Meme Stock Or The Phoenix?
For anyone who hasn't been closely following the automotive and industrial Lidar sector you may not have noticed the very large run up in Microvision's share price over the last thirty days. Over 200% without any recent press releases or SEC filings.
For reference:
Ouster moved 55% over the same period, likely related to landing two supply agreements and beating Q1 2023 revenue guidance
Innoviz went up 15.7%, Luminar 10%, Cepton 5%, and SPY 3.7%.
So the question is, why? (spoiler alert: I don't have the answer, only speculation)
Let's take a short trip down memory lane.
It's February 2020, Sumit Sharma has just been appointed CEO, the EPS of every quarter for the last few years has been negative, and negotiations for supplying an interactive display module (laser beam scanning based) to an OEM has fallen through. Headcount is reduced by 60% to stay afloat, development for automotive grade lidar continues, and strategic alternatives are being explored (license technology, sell a vertical, sell the company, etc). Rough times.
March 2020 Microvision announces transferring their laser beam scanning display engine production from their site to their customer, referred to as "April 2017 customer." Prior to this there's speculation the customer is Microsoft and Microvision's component is key to the Hololens 2 augmented reality product.
April 2020 a redditor known as u/s2upid from the r/MVIS board releases a teardown video of a Hololens 2 product, confirming Microvision components are present and the "April 2017 customer" is Microsoft. (see https://www.youtube.com/watch?v=OmiQvjQuFqQ)
November 2020 key progress is announced around first generation automotive lidar sensor, specifically range at 200m, resistance to sunlight and other lidar sensors. Share price is floating around $1.8. Gamestop (GME) around this time is $3.
By end of December GME is ~$5, Microvision (MVIS) ~$6.5. At the time the only commonalities between the stocks was high short interest and poor financials.
January 2021 GME experiences the start of one of the longest and greatest short squeezes, MVIS is in $7 - $8 range.
February 2021 MVIS is trading in the $20 range.
Meanwhile Microvision continues executing the development of their automotive grade lidar, pivoting their 20+ year expertise in laser beam scanning and display systems. The time to turn this business around is now. The following announcements are made throughout the remainder of 2021:
- 2021-02-10, MicroVision Announces Progress on its Automotive Long Range Lidar A-Sample
- 2021-02-16, MicroVision Announces $50 Million At-the-Market Equity Facility
- 2021-02-22, MicroVision Completes $50 Million At-the-Market Equity Facility
- 2021-03-02, Seval Oz Joins MicroVision Board of Directors / Director Bernee D. L. Strom Steps Down
- 2021-03-11, MicroVision Announces Fourth Quarter and Full Year 2020 Results / Announces Retirement of General Counsel David Westgor
- 2021-03-24, MicroVision Announces Retirement of Board Member Yalon Farhi
- 2021-03-31, Microsoft awarded $22B contract for IVAS
- 2021-04-28, MicroVision Announces Completion of its Long-Range Lidar Sensor A-Sample Hardware and Development Platform
- 2021-04-29, MicroVision Announces First Quarter 2021 Results
- 2021-06-03, Jefferies blocks short sells on GME / AMC / MVIS
- 2021-06-10, MicroVision to be Added to Russell 2000 Index
- 2021-06-15, MicroVision to Attend IAA Mobility 2021 Show in Munich (later in year)
- 2021-06-17, MicroVision Appoints Drew Markham as General Counsel
- 2021-06-21, MicroVision Announces $140 Million At-the-Market Equity Facility
- 2021-07-26, MicroVision Hires Dr. Thomas Luce to Lead EMEA Business Development and Announces Opening of Germany Office
- 2021-08-04, MicroVision Announces Second Quarter 2021 Results / LRL product available for sale in small quantities in Q4 2021
- 2021-08-31, Track testing teaser on social media
- 2021-09-06, Microvision at IAA (6th - 12th) / first public demonstration of lidar product family
- 2021-09-08, More track testing teaser videos on social media
- 2021-10-14, U.S. Army postpones its $22 billion Microsoft augmented-reality headset deliverables to late 2022 (due to waveguides / need to reduce FOV)
- 2021-10-20, MicroVision Announces CFO Transition
- 2021-10-28, MicroVision Announces Third Quarter 2021 Results
- 2021-11-15, MicroVision at DVN Lidar conference (15th - 16th)
- 2021-12-01, MicroVision to Participate in LiDAR Sensor Standards Consortium
On June 3rd 2021:
(Bloomberg) -- Jefferies told clients Wednesday its prime brokerage arm will no longer allow the execution of short sells in GameStop Corp., AMC Entertainment Holdings Inc. and MicroVision Inc., according to a memo seen by Bloomberg News.
