed no matter how smart you are. Or, maybe they're not that smart at all. :/

I'm kinda psyched about the pre-market announcement this morning. Not sure how these kinds of deals are usually structured -- i.e. Can anything about future royalties/component orders be gleaned from the amount of the up-front licensing fee? For example, are there common business practices around ratios of up front fees to per-unit royalties.

The 'gamble' I'm taking is that I'm hoping that diode prices and other prices have come down since the promise of several years ago, and brightness and picture quality have gone up to the point that this tech can be utilized in high volume products in the next year or so. And, that the tech is still good enough that the competition isn't there yet.

 

[Groovy]

Revisiting this this thread with some thoughts after 10 months. In that time, MVIS popped into the $3s, and has recently come back down into the $2.40s. 1-year returns have been 26.9%, although that's mostly due to the SONY announcements early last year.

They've got a deal in place with SONY and Sharp is releasing a product in Japan w/ their tech (not sure how well it will sell), and a number of products incorporating their technology are starting to come out. They also had an arrangement with Pioneer a few years ago, and...at first glance at a video from CES that I saw, it looks like Pioneer is bringing back their laser scanning tech in a HUD, now that green lasers are more widely available. The Lenovo Smart Cast projector phone concept from last year also might be using their technology. I read on a review site, I believe, that they're targeting June 2016 for release, but who knows.

Sony has restructured, and they're spinning off a different company, Sony Semiconductor (IIRC, that becomes formal on April 1), which focuses on the successful image sensor portion of their business as well as pico projection. Sumitomo (partnered w/ Sony) has created a tiny package that contains RGB laser diodes. And, STMicro is in the standalone pico projector that Sony is currently selling.

Last year, Sony put in a $14.5 million order in March. Sony's fiscal year goes from April-March. It's obviously still high-risk, and I know that risk is a dirty word for many people. There's a large number of shares shorted, which makes me wonder what they know that I don't. I suspect that it's based solely on historical performance. Institutional ownership is nice. My timeline/target may be off, but I'm still bullish on the prospects in the next few months, and over the next few years.

 

[Groovy]

Finally paid off

Revisiting this thread after several years. Well, it took a while, but this one finally paid off for me. I sold about half of my shares during the pre-christmas spike and made some money. Wish I could have held out until Jan, but I just didn't see the big price rise as sustainable. I think it's mostly due to LIDAR speculation.

It's come down a bit since then, and I wouldn't be surprised if it dipped back into the 4.xx, 3.xx or even 2.xx range in early 2021. They're looking to sell the company. Maybe that'll happen in 2021 -- maybe piecemeal, but who knows at what price.

The last 5 years have been quite a roller-coaster. I lost a bunch of money on the way down from $3.xx to $0.15. But, COVID-19 aside, 2020 has been a great your for MVIS, going from $0.15 to about $9 at the peak. I did average down, but wish I had held more for the crazy December run-up.

They're in the Microsoft Hololens 2, but that's not a super-high volume product. Hopefully that's a stepping stone for them. I'm going to leave some money in this one, and maybe increase my share count if they go back down under $3.

 

[Groovy]

BTW, I recognize that investing in this stock was/is a big risk. I didn't go "all in", and I wouldn't go "all in" on any individual stock.

 

[harley]

So, just out of curiosity, what was your annual gain vs. just investing the money in the S&P? I speculate occasionally, and it's fun to hear success stories. Or educational to realize you did all that extra work for no extra gain.

 

[Groovy]

So, just out of curiosity, what was your annual gain vs. just investing the money in the S&P? I speculate occasionally, and it's fun to hear success stories. Or educational to realize you did all that extra work for no extra gain.

Good way to look at it.

I've done some trading over the years, so I'm not exactly sure what my cost basis would be, but this stock definitely presented lots of "buying opportunities". You can probably get a general sense of my gains by assuming I've averaged in bit by bit over the past 5 years, investing some every 6 months, with a slightly large investment when it was down at about $.25 earlier this year, and another similar-sized chunk at $1.75 this year, on the way up.

I guess the moral of the story is timing is everything. :/ If I had foresight, I would have put that money in the S&P until early this year, and then moved it into MVIS.

https://www.google.com/finance/quot...WY9AG4Q3ecFMAB6BAgBEBk&comparison=NASDAQ:MVIS