One of the biggest bull/bear debates we have seen in a long time surrounds Microvision Stock (NASDAQ:MVIS). The bears claim that the company has already had its run since shares are 700% higher off the lows. The bulls point out the value of the company’s patent portfolio and the fact that Craig Hallum has been retained to sell either the whole company or parts of it. Taking a closer look, we try and decide which camp is correct.
First up, the bears are correct in saying that Microvision stock has had a heck of a run so far this year. This is why the bears have sold short over 10% of the float betting that Microvision stock will crash based on a buyout not happening or Microvision stock getting delisted from NASDAQ.
However, the problem with this line of thinking is that when you zoom out and look at where Microvision stock was trading at years ago, the stock is still deeply undervalued. Microvision stock was trading at $25 in 2010 and just under $5 in 2015. This implies there’s still significant upside to be had when you consider the value of the company’s IP. As we dive deeper, Microvision stock could be a big-time lottery ticket.
About Microvision Stock
First up, here’s a little background info for those that are not familiar with Microvision stock. MicroVision is the creator of PicoP® scanning technology, ultra-miniature sensing, and projection solution based on the laser beam scanning methodology pioneered by the Company. MicroVision’s platform approach for this sensing and display solution means that its technology can be adapted to a wide array of applications and form factors.
MicroVision has a substantial portfolio of patents relating to laser beam scanning projection and sensing. MicroVision’s industry-leading technology is a result of its extensive research and development. The Company is based in Redmond, Washington, which is also the headquarters of Microsoft Corporation (NASDAQ:MSFT).
A Sale Is Very Likely
Microvision has set the company up to be sold. The company has transferred responsibility for component production to its April 2017 customer and sold production assets, which lowered costs and working capital requirements. In addition, Microvision initiated a 60% reduction to our workforce and curtailed non-essential expenses. Sumit Sharma, MicroVision’s Chief Executive Officer, said last month:
“We are committed to finding strategic alternatives that maximize the value of the Company for our stakeholders. With the help of our financial advisor, Craig-Hallum Capital Group LLC, we have approached a global list of targeted companies and are diligently exploring all options including the sale of one or more of our module product verticals and related technology or a potential sale of the Company.”
Whenever a company appoints a new board member, the purpose is to bring that person on for their industry connections. Last week, Microvision stock added Dr. Mark B. Spitzer to its board of directors. What’s exciting about Dr. Spitzer is that in 2012 he joined Google X as Director of Operations for Glass, and later moved to the VR team at Google where he helped build expertise in VR hardware design. Dr. Spitzer said:
“I believe this is an exciting time to join the MicroVision board and I look forward to working with Brian, my fellow directors and management as the Company continues to explore strategic options with Craig-Hallum Capital Group, LLC, its financial advisor, for its impressive technology. I am thrilled to have this opportunity to help the Company navigate a path to success.”
Even though Dr. Spitzer retired in 2017, he has many, many contacts at Google where he was involved with their special projects. This gives him the inside edge in helping the company with an exit strategy.
Currently trading with a market cap of $182 million, we believe that Microvision stock is a potential winning lotto ticket. Delisting is no longer as a concern as the company has regained compliance with NASDAQ. While we cannot say for certain that a buyout will or will not happen, the odds are greater that one will. With Robin Hood traders piling in Microvision stock and the shorts getting squeezed, shares appear to be a discount entry opportunity at current levels.
Good luck to all (except the shorts)!
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Disclosure: We have NO position in NASDAQ:MVIS and have NOT been compensated for this article.