“Until further notice, Jefferies Prime Brokerage will no longer offer custody on naked options in GME, AMC and MVIS,” the memo noted. The firm will no longer allow the execution of short sells of those securities, the memo continued, noting that other stocks may be added to that list.
Bloomberg News
This is the first real confirmation that MVIS trading activity is related to GME, AMC, and other "MEME" stocks.
Additionally management of Microvision continued to explore strategic alternatives where many speculated Microsoft would be a potential suitor for acquiring the company whole or the AR display technology vertical. More fuel to the fire. MVIS share price was in $14 range during August 2021.
From August to December 2021 share price started settling back down to reality based on fundamentals, no acquisition had been made on MVIS or IP, sufficient short positions had been covered, new ones opened, still negative EPS. By January 2022 broad market conditions had shifted, SPY was heading down, growth and tech stocks getting hammered, MVIS was trading in $2.5 - $3 range.
Despite the massive swing in market cap Microvision persisted, executing their strategy, developing their claimed "best in class" sensor when considering all OEM requirements and SWAP-C considerations. In December 2022 they announced their plans to acquire Ibeo (and acquired shortly after), another lidar supplier that had spent years upon years developing validation and ADAS software which they plan to incorporate directly into their sensor to provide a one box / turn key solution to auto OEMs.
For a much better recap and understanding I recommend watching their Investor day event from April 2023:
Now back to today (6/6/2023), why has Microvision's share price jumped over 200% in the last thirty days? Management has stated they expect to be awarded one design win for their long range highway sensor (MAVIN) by the end of this year for large volume (millions of units), much larger than any previously awarded contract for lidar in automotive. The clock is ticking. It's possible someone has gotten wind of a deal about to be announced but in my opinion I'd expect a runup in share price a few hours or days prior to announcement, not thirty days early.
Instead, it's more likely short positions are being closed, whether that's due to liquidity shortages spurred on by Federal reserve trying to reign in inflation, or shorting entities "getting out" before an auto OEM design win is announced I don't know. As of 5/15/23 the short interest for MVIS is 48 million shares
| SETTLEMENT DATE | SHORT INTEREST | AVG. DAILY SHARE VOLUME | DAYS TO COVER |
|---|---|---|---|
| 05/15/2023 | 47,644,922 | 2,013,633 | 23.661175 |
| 04/28/2023 | 47,141,424 | 2,138,086 | 22.048423 |
| 04/14/2023 | 46,312,719 | 1,604,814 | 28.858621 |
| 03/31/2023 | 44,546,347 | 2,674,463 | 16.656184 |
| 03/15/2023 | 41,712,250 | 2,046,675 | 20.380495 |
| 02/28/2023 | 40,385,526 | 1,452,407 | 27.805929 |
| 02/15/2023 | 40,059,438 | 2,641,080 | 15.167825 |
| 01/31/2023 | 38,112,413 | 2,448,603 | 15.564962 |
| 01/13/2023 | 39,044,853 | 1,664,108 | 23.462932 |
| 12/30/2022 | 39,501,062 | 1,976,493 | 19.98543 |
| 12/15/2022 | 39,620,254 | 1,338,416 | 29.602346 |
| 11/30/2022 | 39,367,230 | 1,231,163 | 31.975644 |
| 11/15/2022 | 38,868,244 | 1,988,077 | 19.550673 |
| 10/31/2022 | 40,464,738 | 1,634,285 | 24.759903 |
| 10/14/2022 | 41,866,628 | 1,525,387 | 27.446561 |
| 09/30/2022 | 41,391,243 | 1,730,197 | 23.92285 |
| 09/15/2022 | 41,103,424 | 1,885,933 | 21.794742 |
| 08/31/2022 | 41,341,105 | 2,072,938 | 19.943242 |
| 08/15/2022 | 43,586,928 | 2,973,880 | 14.656586 |
| 07/29/2022 | 43,398,102 | 3,234,848 | 13.415809 |
| 07/15/2022 | 42,189,403 | 2,359,740 | 17.878835 |
| 06/30/2022 | 41,750,958 | 3,112,967 | 13.41195 |
| 06/15/2022 | 41,059,528 | 2,743,133 | 14.968114 |
https://www.nasdaq.com/market-activity/stocks/mvis/short-interest
Look out for the next short interest update on Nasdaq, how much will have been chipped away? Is Microvision setting up for another short squeeze? How will this align with timing of an OEM design win? While short squeezes are temporary and not necessarily seen as true shareholder value built by the business they could provide good opportunities for the company to raise capital and reduce shareholder dilution, all necessary to reach SOP and cash flow break even.
Exciting times ahead...