Every growth stock falls into 1 of 3 categories…
1. The Romance Phase
2. The Transition Phase
3. The Reality Phase
Most growth stocks tend to pass through three phases of growth… romance, transition and reality. By knowing which phase a stock is in, you can quickly determine whether the profits are just beginning… or the well is drying up fast. Needless to say, this can make the decision to buy, sell or hold significantly easier. And its decisions like these that will make or break your success in investing.
You may say that in case of Microvision, the romance is gone and the transition is at an end, and the reality of situation [green laser issue] has become clear. And in your opinion in this phase, the company’s entire financial future depends on the availability and the cost of green lasers. Since the company has made no effort to incorporate any other type of light source to power its PicoP Display Engine, the core of its entire product line, it is fair to say that Microvision will thrive or perish by the green laser sword.
Some of you have lived through the romance phase, which peaked in year 2000 with the MVIS stock trading well over $63… at a time when there were no real products, and just a few patents on a very promising laser based MEMS image scanning technology. Those that did not cash out after the romance phase, the most profitable phase, and are still holding the MVIS stock and they have battle scars to prove their passage through the three phases of growth in the life of a company. Now we are at the tail end of the transition phase, when blemishes appear and public’s perception of the company starts to diminish.
If you feel that we all have made a mistake in believing and staying too long in MVIS stock and are in the same boat at this point in time? We all have, for whatever the reason, stayed little too long in this stock and are now paying the price of dealing with uncertain future and muted enthusiasm of a product launch… that revolves around a core component from green laser supply chain! If that’s what you believe, and can think with a cool head and not point fingers, then continue reading, as I would like to share some facts, figures and analysis?
Microvision story is not over yet. It is, however, certainly the end of the romance phase and we are now successfully transitioning to the reality phase. If you dig deeper, you will find that it is just the beginning that is based on reality of Microvision’s financial and cost structure and will resume its momentum to renewed success based on improving availability and cheaper cost of green lasers… the Achilles heel to Microvision’s financial success. This may sound like a wish full conclusion to Microvision saga… but fortunately that happens to be the conclusion of my analysis based on findings of facts and figures.
So stay tuned and let’s continue with our analysis…
The Romance Phase: is the most profitable phase by far and is the one that you’ll want to focus on… that is, if you were lucky enough to be around during the early life stages of Microvision in year 2000. It’s in this phase that a fortune can be amassed very quickly, long before most investors are even aware that the company exists. Yet at some point, the stock’s price and its Relative Performance (RP) line will reach all-time highs. This tells you the Romance in the stock has peaked. This is when most analysts, if there are any following the stock, would recommend selling it. In case of MVIS stock, the first Romance peak took place in March of year 2000 when the stock traded in the $63 plus range.
The second Romance peak took place in June of 2007 when the management announced “Agreement with Motorola”. At the height of this Romance peak, the MVIS stock traded in the $6 range. It happened too quick [in less than two months] and the RP line indicated that it had not peaked and there was lot more momentum left for the stock to go still higher... to over $10 or so we believed. Also, the pico projector sector was just in initial stages of taking-off... as we know is happening right now. It took us a few months to realize the issues with SHG green laser technology and the resulting cost and supply constraints.
In hindsight, we may call it our greed that made us stay in this stock too long or may be it was our collective belief that there was more good news to come. How could it all start, take-off and crash in less than three months? Well, it did and the reasons are too well known to all of us so I won’t repeat them here.
The Transition Phase: can last from few months to several years. In case of Microvision, the Transition Phase started in September of 2007 when I first wrote about the technical issues that Corning was having with their SHG green lasers. This is when the blemishes appeared and the public’s perception of the stock started to diminish. It’s at this stage in the life of a company, like Microvision, that the company’s technology may fumble, the earnings may stumble [if there were any], the cash flow may turn negative [or cash burn may accelerate], the financing may disappear, the flaws in business growth strategy start showing-up in negative revenue growth [or as loss of revenue] and other issues start popping-up such as legal, financial, and key employee departures, etc.
Sooner or later the issues will get resolved and the company’s earnings will grow again… but only after the stock has bottomed and then, after an excruciating period, has started its next major advance.
Now we are at the tail end of the “Transition Phase”. During the Transition Phase, the blemishes [like technical problems with green lasers] appeared and public’s perception of the company diminished to such low levels as to bring the MVIS stock down to $0.80 in March 2009.
Many of the red-hot lovers who romanced MVIS on the way up have left the stock, and it's their selling pressures, driven by reduced perceptions, that have been pushing the MVIS stock down… and the bear market of 2008 hasn't helped, either. Every time a diehard long who had sworn to hold the stock forever gives up in disgust, the stock is pushed a little lower.
It's not the company's fault that Corning had repeatedly failed to deliver on the SHG green laser, a core component for making laser PicoP projectors. If the delay was reasonable, and not the 30 months, the MVIS stock would have traded rationally, based on earnings from a potentially gigantic global market. This stock would have been nowhere near as low as the 80 cents last March, and it would be certainly traded higher now than it currently is… at $2.69 and excruciating to hold it at this level.
But stock prices are determined by investors. And investors are people. People who fall-in and fall-out of love! People who buy with visions of profits and sell in disgust when their dreams are dashed! People who drive stocks to irrational heights and then sell them to irrational depths! That's what makes investing a challenge ... and very profitable, if you know what you're doing.
The Reality Phase: With Romance gone and the transition at end, the reality of the situation has become clear. In this final phase, the Reality Phase, the company could have taken one of the two roads… the road to renewed success… or the road to oblivion.
Microvision has struggled for over the last 30 months to deal with the core component─ green laser─ supply issue during the Transition Phase. All through this phase, Microvision managed to stay funded and fully staffed to aggressively pursue product development and continue with research to enlarge its intellectual property rights.
Finally, Corning has resolved its green laser yield issues and is now ramping production. Osram is coming on-line rapidly to become the second source of SHG green lasers… with a better, cheaper and higher yielding product. During the Transition Phase, Microvision management made some hard decisions to control cost, proactively raise funding─ even though it was considered unpopular with the investors, and aggressively pursued R&D to enlarge its IP portfolio and took measures to protect its intellectual property.
Over this last cycle, in my opinion, the MVIS stock price has bottomed at $1.96. The Transition Phase is over and the Reality Phase has kicked-in, or it will on March 8th after the earnings conference call.
It’s then; when analysis of the stock should become a little easier for investors who base their decisions on fundamentals. If the company's sales and earnings are growing, as I expect them to do very rapidly, the stock will rise, too. But it will do it in a far more rational manner, reflecting the reality of the company's sales and earnings growth potential over the next few years.
Before I leave you, consider this…
We are truly at the turning point in the history of Microvision, that some may call the “Validation Phase”. Because, that’s what the commercial release and the three purchase orders─ from global consumer electronic OEMs and the World leading mobile phone operator, represent …
• Validation of Microvision’s laser based PicoP display engine technology, its quality, its reliability, and a viable commercial fabrication & production milestone.
• Validation of performance and quality of PicoP display engine at the core of the world’s first laser based PicoP projector SHOWwx.
• Validation of Corning green laser technology, its reliability, and a viable commercial fabrication & production milestone.
• Validation of technical and performance superiority of laser based PicoP projector as compared to other two technologies on the market… like DLP from Texas Instruments and LcoS for 3M.
• Validation of consumer preference for Microvision’s PicoP projector: wide screen, high definition, longer battery life, 2D video with fast refresh without motion blur, small physical size, always in focus images for all of video [static, streaming, and broadcast] communications, and no waste heat generation.
• Validation of acceptable safety standard for laser based PicoP projectors in consumer use and adoption.
• Validation of speckle as a non-issue and as virtually non-existent with Microvision’s laser based PicoP display engine.
• Validation of fundamental design flaws of Microvision competitors: low resolution images, faded colors, short battery runs, longer throw distance, and requiring constant manual focus adjustments… and the waste heat, hot enough to cook eggs sunny-side-up.
• Validation of Microvision as a product company rather than just a R&D house with 200 issued and filed patents and with many more to come.
• Validation of global consumer electronic OEMs recognizing laser as a viable and superior alternative to DLP, LcoS and FLOCS technology.
• Validation of growing demand for Pico projectors from carriers and content providers on a global basis.
• Validation of consumer demand for quality Pico projectors.
• Validation of growing demand for green lasers and the ensuing competition in green laser product arena.
Microvision is ready as a supplier of laser Pico projectors to consumers and Pico display engines to its OEM partners… and offers the best of breed Pico display technology.
Is Microvision ready for prime time SHOWwx time and worthy of your investment dollars, consider this…
Consider the RISK vs. REWARD:
First, read the transcript of the Report “The Next Big Thing”. There are 40 pages to this very well written report and will take you an hour or so to read… but it is well worth it. Here's the link...
http://www.investorsdailyedge.com/21Century/TheNextBigThing.pdf
After reading this report on Microvision stock opportunity, you will understand why the Risk vs. Reward is compelling and the stock remains a strong buy for over 100 fold increase in price per share (PPS) in the next 4 to 5 years… by the end of 2014.
