Friday, November 6, 2009

Microvision: Short Squeeze Coming Soon

Get ready for short squeeze fellow Microvision investors.

A fast-moving, virtually unstoppable phenomenon that will shock most investors and leave many speculators ruined, even as it makes some of you longs rich.

Right now, most traders are making the exact WRONG move at the exact WRONG time. Short interest in Microvision stock is skyrocketing─ at 8.4 million shares as of October 15th, as all the SHORT lemmings trundle on towards the cliff.

Get ready for a replay of the summer rally— only bigger, faster and even more brutal to those on the wrong side of the move.

First consider the news from this morning…

Opnext to Supply Microvision with Red Laser Diodes for Mobile Pico Projectors

FREMONT, Calif.--(BUSINESS WIRE)--Opnext, Inc. (NASDAQ:OPXT), a global leader in the design and manufacturing of optical modules and components, today announced that the Company has begun shipping its red laser diodes to Microvision for its PicoP® laser projection technology.

With this relationship, Opnext will supply red laser diodes for Microvision’s PicoP display engine. Potential applications for the PicoP technology include ultra-miniature displays for embedded or accessory applications for mobile phones, personal media players, laptops and future wearable display devices.

Laser-based microprojectors have a unique combination of features that are optimal for mobile device users, including infinite focus, rich color, and high contrast and resolution. Opnext’s red laser family of diodes play an important role in this rapidly emerging mobile-display market by providing customers with a visually rich multimedia experience.

“We are very proud that our red lasers developed for the pico projector market have been selected by Microvision, a true leader in the industry,” commented Gilles Bouchard, Opnext President and CEO. “This is a perfect example of how Opnext is driving new and exciting applications through innovation and partnership.”

Alexander Tokman, Microvision CEO stated, “Opnext is a leader in high performance red laser diodes for projection applications and we are pleased to be working with the Opnext team on this exciting endeavor.”

About Opnext

Opnext (NASDAQ:OPXT) is the optical technology partner of choice supplying systems providers and OEMs worldwide with the industry's largest portfolio of 10G and higher next generation optical products and solutions. The Company's industry expertise, future-focused thinking and commitment to research and development combine in bringing to market the most advanced technology to the communications, defense, security and biomedical industries. Formed out of Hitachi, Opnext has built on more than 30 years experience in advanced technology to establish its broad portfolio of solutions and solid reputation for excellence in service and delivering value to its customers. For additional information, visit


Here's the link...

The significance of this news is quite obvious…

“If Opnext is shipping the red laser diodes, then Osram is shipping the blue and green lasers as well.”

Think about it?

Why would Microvision need red laser diodes, if they did not have the supply of the blue and green from Osram? You do remember that Osram is the supplier of blue and green laser modules!

Here’s the link to that news…

Microvision Signs Multi-Year Agreement with OSRAM for Supply of Green and Blue Lasers
Published Monday, September 7, 2009, 18:55

REDMOND, Wash.–(BUSINESS WIRE)– Microvision, Inc. (Nasdaq:MVIS), a global leader in innovative ultra-miniature projection display and image capture products for mobility applications announced today that it has entered into a supply agreement with OSRAM Opto Semiconductors GmbH for the supply of green and blue lasers — key components of Microvision’s PicoP® display engine. The announcement is the second Microvision has made in recent months regarding procurement of green lasers for use in the company’s PicoP® display engine and accessory pico projector product called SHOWWX™.

Following recent success commercializing its blue laser technology, OSRAM has fourth quarter commercialization plans for its green frequency doubled laser for use in Microvision’s PicoP display engine. OSRAM is one of the world’s leading manufacturers of optoelectronic semiconductors for lighting, sensor and visualization applications.


In a nutshell, that means the second supplier of green laser Osram is on board with additional supplies and the quantities of SHOWwx laser PicoP projectors just more than doubled. With Corning and Osram both delivering on the green laser contracts, the quantities of SHOWwx that can be shipped now will increase month over month.

