Wednesday, September 22, 2010

Microvision: Stock Has Headline Risk

I’m probably the strongest supporter of Microvision and its current management… but if you were to read some of my recent posts, you would never believe that.

I have followed this company for more than 10 years and have been an investor, with millions of dollars at stake, for over 5 years.

Last 4 years have been the most excruciating and financially devastating period for me and hundreds of  Microvision investors that I personally know.

If you watch the ticker symbol MVIS, you will see that someone [or more than one someone] is selling a small number of shares at very low prices to spook the long retail investors into unloading their position… only to come-in to scoop-it-up by the bucket loads. This seems to be going on for several days now? While the net market value of Microvision keeps going to hell in a hand basket; the management stays totally aloof and silent. And that makes you wonder why?

Let’s face it, for the last four years, the traders and manipulators have played with MVIS stock like a Yo Yo… because they are able to exploit the headline risk associated with Microvision to their advantage. While the die hard longs just hang-in risking their hard earning investment dollar, the corporate management of Microvision hides behind the green laser curtain and blows the NDAs hot air up our stack.

For four years it has been the… same old… same old.

This stock has no backbone and has several headline risks going forward …

• first it was the green laser availability

• then it was the price of blue & green lasers

• next it was the brightness and speckle of projected image

• then it will be the debate of safety issue with lasers

• further down the road, it will be the anemically slow revenue and earnings growth

• then it will be the issue of poor margins

• and then towards the end of our journey [if we live to be 90+ years old] it will be the case of missing brass balls.

I have said it before and I’ll repeat it again…

“This company’s entire future lies with the green lasers… and to make the matter even worse, the corporate management hides behind the stack of backorders and NDAs. For the last four years, this company does not have much to show for new business development… other than polishing and patenting what was accomplished four years ago and they seem to be frozen in place─ like a deer caught in the dazzle of green light on the long road to the promise land.”

Unfortunately, the key issue may not be just the green lasers… but also the case of an ill conceived and misguided Business Plan or the lack of management execution. After fifteen years and $380 million dollars later, all we get is $2 million in 2nd Qtr 2010 revenues and $12 million in quarterly loss… all at substantial negative margins and lots of promises for the future.

There are many more headline issues facing Microvision and the slow bleeding in the price of MVIS stock is to be expected… especially when the corporate management keeps mum on important issues; and lacks the conviction, or perhaps the business savvy to manage investor expectation over so many years.

I didn’t think that I would ever say this, but here it goes…

Its tmie to cut dwon yuor psotiion szie and persevre yuor ctpaail.

Get it?

This is called hiding behind a stack of your abc’s and ─ as long as the first and last letter are in the right place─ you can play with the English language alphabet and still get your message across. The point is, if the corporate management has something to say and wants to get a message across… it can do so in so many different ways.

Longer the management of Microvision delays release of any significant news [of any kind], the lower the price of MVIS will go down. Here’s why…

With each passing day without any significant news, the smart money will convince you that at the moment Microvision don’t actually have a product. The product they are selling right now is the inferior and soon to be replaced by the second generation product they have announced recently. What we have, is an under illuminated novelty item that has a very limited appeal in its present configuration. They made the current technology obsolete last April when they announced that they have a 15 lumen 720 HD product solution… but that product wasn’t going to be available until some time in the future. But what that announcement did was to severely limit the market for what they had and would have for at least one more year.

You can imagine: “what a marketing blooper that’s going to be?”

The simple fact is that Microvision doesn’t yet seem to have a product that the market wants at the current prices and the product that the market may want is what they are developing… but that product and competitive prices won’t be available until the second half of 2011.

You don’t have to take my word for it. The market price of MVIS stock says it all. A company with any kind of near term prospects doesn’t trade at $2.11… after having traded at $5.85 in the recent past.

From an investor’s point of view; management’s total silence is shocking… because no one has ever asked for customer specific information yet they hide behind the backorders and the NDAs argument.

All the investors want to know: “do they see light at the end of this very long and very dark tunnel"?

[Disclosure: Based upon input from dozens of Microvision stock investors with net Long positions]