Five years from now in 2014, the stock could easily trade in the $300 to $500 range. Here’s an educated projection…
• Worldwide Market Size: 2 billion units [cell phones, laptops, smartphones, iPods, iPhones, iPads, camcorders, digital cameras, gaming devices, and mobile TV/Projectors etc.]
• Worldwide Market Size: 1 billion units [wearable see thru displays]
• Market Adoption Rate: 10%... 300 million units
• Microvision Market share: 15% of 300 million units… 45 million units
• OEM price: $90 per PicoP display engine
• Revenue: $4 billion
• Net Profit Margin: 40%
• Net Profit: $1.6 billion
• EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization: $1.5 billion [with operating expenses at $100 million]
• Interest Expense: $0 million
• Interest Income: $20 million
• Tax: $220million
• Depreciation: non cash and very small
• Amortization: non cash and very small
• Net Operating Income: $1.3 billion
• Earning Per Share: $13 on a fully diluted basis [100 million shares]
• Price Earning Ratio: 30 for a hyper growth company
• Price Per Share: $390 per share
In my book, the “Risk” is insignificant [may be 2% per year interest in treasury bills as the lost opportunity] as compared to the potential of making over 100 times your money in the next year 4 to 5 years… and that is on top of 4 times the money you have already made if you aggressively bought MVIS stock [at 80 cents] when recommended in March 2009.
Alex Tokman, CEO of Microvision, said in his March 6th earnings conference call: "the market demand for PicoP Display Engines will be larger than the supply."
This projection for 2014 could actually be low compared to the reality of the market place [like selling SHOWwx and its derivatives directly to US consumers] that will start to un-fold in the months ahead.
It’s ironic how we as investors act sometimes…
We chased MVIS stock to $63 during the “Romance Phase”; which peaked in year 2000… at a time when there were no real products, and just a few patents on a very promising laser based MEMS image scanning technology.
Today, with all the technology and production issues behind us─ with validation at hand, huge patent portfolio, OEM and Mobile phone carrier customer purchase orders, and recognition by industry like CES and MacWorld awards… we are now debating to buy or wait to buy the MVIS stock at $2.69.
What, am I missing something here?
Don't tell me it has something to do with hot milk!
Anant Goel
http://www.wealthbyoptions.com/
Showing posts with label Mint Wireless. Show all posts
Showing posts with label Mint Wireless. Show all posts
Saturday, March 6, 2010
Wednesday, February 24, 2010
Microvision: US Launch of SHOWwx in Late March or Early April
That’s the rumor up and down the supply chain.
Currently, so it seems, the emphasis is on shipping everything to full fill back orders from the existing customers… such as Mint Wireless, Uniden and Vodafone.
SHOWwx shipments in 2009 were very small and the quantities shipped blatantly fly foul in the face of publicly stated [or projected] quantities that we were made to believe. I don’t know how AT plans on covering his tracks to justify grossly misstated projections for quantities… but then again, he doesn’t have to because projections are just that─ projections.
I wish Microvision management comes clean with whatever it is; or was; or was said or done… just get-on with business at hand and move forward from this day onwards.
Anant Goel
http://www.wealthbyoptions.com/
Currently, so it seems, the emphasis is on shipping everything to full fill back orders from the existing customers… such as Mint Wireless, Uniden and Vodafone.
SHOWwx shipments in 2009 were very small and the quantities shipped blatantly fly foul in the face of publicly stated [or projected] quantities that we were made to believe. I don’t know how AT plans on covering his tracks to justify grossly misstated projections for quantities… but then again, he doesn’t have to because projections are just that─ projections.
I wish Microvision management comes clean with whatever it is; or was; or was said or done… just get-on with business at hand and move forward from this day onwards.
Anant Goel
http://www.wealthbyoptions.com/
Saturday, November 21, 2009
Microvision Announces Pricing of Public Common Stock Offering
Press Release
Source: Microvision, Inc.
On 9:41 am EST, Thursday November 19, 2009
REDMOND, Wash.--(BUSINESS WIRE)--Microvision, Inc. (NASDAQ: MVIS - News), a global leader in light scanning technologies, today announced the pricing of an underwritten public offering of 6.7million shares of its common stock at a price to the public of $3.00 per share. Microvision has granted the underwriters a 30-day option to purchase up to an additional 1.0million shares of its common stock to cover over-allotments, if any. Microvision expects to receive net proceeds, after deducting the underwriting discount and estimated offering expenses, of approximately $18.7million from the offering, or $21.5million if the underwriters exercise their over-allotment option in full. Oppenheimer & Co. Inc. and Thomas Weisel Partners LLC are the joint book-running managers and Craig Hallum Capital Group LLC is acting as co-manager for the offering. The offering is expected to close on November 24, 2009, subject to customary closing conditions.
Microvision intends to use the net proceeds of the offering for general corporate purposes, including, but not limited to, working capital and capital expenditures.
The securities described above are being offered by Microvision pursuant to registration statements on Form S-3 previously filed and declared effective by the Securities and Exchange Commission (SEC). This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in the offering. The offering may be made only by means of the prospectus supplement and the related prospectus relating to the proposed offering, copies of which may be obtained, when available, from Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 300 Madison Avenue, 4th Floor, New York, NY, 10017, by telephone at (212) 667-8563, or via email at EquityProspectus@opco.com.
Continues…
http://finance.yahoo.com/news/Microvision-Announces-Pricing-bw-160646938.html?x=0&.v=1
The market reaction to additional 7.7 million shares issued, assuming over-allotment option is exercised, to raise $21.5 million in funding has been lot more violent then the 10% dilution [from additional shares] would suggest. To the naked eye the dilution looks like 10% from additional shares. However, when you look at the offering price of $3, a discount of 27% from the closing stock price of $4.11, it makes sense why the stock would drop so much… almost approaching the $3 dollar mark.
That is the management sin of doing a secondary public offering at deep discounts, like 27%, and then pays $1.6 million in fees to secure funding. Obviously, I’m not aware of the circumstances or reasons for the kind of a deal that the management made with Investment Bankers [and brokers] involved. However, one thing is for sure, that the existing shareholders have been diluted─ more than what the management intended to do, but also the unsuspecting shareholders were left at the mercy of unscrupulous financial wizards from Openheimer, Thomas Weisel, and Craig Hallum. And by that I mean the unscrupulous ways of stock manipulation and shorting against the anticipated delivery of stock [6.7 million to 7.7 million shares] from Microvision treasury.
That’s the American Investment Banker, Venture Capitalist and a Broker at work to rip out the heart and soul of a young and promising company in exchange for maximizing their take of the loot. You guessed it! The deep discount of 27% and $1.6 million in fees was, obviously, not enough.
Is that the American way?
I guess so…just look around you and you will see who caused the systemic global financial meltdown… Lehman Brothers, Merrill Lynch…etc… etc.
I’m sure you get the picture…
“The good old boy network of financial wizards at Wall Street”
Isn’t it?
We know that given the opportunity, the Investment Bankers and Brokers would do what we suspect them to do to make an extra buck. What we don’t know, however, is how naïve and financially unsophisticated the current management at Microvision really is?
It seems like, that the MVIS stock has been manipulated by shorting [from $5.70 to $3.70 in two week period] coming into the announcement of public offering and then covering the short position [from $3.15 to $3.27] after the announcement. The only entities that can do this sort of manipulation would be the parties involved in the public offering. Assuming that Microvision management kept a lid on the details of public offering… the only other parties to the deal would be Oppenheimer, Thomas Weisel and Craig Hallum Capital.
At the close of the day, on November 19th, the MVIS closed at $3.27 [down 84 cents for over 20% down] on a trading volume that is over 7.35million shares [representing about 10% of the float].
What a mess!
Microvision management could have been much smarter in how they handled the secondary public financing of the company. It does not take a rocket scientist to sell 7.7 million shares at 27% discount and pay $1.6 million in fees to raise $21.5 million in total… assuming the option to 1 million shares over-allotment is exercised.
Looking at how 7.35 million shares traded on November 19th, the day of announcement, it is apparent that a “Stock Rights Offering” to existing shareholders could have been easily subscribed. Stock rights offering is a very common practice in London financial markets [and Asian countries] and is the most preferred mode of financing among conservative and financially savvy CFOs/CEOs.
Do a Google search on "Rights Offering" and you will find hundreds of companies doing it... right here in the US. A stock rights offering is a very basic and simple way of funding... something that the 40+ year old CFOs/CEOs find too simplistic in light of their shining MBA's and Six Sigma Black Belt certifications.
Over the last two years, all the financing that has taken place at Microvision makes you wonder about the financial savvy and financial negotiating skills of that in-charge. These are very blunt and critical words… but I say it as I see it. As an investor in MVIS stock, with hard earned money on the line, I don’t think I need to be pussy footing around the financial management savvy of the current management and worry about their fragile feelings.