That leads me to believe, we can expect to see more announcements of purchase orders from OEMs and mobile phone operators in the future… month over month.

The recent pull back in MVIS stock price was due to the uncertainty associated with green laser supply. With Osram coming on board, with their superior and cheaper green lasers, the ball game has changed and the perceived uncertainty just got squashed in the bud.

We have discussed in my previous posts…

“Having established the huge market size [and consumer preferences] for pico projector lets move on to identifying the leading pico projection technology that hopes to fulfill the consumer needs…

Please read this very informative post on the subject…

Now consider this about the recent activity in Microvision stock…

Stock Volatility: Over the last few weeks, both the “Historical Volatility” and “Implied Volatility” have come down gradually. Currently, the HV is 80 and the IV is 96. Looks like we now have more believers [long] than speculators [shorts] on board. Also, this stock is now part of Russell 2000/3000 and as such is subject to small cap market volatility… which has been coming down in recent weeks.

Volatility is unavoidable in small-cap investing. It can be a gut-wrenching, stress-inducing part of the small-cap investing experience, or it can be the grease that runs the profit machine. Where a 3% move in Microsoft or McDonald's would be out of the ordinary, good or bad news can routinely move small caps' share prices more than 10%. It can be tough for an investor to handle, but the determining factor is self-discipline.

• Perform due diligence before pulling the trigger to buy or sell

Investors sometimes invest without understanding the company's business. Then, at the first sign of negative volatility, they finally scramble to look at the firm's financial statements. That's being reactive, not proactive. You need to understand a company before investing in it. If the stock happens to rally to unattractive levels while you're doing your research, you'll nonetheless be in a great position to buy when the stock inevitably dips. If the stock falls, you'll know more about the company and therefore be less prone to panic. Cognitive scientists have determined that uncertainty is one of the most stressful and painful emotional states. Prior due diligence reduces the element of surprise and is the most effective way of minimizing investment uncertainty.

• Due diligence does not only include checking the criteria for buying a stock. With rare exception, it should also include formulating the conditions for selling based on the stock's valuation. Because small-cap companies often have greater growth prospects than blue-chip companies, your reasons for selling a small-cap company are more apt to change

Stock Short Interest: Over the last few weeks, the short interest has gone up and now stands at 13% [8.38 million shares] of the float [63.03 million shares]. All in all, at the current low average volume per day, it will take about 10 days to cover… about 8.38 million shares short… trading 895,000 shares per day average over the last 3 months.

Stock Trading Range: For a period of four weeks [from September 21 to October 22] the stock traded over $5 in a very tight range of “$5.02 to $5.52”. We have seen some very volatile days on Wall Street in the last 10 days [from October 24 to November 4]… and the stock has come down to $3.70 and now seems to be holding at this level as a very strong support… and waiting for next announcement of news. The stock price has crossed under the 50 day moving average [at $4.50] and seems to have very strong support at $3.66 or so. This is where the stock price was before the commercial launch of SHOWwx [on September 15th] and three purchase orders in October. The reason for the stock price drop, in my opinion, is due mainly to the uncertainty associated with quantities of green lasers that are essential to fulfilling the three initial purchase orders.

Here’s the stock chart…

However, if you look at the P&F [point and figure] chart the stock is still in the uptrend channel with a “bullish price” of $8.31.,P&listNum=

Stock Holding: Institutions hold about 14.40% and the Insiders hold over 16.93% of the outstanding stock [63.19 million float on a fully diluted basis]. This means that over 68.67% of the float is held by retail investors. This is a very wide distribution of MVIS stock… a good sign for PPS support [during lean times] and PPS momentum [during good times] when institutions finally wake-up and come looking to take position in the MVIS stock directly… or decide to invest aggressively in small cap stocks indexed by Russell 2000/3000.

My technical indicators are forecasting another big run-up in the market and the MVIS stock over the next 6-8 weeks, or longer.

Most investors missed out in March and August. And most investors are missing out again right now.

Any pullback in Microvision stock price will be short-lived.

Anant Goel