If you haven't already heard of Reddit's Wallstreetbets latest pump, here it is... ticker $MVIS. It all started when u/actor13cy posted about his $3.5M gain from the stock (which he just really likes btw!).
In the past week, Microvision has gained more than 150% ...that's 150% in just 5 days. That's also after it's gone up several thousand percentages in the last few quarters. So, what's the reason for this run? Well, it's likely another short squeeze like the one we saw with Gamestop (GME). Microvision's short interest is nearly 20% right now – which is pretty high.
In any case, let's look at the reason why u/actor13cy likes the stock, because there MUST be some fundamentals, right?
Microvision was founded in 1993, and develops laser scanning technologies that could be used in various industries. The company generates its revenues by licensing products and technology to manufacturers. Right now, it's in the middle of developing its LiDAR technology for use in autonomous vehicles.
Lidar is a method of measuring distance by shooting lasers and detecting how much time they take to return. The idea is similar to Radar but instead of radio waves, we use lasers. The technology is extremely accurate at detecting objects even up to millimeters.
Sure, this sounds sexy... but this isn't anything new. There are many LiDAR companies out there, including AEVA, Luminar, Velodyne, Aptiv, Veoneer, and others whom have pre-existing relationships with auto manufacturers for better chances in signing them as customers. Microvision, however, is working on a superior form of LiDAR, which is 4D (instead of 3D). But, AEVA, a company that recently went public via SPAC, has this as well.
Here you can see Microvision's CGI video that shows how the technology would work in real life... except we have yet to see it in action. On the contrary, you can find a ton of information and videos on AEVA's 4D LiDAR technology, it's investors/partners, and more to make it seem more viable and attractive.
Unless Microvision has a superior product, which I am not aware of, there's absolutely no fundamental reason to invest in it... unless they have a great history of profits in their near 30 years of existence... let's have a look at their financials.
Microvision has yet to record a profitable quarter in its 28 years of existence.
Microvision is in a capital-intensive business which requires constant investing, which can only be sustained by growing revenues. However, their revenues have yet to display any sort of growth, and are in fact near their lows right now.
In conclusion, Microvision is not worth investing at the moment, where it is trading above 600x its sales! This makes Tesla, who many argue is overvalued (trading at 25x sales), seem like a value play. Microvision will need to prove the superiority of its LiDAR technology, and then demonstrate how it will achieve scale. But first, it will also need to secure partnership with a legacy automaker. The chances of all three of these happening would be more than hitting a home run, but rather a grand slam. I would avoid Microvision, as it is just a gamble at this point. Instead, I'd consider looking into AEVA. But, more on that another day. Stay tuned!
Disclaimer: All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading does involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk of any trading you choose to undertake. You are solely responsible for making your own investment decisions. Owners of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission or with any securities regulatory authority. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. Reading and using this newsletter or using our content on the web/server, you are indicating your consent and agreement to our disclaimer.