So, having said all that, which sounds more like venting my frustration, where we go from here?
First, let me advise you to do your own due diligence. And if you’re due diligence tells you to hold your position in MVIS and possibly add at these discounted price level... then do so? Because that’s exactly how I feel in-spite of all that has taken place over the last two trading days.
Next, the bottom line, as I see it, and then a few words to explain why I feel that way…
“Microvision story is very compelling and it remains the opportunity of a lifetime… there is no doubt about that. Personally, I would hold my current position─ except for what I may have to sell to cover my margin calls, and then in the future add to my position when and if my finances permit me to do so.”
I am certainly disappointed in the management’s handling of this public offering… that exposed the unsuspecting retail investors to the unscrupulous ways of Wall Street wizards. I am not surprised that this offering has had such a negative impact on the MVIS stock price. When a company gives 27% discount to the Wall Street wizards, you would expect the stock price to eventually gravitate towards that offering price… $3 dollars in this case.
In my humble opinion, the long-term outlook for this company has not changed. I say “my humble opinion”, because the market action of November 19th and the resultant financial impact on portfolio valuations can make even the strongest of believers question in what they truly believe… a sure sign of humility.
In hindsight, maybe there was a better way to do the financing. Maybe there was a better way to manage the SHOWwx launch. Maybe there was a better way to announce the OEM partner names. Maybe there was a better way to announce the purchase order from the global mobile phone carrier.
That’s just too many “maybe”… but then again I'm not with the company, so I really don't know what’s causing this muted enthusiasm while giving away the store at below wholesale prices.
I don’t think that Microvision's management is inept, or trying to compromise the interests of the company or the shareholders, and I certainly don't think they have any ulterior motives. If I thought that, I would not have invested in this company for the long term and just traded for quick profits… or just sold every share and walked away. If anyone here truly thinks that's the case, I would encourage them to do the same.
Pico projection technology has a big future, and Microvision's laser PicoP display technology is the best platform for delivering applications to an enormous global market.
Additional capital was needed… there is no doubt about that. Now Microvision has that capital… at least for the next year or so.
It is disappointing to see the many thousands of dollars in portfolio value disappear in the short term. However, the long term potential and the opportunity of a lifetime stays intact.
Consider this…
• Stock prices go down as well as up─ and we had a nice ride up, from 77 cents to $5.70, and now a rough ride back down to $3.32.
• Stock prices may resume again when we hear that Osram has started shipping the green lasers in quantities, product is being sold by Mint, Uniden, Vodafone [name not yet officially disclosed], and as we start to get some more information about the embedded version of laser PicoP display engine and its applications.
• The fundamental story has not changed. Microvision has the killer app for consuming mobile content, and all signs point to that market expanding at a huge pace.
• We're not there yet, as evidenced by the continuing need to raise funds, but we're headed in the right direction as we get closer every day.
Some of us, I’m sure, are still sitting on a huge gain for the year. The extra profits that we had after the late August run-up, and before the recent drop from $4.11 to $3.32, is the value that was in the portfolio that you didn't have back in early August. When the portfolios swell in value, the gains feel great…and the losses make you anxious, but I have a lot of confidence that we haven't seen the last of the gains.
So that's my take on the current funding… and a few words of comfort from experience.
Excessive dilution, stock shorting and manipulation are all very sickening… but it's something we have to deal with and learn to understand as the ways of the Wall Street West.
You and I can criticize management for the way the public offering, to raise $21.5 million in funding, was done but none of us really knows the full story.
So, give the management the benefit of the doubt, do some due diligence, and look at the future potential of Microvision stock investment with a fresh perspective.
If you see, what I see… you should hold your current position and add to it at these low prices… if and when your finances permit you to do so.
[If some of the words look a bit familiar towards the end... then you have read Paul Anderson post on Yahoo Message Board... just like I did. Our writing style is not much different... so here is the credit to you Mr. Anderson before you get bent out of shape.]
Anant Goel
http://www.wealthbyoptions.com/
Source: Microvision, Inc.
On 9:41 am EST, Thursday November 19, 2009
REDMOND, Wash.--(BUSINESS WIRE)--Microvision, Inc. (NASDAQ: MVIS - News), a global leader in light scanning technologies, today announced the pricing of an underwritten public offering of 6.7million shares of its common stock at a price to the public of $3.00 per share. Microvision has granted the underwriters a 30-day option to purchase up to an additional 1.0million shares of its common stock to cover over-allotments, if any. Microvision expects to receive net proceeds, after deducting the underwriting discount and estimated offering expenses, of approximately $18.7million from the offering, or $21.5million if the underwriters exercise their over-allotment option in full. Oppenheimer & Co. Inc. and Thomas Weisel Partners LLC are the joint book-running managers and Craig Hallum Capital Group LLC is acting as co-manager for the offering. The offering is expected to close on November 24, 2009, subject to customary closing conditions.
Microvision intends to use the net proceeds of the offering for general corporate purposes, including, but not limited to, working capital and capital expenditures.
The securities described above are being offered by Microvision pursuant to registration statements on Form S-3 previously filed and declared effective by the Securities and Exchange Commission (SEC). This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in the offering. The offering may be made only by means of the prospectus supplement and the related prospectus relating to the proposed offering, copies of which may be obtained, when available, from Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 300 Madison Avenue, 4th Floor, New York, NY, 10017, by telephone at (212) 667-8563, or via email at EquityProspectus@opco.com.
Continues…
*****
Here’s the link to the news from this morning…http://finance.yahoo.com/news/Microvision-Announces-Pricing-bw-160646938.html?x=0&.v=1
The market reaction to additional 7.7 million shares issued, assuming over-allotment option is exercised, to raise $21.5 million in funding has been lot more violent then the 10% dilution [from additional shares] would suggest. To the naked eye the dilution looks like 10% from additional shares. However, when you look at the offering price of $3, a discount of 27% from the closing stock price of $4.11, it makes sense why the stock would drop so much… almost approaching the $3 dollar mark.
That is the management sin of doing a secondary public offering at deep discounts, like 27%, and then pays $1.6 million in fees to secure funding. Obviously, I’m not aware of the circumstances or reasons for the kind of a deal that the management made with Investment Bankers [and brokers] involved. However, one thing is for sure, that the existing shareholders have been diluted─ more than what the management intended to do, but also the unsuspecting shareholders were left at the mercy of unscrupulous financial wizards from Openheimer, Thomas Weisel, and Craig Hallum. And by that I mean the unscrupulous ways of stock manipulation and shorting against the anticipated delivery of stock [6.7 million to 7.7 million shares] from Microvision treasury.
That’s the American Investment Banker, Venture Capitalist and a Broker at work to rip out the heart and soul of a young and promising company in exchange for maximizing their take of the loot. You guessed it! The deep discount of 27% and $1.6 million in fees was, obviously, not enough.
Is that the American way?
I guess so…just look around you and you will see who caused the systemic global financial meltdown… Lehman Brothers, Merrill Lynch…etc… etc.
I’m sure you get the picture…
“The good old boy network of financial wizards at Wall Street”
Isn’t it?
We know that given the opportunity, the Investment Bankers and Brokers would do what we suspect them to do to make an extra buck. What we don’t know, however, is how naïve and financially unsophisticated the current management at Microvision really is?
It seems like, that the MVIS stock has been manipulated by shorting [from $5.70 to $3.70 in two week period] coming into the announcement of public offering and then covering the short position [from $3.15 to $3.27] after the announcement. The only entities that can do this sort of manipulation would be the parties involved in the public offering. Assuming that Microvision management kept a lid on the details of public offering… the only other parties to the deal would be Oppenheimer, Thomas Weisel and Craig Hallum Capital.
At the close of the day, on November 19th, the MVIS closed at $3.27 [down 84 cents for over 20% down] on a trading volume that is over 7.35million shares [representing about 10% of the float].
What a mess!
Microvision management could have been much smarter in how they handled the secondary public financing of the company. It does not take a rocket scientist to sell 7.7 million shares at 27% discount and pay $1.6 million in fees to raise $21.5 million in total… assuming the option to 1 million shares over-allotment is exercised.
Looking at how 7.35 million shares traded on November 19th, the day of announcement, it is apparent that a “Stock Rights Offering” to existing shareholders could have been easily subscribed. Stock rights offering is a very common practice in London financial markets [and Asian countries] and is the most preferred mode of financing among conservative and financially savvy CFOs/CEOs.
Do a Google search on "Rights Offering" and you will find hundreds of companies doing it... right here in the US. A stock rights offering is a very basic and simple way of funding... something that the 40+ year old CFOs/CEOs find too simplistic in light of their shining MBA's and Six Sigma Black Belt certifications.
Over the last two years, all the financing that has taken place at Microvision makes you wonder about the financial savvy and financial negotiating skills of that in-charge. These are very blunt and critical words… but I say it as I see it. As an investor in MVIS stock, with hard earned money on the line, I don’t think I need to be pussy footing around the financial management savvy of the current management and worry about their fragile feelings.
So, having said all that, which sounds more like venting my frustration, where we go from here?
First, let me advise you to do your own due diligence. And if you’re due diligence tells you to hold your position in MVIS and possibly add at these discounted price level... then do so? Because that’s exactly how I feel in-spite of all that has taken place over the last two trading days.
Next, the bottom line, as I see it, and then a few words to explain why I feel that way…
“Microvision story is very compelling and it remains the opportunity of a lifetime… there is no doubt about that. Personally, I would hold my current position─ except for what I may have to sell to cover my margin calls, and then in the future add to my position when and if my finances permit me to do so.”
I am certainly disappointed in the management’s handling of this public offering… that exposed the unsuspecting retail investors to the unscrupulous ways of Wall Street wizards. I am not surprised that this offering has had such a negative impact on the MVIS stock price. When a company gives 27% discount to the Wall Street wizards, you would expect the stock price to eventually gravitate towards that offering price… $3 dollars in this case.
In my humble opinion, the long-term outlook for this company has not changed. I say “my humble opinion”, because the market action of November 19th and the resultant financial impact on portfolio valuations can make even the strongest of believers question in what they truly believe… a sure sign of humility.
In hindsight, maybe there was a better way to do the financing. Maybe there was a better way to manage the SHOWwx launch. Maybe there was a better way to announce the OEM partner names. Maybe there was a better way to announce the purchase order from the global mobile phone carrier.
That’s just too many “maybe”… but then again I'm not with the company, so I really don't know what’s causing this muted enthusiasm while giving away the store at below wholesale prices.
I don’t think that Microvision's management is inept, or trying to compromise the interests of the company or the shareholders, and I certainly don't think they have any ulterior motives. If I thought that, I would not have invested in this company for the long term and just traded for quick profits… or just sold every share and walked away. If anyone here truly thinks that's the case, I would encourage them to do the same.
Pico projection technology has a big future, and Microvision's laser PicoP display technology is the best platform for delivering applications to an enormous global market.
Additional capital was needed… there is no doubt about that. Now Microvision has that capital… at least for the next year or so.
It is disappointing to see the many thousands of dollars in portfolio value disappear in the short term. However, the long term potential and the opportunity of a lifetime stays intact.
Consider this…
• Stock prices go down as well as up─ and we had a nice ride up, from 77 cents to $5.70, and now a rough ride back down to $3.32.
• Stock prices may resume again when we hear that Osram has started shipping the green lasers in quantities, product is being sold by Mint, Uniden, Vodafone [name not yet officially disclosed], and as we start to get some more information about the embedded version of laser PicoP display engine and its applications.
• The fundamental story has not changed. Microvision has the killer app for consuming mobile content, and all signs point to that market expanding at a huge pace.
• We're not there yet, as evidenced by the continuing need to raise funds, but we're headed in the right direction as we get closer every day.
Some of us, I’m sure, are still sitting on a huge gain for the year. The extra profits that we had after the late August run-up, and before the recent drop from $4.11 to $3.32, is the value that was in the portfolio that you didn't have back in early August. When the portfolios swell in value, the gains feel great…and the losses make you anxious, but I have a lot of confidence that we haven't seen the last of the gains.
So that's my take on the current funding… and a few words of comfort from experience.
Excessive dilution, stock shorting and manipulation are all very sickening… but it's something we have to deal with and learn to understand as the ways of the Wall Street West.
You and I can criticize management for the way the public offering, to raise $21.5 million in funding, was done but none of us really knows the full story.
So, give the management the benefit of the doubt, do some due diligence, and look at the future potential of Microvision stock investment with a fresh perspective.
If you see, what I see… you should hold your current position and add to it at these low prices… if and when your finances permit you to do so.
[If some of the words look a bit familiar towards the end... then you have read Paul Anderson post on Yahoo Message Board... just like I did. Our writing style is not much different... so here is the credit to you Mr. Anderson before you get bent out of shape.]
Anant Goel
http://www.wealthbyoptions.com/
Tuesday, October 27, 2009
Microvision: 3rd Qtr 2009 Earnings Conference Call – Part 1
The 3rd Quarter earnings were reported after the market close and the conference call took place right after that on October 22nd, 2009.
First, let’s look at the earnings report in Part 1 of this post…
Microvision Reports Third Quarter 2009 Results
Source: Microvision, Inc.
On 4:01 pm EDT, Thursday October 22, 2009
Operating Results
“The third quarter of 2009 was a very rewarding and in many ways historical quarter for Microvision as we reached three important corporate milestones for commercialization of our PicoP® technology” said Alexander Tokman, Microvision’s President and CEO. “We launched our first PicoP technology based product, SHOWWXTM the world’s first laser pico projector; received our first purchase order to distribute the SHOWWX; and secured our first global OEM to private label the accessory product. We began shipping SHOWWX laser pico projectors in September and our plan is to increase volume each month to meet customer demand.”
http://finance.yahoo.com/news/Microvision-Reports-Third-bw-1249636338.html?x=0&.v=1
Next, let’s review the earnings report for “Operating Results” and then we’ll focus on the “Financial Results” later…
• The Asia-Pacific region global consumer electronics OEM was indeed Uniden of Japan, through the efforts of regional distributor Mint Technology, and that Microvision received a purchase order from Uniden to private label the PicoP display engine-based accessory laser pico projector. Read more: http://www.uniden.com.au/australia/oc_our_company.asp
Obviously, Microvision investors didn’t like the names in the news and the stock price plunged to $4.66 early in the morning to make the low of the day [from $5.28] and closed the day at $5.07. Then at the conference call, after the market close, Alex Tokman, CEO of Microvision, decidedly tried to dodge the questions regarding green laser supply from Corning. I don’t think the investors liked the [wishy-washy] answers on green laser supply issue either. And that, in my opinion, set the stage for further decline in MVIS stock price that came about the next day on Friday… when the stock went down further and closed the day at $4.39.
-- Estimated Development Contracts Backlog: $820,000
-- Estimated ROV Scanner Backlog: $100,000
-- SHOWwx Projectors Backlog: $0 … Purchase Orders from Asia-Pacific Region came-in on October 8th, 2009.
-- Net Product Backlog [net of ROV Scanners]: $1,080,000 [2,000,000 - 820,000 – 100,000 = 1,080,000]
-- PicoP Evaluation Kit [PEK] Sold at: $5,000 each
-- Number of PEKs Sold on Backorder: 216 … give or take a few
• “The company reported an operating loss for the nine months ended September 30, 2009 of $27.9 million compared to $25.3 million for the same period in 2008 and $9.3 million, for the quarter ended September 30, 2009 compared to $9.0 million for the same period in 2008.”
First, let’s look at the earnings report in Part 1 of this post…
Microvision Reports Third Quarter 2009 Results
Commercial Product Launch and Beginning of Shipments of SHOWWX, World’s First Laser Pico Projector, Highlight Quarter
Press Release Source: Microvision, Inc.
On 4:01 pm EDT, Thursday October 22, 2009
REDMOND, Wash.--(BUSINESS WIRE)--Microvision, Inc. (NASDAQ:MVIS - News), a global leader in innovative ultra-miniature projection display and image capture products for mobility applications, today reported operating and financial results for the third quarter of 2009.
Operating Results
“The third quarter of 2009 was a very rewarding and in many ways historical quarter for Microvision as we reached three important corporate milestones for commercialization of our PicoP® technology” said Alexander Tokman, Microvision’s President and CEO. “We launched our first PicoP technology based product, SHOWWXTM the world’s first laser pico projector; received our first purchase order to distribute the SHOWWX; and secured our first global OEM to private label the accessory product. We began shipping SHOWWX laser pico projectors in September and our plan is to increase volume each month to meet customer demand.”
Microvision’s Asian distribution partner, Mint Technology, through its parent company Mint Wireless Limited (ASX: MNW - News), issued a press release on October 22 (see Mint press release) revealing that the global OEM that will private label Microvision’s laser pico projector is Uniden Corporation of Japan. Microvision had previously announced on a no-name basis the purchase order from Mint Technology (see September 30 Microvision press release) and the purchase order for Uniden to private label Microvision’s PicoP display engine-based accessory laser pico projector (see October 8 Microvision press release).
Other notable results and acknowledgements for the third quarter included:
• Certifying the SHOWWX Laser Pico Projector as a Made for iPod® product
• Signing a long-term agreement with OSRAM Opto Semiconductors GmbH for supply of green and blue lasers to further strengthen supply chain capabilities.
• Receiving $1.0 million subcontract award from Lockheed Martin to support DARPA’s Urban Leader Tactical Response, Awareness & Visualization (ULTRA-Vis) program, an advanced technology development initiative to build a soldier worn system. This contract is important to Microvision’s long-term strategic roadmap, as it provides the opportunity to advance the company’s technology for a variety of military and commercial full-color eyewear applications. Under the subcontract Microvision is developing a daylight-readable, see-through, low-profile, ergonomic eyewear display based on its ultra-miniature PicoP display engine and proprietary thin, clear Substrate Guided Relay (SGR) Optics.
• Identified for the first time by the Patent Board™ as one of the "Top 50 Movers” in the Electronics and Instruments industry. The Patent Board is a leading business-based patent advisor to Fortune 500 companies, emerging technology companies, law firms, investment banks, governments and universities. The Patent Board utilizes proprietary data, tools, analytics and technology to leverage patent-based Intellectual Property as an asset class.
• Identified by a Pacific Northwest business publication as one of “Washington’s Top 100 Companies to Work For in 2009”
Financial Results
For the nine months ended September 30, 2009, the company reported revenue of $2.9 million compared to $5.1 million for the same period in 2008 and for the three months ended September 30, 2009, the company reported revenue of $ 924,000 compared to $894,000 for the same period 2008. As of September 30, 2009, the backlog totaled $2.0 million compared to $647,000 at September 30, 2008. The decrease in revenue is primarily attributed to lower backlog at the beginning of 2009, which is a result of the company's strategy to focus most of its resources on commercializing PicoP products.Continued…
Here’s the link to the full report…http://finance.yahoo.com/news/Microvision-Reports-Third-bw-1249636338.html?x=0&.v=1
Next, let’s review the earnings report for “Operating Results” and then we’ll focus on the “Financial Results” later…
Review: Operating Results
Microvision reached three [actually four] corporate milestones for commercialization of its PicoP display technology…• Launched the first PicoP display technology based product SHOWwx, the world’s first laser PicoP projector.
• Received the first purchase order to distribute the SHOWwx from Mint Wireless…for distribution into the Asia-Pacific region.
• Secured the first global consumer electronics OEM [Uniden] to private label the accessory product SHOWwx... for OEM sales and marketing into the Asia-Pacific region.
• Began shipping SHOWwx laser PicoP projectors in September and plans to increase volume each month to meet customer demand.
We are truly at the turning point in the history of Microvision, that some may call the “validation” phase. Because, that’s what the commercial release and the two purchase orders from global consumer electronic OEMs represent as …
• Validation of Microvision’s laser based PicoP display technology, its quality, its reliability, and a viable commercial fabrication & production milestone.”
• Validation of performance and quality of PicoP display engine at the core of the world’s first laser based PicoP projector SHOWwx.
• Validation of Corning's green laser technology, its reliability, and a viable commercial fabrication & production milestone.
• Validation of technical and performance superiority of laser based PicoP projector as compared to other two technologies on the market… DLP from Texas Instruments and LcoS for 3M.
• Validation of consumer preference for Microvision’s PicoP projector: wide screen, high definition, longer battery life, 2D video with fast refresh without motion blur, small physical size and always in focus images for all of video [static, streaming, and broadcast] communications.
• Validation of acceptable safety standard for laser based PicoP projectors in consumer use and adoption.
• Validation of speckle as a non-issue and as virtually non-existent with Microvision’s laser based PicoP display engine.
• Validation of fundamental design flaws of Microvision competitors: low resolution images, faded colors, short battery runs, longer throw distance, and requiring constant manual focus adjustments.
• Validation of Microvision as a product company rather than just a R&D house with 115 issued patents and with many more on file.
There is no need to create the wheel again, so here’s the link to my post on “validation” and the unfolding financial opportunity of a lifetime…
http://mirro7.blogspot.com/2009/10/microvision-opportunity-of-lifetime-in_8814.htmlMicrovision’s press release also confirmed the early morning news from Reuters that…
• The Asian-Pacific region distribution partner was indeed Mint Technology, through its parent company Mint Wireless Limited, and that Microvision received a purchase order from Mint Technology. Read more: http://www.mint-trading.com/default.asp
• The Asia-Pacific region global consumer electronics OEM was indeed Uniden of Japan, through the efforts of regional distributor Mint Technology, and that Microvision received a purchase order from Uniden to private label the PicoP display engine-based accessory laser pico projector. Read more: http://www.uniden.com.au/australia/oc_our_company.asp
Obviously, Microvision investors didn’t like the names in the news and the stock price plunged to $4.66 early in the morning to make the low of the day [from $5.28] and closed the day at $5.07. Then at the conference call, after the market close, Alex Tokman, CEO of Microvision, decidedly tried to dodge the questions regarding green laser supply from Corning. I don’t think the investors liked the [wishy-washy] answers on green laser supply issue either. And that, in my opinion, set the stage for further decline in MVIS stock price that came about the next day on Friday… when the stock went down further and closed the day at $4.39.
The stock price action before and after the conference call [CC] is not surprising when you consider…
• Many MVIS investors were expecting global consumer electronics firms like Sony or LG Electronics as the OEM partner of Microvision that was announced on October 8th, 2009… without naming any names at the time. Many of us and that include me, speculated on the OEM partner’s name and wrote pages to arrive at the conclusion that it could be either Sony or LG Electronics. When we finally heard the name “Uniden Corporation”, we were disappointed… because most of us are not familiar with Uniden as a household name in the US.
• Also the undisclosed name, of the Asian distributor [from October 8th press release], was finally disclosed as “Mint Technology” at the same time the OEM’s name "Uniden" became a public knowledge. Again, some of us were disappointed because we were expecting some big name global distributor… and not some company called “Mint” from Asia.
Considering the above, a first blush knee jerk action best describes the investor response to the news… about Mint Technology and Uniden Corporation… and lack of clearly understanding the comments made by Alex Tokman, on green laser supplies for 2009 and 2010.
In my humble opinion, the investor selling on the news is reactionary; essentially prompted by lack of information about the two big name companies from the Asia-Pacific region. Let’s first talk about Mint Wireless and Uniden, and then we will discuss the CEO comments on green laser supply issue. The price of MVIS stock will take care of itself when we are better informed and had some time to digest information.
Here’s the link to my post on this very topic…
http://mirro7.blogspot.com/2009/10/microvision-asia-pacific-region.htmlNow let’s talk about “Other notable results and acknowledgements for the third quarter”… as stated in the press release…
• “Certifying the SHOWwx Laser Pico Projector as a Made for iPod® product”
What Alex Tokman said at the CC later in the evening, says it all…
“Many of you who don't know, our pico projector is a very simple plug and play device for people on the go who want to spontaneously view and share multimedia applications and programs such as mobile television, movies, photos, user generated content. Users can seamlessly plug the projector into their iPod devices, portable media players, and other mobile devices. Which brings me to our next topic, not every product can have “Made for iPod” logo on it. This logo indicates that our projector has specifically designed to work with iPod products. Microvision has gone through five steps process and certified that SHOWwx has been made in accordance with the high standards of quality and performance. Why is this important? According to media sources, there are more than 220 million iPods sold to-date. The preliminary feedback we have received from prospective users has been very positive. They recognize the value of the unique competitive advantages of the PicoP tech including the thin form factor high resolution infinite focus and long battery life. As an example, very recently we have completed our participation in a trade show in Japan called CEATEC where multiple companies have showcased their new projectors. Engadget reports has provided some of the coverage of what they've seen at the show. And I'm going to read you a quote from one of their take-away.
"We stopped at Microvision booth at CEATEC in order to take a look at what makes the world's first laser based pico projector so special and we can honestly say that the picture was pretty stunning."
Here’s the link engadget report…
http://www.engadget.com/2009/10/06/video-microvisions-laser-based-show-wx-pico-projector-shines-a/Now consider the value of this marketing strategy in the short term, while the supply is constrained…
Microvision is targeting their laser PicoP projector SHOWwx into a 220 million unit strong iPod market with a certification “Made for iPod” product family [that includes iPhones]. Selling directly, or thru a distributor is lot better margin wise than it would be if Apple were to private label it under its own Apple logo.
Some day, when the supply is not constrained and millions of PicoP display engines can be mass produced to attract Apple, we may see Apple as the next global consumer electronic OEM for the American region… with a global reach
• “Signing a long-term agreement with OSRAM Opto Semiconductors GmbH for supply of green and blue lasers to further strengthen supply chain capabilities.”
Osram is coming on board with more production quantities of green laser becoming available in the fourth quarter 2009. Hopefully, that will ease-up some green laser supply issues facing Microvision at the present time. Osram green laser are better, cheaper to make and have better yields due to their simpler design as compared to Corning. Microvision has signed a multi-year supply agreement with Osram... which essentially guarantees all of Osram production of green laser going into the production of PicoP display engines.
The availability and quality of green lasers will be crucial not only to the viability of Microvision’s PicoP display technology… but also to its financial success as a growth company. In 2010, there will be six companies making green lasers for the Pico projector market. The most recent news about Japan’s QD lasers only reinforces my belief that Microvision will be a huge financial success.
Here’s the link to QD laser news…
http://www.pcworld.com/article/173455/green_laser_developed_for_microprojectors.html• “Receiving $1.0 million subcontract award from Lockheed Martin to support DARPA’s Urban Leader Tactical Response, Awareness & Visualization (ULTRA-Vis) program, an advanced technology development initiative to build a soldier worn system. This contract is important to Microvision’s long-term strategic roadmap, as it provides the opportunity to advance the company’s technology for a variety of military and commercial full-color eyewear applications. Under the subcontract Microvision is developing a daylight-readable, see-through, low-profile, ergonomic eyewear display based on its ultra-miniature PicoP display engine and proprietary thin, clear Substrate Guided Relay (SGR) Optics.”
Contract like this not only provide current revenue, but also help fund future R&D effort to enhance, for one example, the resolution and brightness of PicoP display engine for next generation projectors.
• “Identified for the first time by the Patent Board™ as one of the "Top 50 Movers” in the Electronics and Instruments industry. The Patent Board is a leading business-based patent advisor to Fortune 500 companies, emerging technology companies, law firms, investment banks, governments and universities. The Patent Board utilizes proprietary data, tools, analytics and technology to leverage patent-based Intellectual Property as an asset class.”
Microvision is positioning itself thru patents and IP to be a major player in the image community. He (Alex) said: “Microvision is not going to be a small component provider that can be marginalized by bigger players.”
Alex sees Microvision as an INTEL type company. He is going to make the company a major player in the image industry. That may very well explain the “Image by PicoP” as the slogan chosen for the world’s first laser based PicoP projector SHOWwx.
Again, no need to create the wheel. Please read my three part post on the subject…
http://mirro7.blogspot.com/2009/10/microvision-protect-your-intellectual.html• “Identified by a Pacific Northwest business publication as one of “Washington’s Top 100 Companies to Work For in 2009”
Well, that’s good to know. It’s always a good sign when the company is able to hire and retain key employees during its growth phase… like Microvision is at this stage of commercial product launch.
Now let’s look at the “Financial Results”…
Review: Financial Results
“… and for the three months ended September 30, 2009, the company reported revenue of $ 924,000 compared to $894,000 for the same period 2008.”“…, the backlog totaled $2.0 million compared to $647,000 at September 30, 2008. The decrease in revenue is primarily attributed to lower backlog at the beginning of 2009,”
Digging into the earnings report for 2nd Qtr and 3rd Qtr 2009, in simple terms, it means…
• Microvision sold lot less ROV scanners and a very few, if any, PEKs in the 3rd Qtr 2009. And obviously, there were no sales of SHOWwx in the 3rd Qtr 2009… because POs did not show-up until October 8th, 2009.
• In 2nd Qtr 2009, the product sales were $174,000 and cost of product revenue was $543,000. In 3rd Qtr 2009, the product sales were $107,000 and cost of product revenue was $720,000. How do you reconcile the loss? Well, I can guess, by looking at the product & development contracts backlog of approximately $2,000,000.
Here’s the analysis and the way I arrived at the numbers…
-- Total 3rd Qtr Backlog: $2,000,000-- Estimated Development Contracts Backlog: $820,000
-- Estimated ROV Scanner Backlog: $100,000
-- SHOWwx Projectors Backlog: $0 … Purchase Orders from Asia-Pacific Region came-in on October 8th, 2009.
-- Net Product Backlog [net of ROV Scanners]: $1,080,000 [2,000,000 - 820,000 – 100,000 = 1,080,000]
-- PicoP Evaluation Kit [PEK] Sold at: $5,000 each
-- Number of PEKs Sold on Backorder: 216 … give or take a few
• “The company reported an operating loss for the nine months ended September 30, 2009 of $27.9 million compared to $25.3 million for the same period in 2008 and $9.3 million, for the quarter ended September 30, 2009 compared to $9.0 million for the same period in 2008.”
Looks like, the operating loss for the 3rd Qtr was $300,000 more as compared to the 2nd Qtr. That’s reasonable considering the commercial product launch.
• “The company reported a net loss of $30.8 million, or $0.43 per share, for the nine months ended September 30, 2009 compared to $22.7 million, or $0.38 per share for the same period in 2008 and $11.5 million, or $0.15 per share, for the quarter ended September 30, 2009 compared to $8.4 million, or $0.13 per share for the quarter ended September 30, 2008. The net loss for the three and nine months ended September 30, 2009 included a non cash loss on derivative instruments of $2.2 million and $3.0 million, respectively, compared to a gain of $585,000 and $2.0 million for the same periods in 2008. The loss on derivative instruments is due to the change in the value of the warrants to purchase the company’s common stock that were issued in connection with the company’s financing transactions.”
The net loss for the 3rd Qtr was $11.5 million as compared to $8.4 million for the 2nd Qtr. The net loss figure takes the “operating loss” of $9.3 million for the 3rd Qtr and adds [or subtracts] the gain [or loss] on derivative instruments [like options & warrants]. It’s not a real dollars loss until the derivative instrument is exercised. Consider this additional loss of $2.2 million as the “net” value of options or warrants owned [or issued] by the company. In 3rd Qtr, Microvision issued warrants to institutional investors and those warrants went up in value as the MVIS stock went up in value during that period.
• “Net cash used in operating activities was $23.4 million for the nine months ended September 30, 2009 compared to $22.3 million for the same period in 2008. Net cash used in operating activities was $7.1 million for the quarter ended September 30, 2009 compared to $7.6 million for the second quarter of 2009. The reduction in the quarterly cash burn was primarily a result of cost reduction efforts the company implemented in the first quarter of 2009. The net cash burn for the third quarter was partially offset by the receipt of $1.5 million for the exercise of investor warrants, and $300,000 for other investing and financing activities resulting in a net cash usage of $5.9 million for the third quarter of 2009. The company ended the quarter with $20.5 million in cash, cash equivalents, and investment securities.”
Here, two important things are worth noting…
- The net cash burn for the 3rd Qtr was $7.1 million and was $0.5 million less than the 2nd Qtr. However, the net cash usage in the 3rd Qtr was $5.9 million… as a result of cash received from warrants exercised and other investing and financing activities.
- At the end of 3rd Qtr, Microvision had $20.5 million in cash, cash equivalents, and investment securities.
Stay tuned for Part 2… where we will discuss the Earnings Conference Call and see where that takes us in this journey to “Image by PicoP” ubiquity.
Anant Goel
http://www.wealthbyoptions.com/Saturday, October 24, 2009
Microvision: Asia-Pacific Region Distributor and OEM Partner
Microvision announced its 3rd Qtr earnings conference call a few days ago, and it was scheduled for Thursday, October 22nd… after the market close.
However, early in the morning of October 22nd, Reuters issued the following news item…
Mint Wireless Limited Signs Distribution Agreement With Microvision Inc.; Receives Initial Order From Uniden Corporation
Thursday, 22 Oct 2009 03:40am EDT
“Mint Wireless Limited announced the signing of an exclusive distribution agreement with Microvision Inc. (Microvision) to distribute a PicoP display engine enabled accessory pocket projector to select Asia Pacific countries. This agreement follows Mint Wireless Limited’s recently announced strategic partnership and supply agreement with Uniden Corporation (Uniden), where Mint Wireless Limited is the exclusive supply partner for a select range of technology products to Uniden’s Australian and New Zealand markets. Mint Wireless Limited has received an initial purchase order from Uniden for an OEM version of Microvision’s pocket projector and will manage the supply, marketing and distribution of the Uniden OEM pocket projector for the Australian and New Zealand markets.
http://www.reuters.com/finance/stocks/keyDevelopments?rpc=66&symbol=MVIS.O×tamp=20091022074000
Immediately after the Reuter news, Matt Nichols had the following post at Microvision’s blog The Displayland…
Mint Wireless And Uniden Start The Ball Rolling
“As our launch partners begin their own marketing programs we stated previously that they would initiate their own communications announcements to reveal their name. The first announcement from a partner just showed up on the Australian Stock Exchange newswire at 6:39 p.m., Sydney time, October 22.
Microvision’s Asian distribution partner, Mint Technology, through its parent company Mint Wireless Limited (ASX: MNW), issued the following press release revealing that the global OEM that will private label Microvision’s laser pico projector is Uniden Corporation of Japan.”
Continued…
Here’s the link to the full post…
http://www.microvision.com/displayground/?p=1198
So there you have it... the names of Asia-Pacific region distributor and the global consumer electronics OEM... for Microvision's laser PicoP projector SHOWwx.
Microvision’s Asia-Pacific region distributor is Mint Wireless and the global consumer electronics OEM is Uniden Corporation.
Obviously the Microvision investors didn’t like the names in the news and the stock price plunged to $4.66 early in the morning to make the low of the day [from $5.28] and closed the day at $5.07. Then at the conference call, after the market close, Alex Tokman, CEO of Microvision, decidedly tried to dodge the questions regarding green laser supply from Corning. I don’t think the investors liked the [wishy-washy] answers to green laser supply issue either. And that, in my opinion, set the stage for further decline in MVIS stock price that came about the next day on Friday… when the stock went down further and closed the day at $4.39.
The stock price action before and after the conference call [CC] is not surprising when you consider…
• Many MVIS investors were expecting global consumer electronics firms like Sony or LG Electronics as the OEM partner of Microvision that was announced on October 8th, 2009… without naming any names at the time. Many of us and that include me, speculated on the OEM partner’s name and wrote pages to arrive at the conclusion that it could be either Sony or LG Electronics. When we finally heard the name “Uniden Corporation”, we were disappointed… because most of us are not familiar with Uniden as a household name in the US.
• Also the undisclosed name, of the Asian distributor [from October 8th press release], was finally disclosed as “Mint Wireless” at the same time the OEM’s name "Uniden" became a public knowledge. Again, some of us were disappointed because we were expecting some big name global distributor… and not some company named “Mint” from Asia.
• At the conference call, several times the same question about “quantities of green laser” supply from Corning was asked and Alex Tokman answered it in the same vague manner [more or less]… its hard to say and that he wasn’t sure. We all know how important the green laser supply quantities are to the successful launch of Microvision’s first laser PicoP projector SHOWwx. So, it is not surprising that each and every individual participating in the Q&A session asked the same question [in different ways]… about the quantities of green lasers that would be available to Microvision in 2009 and 2010.
Here’s the link to the transcript of 3rd Qtr conference call…
http://www.mvisbuzz.com/2009/10/conference-call-notes.html
• At one point during the Q&A session, the Analyst from Morgan Stanley took a dig at Alex Tokman when he said: “At some point you're going to have to give the analyst community something to feed on and do their reports. I'm looking forward to that day.”
• For a few years now, I've been watching the investor anticipation and high hopes leading into quarterly conference calls only to feel let down after each event. It looks like that the analysts have also caught on and don't much partake in Q&A sessions anymore…as they don’t seem to get what they are looking for information on supply quantities of green lasers at this stage of product launch and Microvision's sales channel growth.
Considering the above, a first blush knee jerk action best describes the investor response to the news… about Mint Wireless and Uniden… and lack clear understanding of comments made by Alex Tokman, on green laser supplies for 2009 and 2010.
In my humble opinion, the investor selling on the news is reactionary; because of lack of information about the two big name companies from the Asia-Pacific region. Let’s first talk about Mint Wireless and Uniden, and then we will discuss the lack of understanding the comments on green laser supply issue. The price of MVIS stock will take care of itself when we are better informed and had some time to digest the information.
Here we go…
• Microvision has clearly stated their distribution strategy as…
“The Company plans to distribute its accessory pico projector product through three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store. Microvision has signed several marketing and distribution agreements with international distributors in Asia and Europe to launch Microvision branded and private labeled versions of the laser pico projector. Microvision expects to begin product shipments in the next several weeks.”
Here’s the link to the press release…
http://finance.yahoo.com/news/Microvision-Announces-bw-2654236991.html?x=0&.v=1
• First, note the statement…
“… three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store.”
That clearly means, we should see several OEM partners worldwide branding Microvision products… a white label sale where the OEM puts their Logo and does its own marketing, sales, and support. The first market that Microvision has opened is the Asia-Pacific region. And the first OEM in the Asia-Pacific region is Uniden Corporation for example. Uniden is a global consumer electronics OEM with over $40 billion in sales and is a household name in the Asia-Pacific region. Not only that, Uniden has extensive reach and depth in other global markets like Europe and the Americas… including the US. But their engagement in this specific instance, is for the Asia-Pacific region... and they came to the table through Mint Wireless as the Asian distributor/sales agent.
Consider this...
I bought my Uniden cordless phone system, here in the US, in 2007 from Costco... after having done some research looking for best of the breed. In the Asia-Pacific region, my friends and family tell me that Uniden is a very well known and respected brand name. Microvision has done well teaming-up with Uniden as its first global consumer electronics OEM. Granted, they are not Sony or LG Electronics... but that may happen soon after when green laser supply picture changes.
Here’s more information on Uniden and some well known competition…
Uniden Corporation
http://wrightreports.ecnext.com/coms2/re...
Motorola, Inc.
http://wrightreports.ecnext.com/comsite5...
Nokia Corporation
http://wrightreports.ecnext.com/comsite5...
For those who may not know, Uniden is a pioneer of many electronic gadgets brought to the market…
• Now look at the statement again…
“… three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store.”
That clearly means we should see several international distributors worldwide selling branded products with Microvision Logo and the distributor doing the marketing, sales, and support. The first market that Microvision has opened for its branded product is the Asia-Pacific region. And the first distributor in the Asia-Pacific region is Mint Wireless for example. Mint Wireless is a well know distributor of consumer electronics products in the Asia-Pacific region.
Here’s information on Mint Wireless and also the distribution agreement with Microvision…
“Mint Wireless Limited (http://www.mnw.com.au/) is an ASX listed technology company focused on providing mobile payment solutions (http://www.mint-wireless.com/) and the development and management of consumer technology products and services. Mint is a developer and leading distributor of innovative consumer technology products to many of Australia and New Zealand’s largest retailers and online e-tailers.”
Here’s the link to the agreement with Microvision…
http://www.mnw.com.au/images/ASX%20Announcement/20091022_Mint_signsexclusivedistribution_agreementwithMicrovisionandreceivesinitialorderfromUnidenFINAL.pdf
Mint Wireless is not really a distributor in the way we think here in the US. In the context of their relationship with Microvision, they may act like a sales agency [very common practice in the Asia-Pacific region] working off a small percentage commission like 3% to 5%.
Their mission is more like helping Microvision [as an agency] open the doors to OEMs and help book sales. One such door they have opened for Microvision is Uniden. Mint Wireless also buys product for its own account and certainly does issue a PO in its own name. If you look at their size [in terms of revenues] they are only $12 million dollars from the Australia/New Zealand region. However, with Uniden contract in hand and working as agents for Microvision, they hope to bring-in high margin revenue with little cost exposure.
• Now let’s move on to the next part of the statement…
“Microvision has signed several marketing and distribution agreements with international distributors in Asia and Europe to launch Microvision branded and private labeled versions of the laser pico projector.”
This clearly tells me, without a doubt, that there will be more regions in the world, like Europe and the Americas, which will be opened in the near future. I expect to hear, on a monthly basis, the names of more global consumer electronics OEMs for white labeled products and regional distributors for Microvision's branded products.
• Now back to the first part of the statement one more time…
“The Company plans to distribute its accessory pico projector product through three sales channels: … and Microvision direct sales through its on-line store.”
That tells me, we should soon see an on-line Microvision store selling Microvision brand laser PicoP projectors… including the SHOWwx and its derivatives.
I hope that helps, to clarify the way business is being done and who the household name players are in the Asia-Pacific region.
Not only that, I hope this post has helped you clear-up the marketing and distribution strategy that has been adopted by Microvision for its stand alone accessory PicoP projector SHOWwx.
Stay tuned for Part 2 to this post… which would cover the green laser supply issue as part of the post titled: Microvision: 3rd Qtr Earnings Conference Call – October 22nd, 2009.
The journey to “Image by PicoP” ubiquity has just begun… and we are on the roll.
As Matt Nichols from Microvision said…
“Mint Wireless and Uniden Start the Ball Rolling”
It’s a roll… meaning a little push is all it takes to continue gathering momentum.
Be part of this momentous journey and not just watch the caravan pass you by.
Anant Goel
http://www.wealthbyoptions.com/
However, early in the morning of October 22nd, Reuters issued the following news item…
Mint Wireless Limited Signs Distribution Agreement With Microvision Inc.; Receives Initial Order From Uniden Corporation
Thursday, 22 Oct 2009 03:40am EDT
“Mint Wireless Limited announced the signing of an exclusive distribution agreement with Microvision Inc. (Microvision) to distribute a PicoP display engine enabled accessory pocket projector to select Asia Pacific countries. This agreement follows Mint Wireless Limited’s recently announced strategic partnership and supply agreement with Uniden Corporation (Uniden), where Mint Wireless Limited is the exclusive supply partner for a select range of technology products to Uniden’s Australian and New Zealand markets. Mint Wireless Limited has received an initial purchase order from Uniden for an OEM version of Microvision’s pocket projector and will manage the supply, marketing and distribution of the Uniden OEM pocket projector for the Australian and New Zealand markets.
*****
Here’s the link to this news…http://www.reuters.com/finance/stocks/keyDevelopments?rpc=66&symbol=MVIS.O×tamp=20091022074000
Immediately after the Reuter news, Matt Nichols had the following post at Microvision’s blog The Displayland…
Mint Wireless And Uniden Start The Ball Rolling
“As our launch partners begin their own marketing programs we stated previously that they would initiate their own communications announcements to reveal their name. The first announcement from a partner just showed up on the Australian Stock Exchange newswire at 6:39 p.m., Sydney time, October 22.
Microvision’s Asian distribution partner, Mint Technology, through its parent company Mint Wireless Limited (ASX: MNW), issued the following press release revealing that the global OEM that will private label Microvision’s laser pico projector is Uniden Corporation of Japan.”
Continued…
Here’s the link to the full post…
http://www.microvision.com/displayground/?p=1198
So there you have it... the names of Asia-Pacific region distributor and the global consumer electronics OEM... for Microvision's laser PicoP projector SHOWwx.
Microvision’s Asia-Pacific region distributor is Mint Wireless and the global consumer electronics OEM is Uniden Corporation.
Obviously the Microvision investors didn’t like the names in the news and the stock price plunged to $4.66 early in the morning to make the low of the day [from $5.28] and closed the day at $5.07. Then at the conference call, after the market close, Alex Tokman, CEO of Microvision, decidedly tried to dodge the questions regarding green laser supply from Corning. I don’t think the investors liked the [wishy-washy] answers to green laser supply issue either. And that, in my opinion, set the stage for further decline in MVIS stock price that came about the next day on Friday… when the stock went down further and closed the day at $4.39.
The stock price action before and after the conference call [CC] is not surprising when you consider…
• Many MVIS investors were expecting global consumer electronics firms like Sony or LG Electronics as the OEM partner of Microvision that was announced on October 8th, 2009… without naming any names at the time. Many of us and that include me, speculated on the OEM partner’s name and wrote pages to arrive at the conclusion that it could be either Sony or LG Electronics. When we finally heard the name “Uniden Corporation”, we were disappointed… because most of us are not familiar with Uniden as a household name in the US.
• Also the undisclosed name, of the Asian distributor [from October 8th press release], was finally disclosed as “Mint Wireless” at the same time the OEM’s name "Uniden" became a public knowledge. Again, some of us were disappointed because we were expecting some big name global distributor… and not some company named “Mint” from Asia.
• At the conference call, several times the same question about “quantities of green laser” supply from Corning was asked and Alex Tokman answered it in the same vague manner [more or less]… its hard to say and that he wasn’t sure. We all know how important the green laser supply quantities are to the successful launch of Microvision’s first laser PicoP projector SHOWwx. So, it is not surprising that each and every individual participating in the Q&A session asked the same question [in different ways]… about the quantities of green lasers that would be available to Microvision in 2009 and 2010.
Here’s the link to the transcript of 3rd Qtr conference call…
http://www.mvisbuzz.com/2009/10/conference-call-notes.html
• At one point during the Q&A session, the Analyst from Morgan Stanley took a dig at Alex Tokman when he said: “At some point you're going to have to give the analyst community something to feed on and do their reports. I'm looking forward to that day.”
• For a few years now, I've been watching the investor anticipation and high hopes leading into quarterly conference calls only to feel let down after each event. It looks like that the analysts have also caught on and don't much partake in Q&A sessions anymore…as they don’t seem to get what they are looking for information on supply quantities of green lasers at this stage of product launch and Microvision's sales channel growth.
Considering the above, a first blush knee jerk action best describes the investor response to the news… about Mint Wireless and Uniden… and lack clear understanding of comments made by Alex Tokman, on green laser supplies for 2009 and 2010.
In my humble opinion, the investor selling on the news is reactionary; because of lack of information about the two big name companies from the Asia-Pacific region. Let’s first talk about Mint Wireless and Uniden, and then we will discuss the lack of understanding the comments on green laser supply issue. The price of MVIS stock will take care of itself when we are better informed and had some time to digest the information.
Here we go…
• Microvision has clearly stated their distribution strategy as…
“The Company plans to distribute its accessory pico projector product through three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store. Microvision has signed several marketing and distribution agreements with international distributors in Asia and Europe to launch Microvision branded and private labeled versions of the laser pico projector. Microvision expects to begin product shipments in the next several weeks.”
Here’s the link to the press release…
http://finance.yahoo.com/news/Microvision-Announces-bw-2654236991.html?x=0&.v=1
• First, note the statement…
“… three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store.”
That clearly means, we should see several OEM partners worldwide branding Microvision products… a white label sale where the OEM puts their Logo and does its own marketing, sales, and support. The first market that Microvision has opened is the Asia-Pacific region. And the first OEM in the Asia-Pacific region is Uniden Corporation for example. Uniden is a global consumer electronics OEM with over $40 billion in sales and is a household name in the Asia-Pacific region. Not only that, Uniden has extensive reach and depth in other global markets like Europe and the Americas… including the US. But their engagement in this specific instance, is for the Asia-Pacific region... and they came to the table through Mint Wireless as the Asian distributor/sales agent.
Consider this...
I bought my Uniden cordless phone system, here in the US, in 2007 from Costco... after having done some research looking for best of the breed. In the Asia-Pacific region, my friends and family tell me that Uniden is a very well known and respected brand name. Microvision has done well teaming-up with Uniden as its first global consumer electronics OEM. Granted, they are not Sony or LG Electronics... but that may happen soon after when green laser supply picture changes.
Here’s more information on Uniden and some well known competition…
Uniden Corporation
http://wrightreports.ecnext.com/coms2/re...
Motorola, Inc.
http://wrightreports.ecnext.com/comsite5...
Nokia Corporation
http://wrightreports.ecnext.com/comsite5...
For those who may not know, Uniden is a pioneer of many electronic gadgets brought to the market…
o 1st to manufacture a cordless phoneUniden is the world's largest manufacturer of wireless communication products and the world's leading cordless phone manufacturer.
o 1st to offer voice scramble security
o 1st to introduce selectable channels
o 1st to introduce caller identification
o 1st to introduce a completely digital phone & digital answering machine
o 1st to introduce a 900 MHz analogue cordless phone into Australia.
o 1st to introduce 5.8 GHz Digital Spread Spectrum cordless phones into Australia
o 1st to introduce Wideband DECT Technology into Australia
o 1st to introduce 3D Mapping into Car Navigation for Australia
o 1st to introduce XDECT Technology into Australia.
• Now look at the statement again…
“… three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store.”
That clearly means we should see several international distributors worldwide selling branded products with Microvision Logo and the distributor doing the marketing, sales, and support. The first market that Microvision has opened for its branded product is the Asia-Pacific region. And the first distributor in the Asia-Pacific region is Mint Wireless for example. Mint Wireless is a well know distributor of consumer electronics products in the Asia-Pacific region.
Here’s information on Mint Wireless and also the distribution agreement with Microvision…
“Mint Wireless Limited (http://www.mnw.com.au/) is an ASX listed technology company focused on providing mobile payment solutions (http://www.mint-wireless.com/) and the development and management of consumer technology products and services. Mint is a developer and leading distributor of innovative consumer technology products to many of Australia and New Zealand’s largest retailers and online e-tailers.”
Here’s the link to the agreement with Microvision…
http://www.mnw.com.au/images/ASX%20Announcement/20091022_Mint_signsexclusivedistribution_agreementwithMicrovisionandreceivesinitialorderfromUnidenFINAL.pdf
Mint Wireless is not really a distributor in the way we think here in the US. In the context of their relationship with Microvision, they may act like a sales agency [very common practice in the Asia-Pacific region] working off a small percentage commission like 3% to 5%.
Their mission is more like helping Microvision [as an agency] open the doors to OEMs and help book sales. One such door they have opened for Microvision is Uniden. Mint Wireless also buys product for its own account and certainly does issue a PO in its own name. If you look at their size [in terms of revenues] they are only $12 million dollars from the Australia/New Zealand region. However, with Uniden contract in hand and working as agents for Microvision, they hope to bring-in high margin revenue with little cost exposure.
• Now let’s move on to the next part of the statement…
“Microvision has signed several marketing and distribution agreements with international distributors in Asia and Europe to launch Microvision branded and private labeled versions of the laser pico projector.”
This clearly tells me, without a doubt, that there will be more regions in the world, like Europe and the Americas, which will be opened in the near future. I expect to hear, on a monthly basis, the names of more global consumer electronics OEMs for white labeled products and regional distributors for Microvision's branded products.
• Now back to the first part of the statement one more time…
“The Company plans to distribute its accessory pico projector product through three sales channels: … and Microvision direct sales through its on-line store.”
That tells me, we should soon see an on-line Microvision store selling Microvision brand laser PicoP projectors… including the SHOWwx and its derivatives.
I hope that helps, to clarify the way business is being done and who the household name players are in the Asia-Pacific region.
Not only that, I hope this post has helped you clear-up the marketing and distribution strategy that has been adopted by Microvision for its stand alone accessory PicoP projector SHOWwx.
Stay tuned for Part 2 to this post… which would cover the green laser supply issue as part of the post titled: Microvision: 3rd Qtr Earnings Conference Call – October 22nd, 2009.
The journey to “Image by PicoP” ubiquity has just begun… and we are on the roll.
As Matt Nichols from Microvision said…
“Mint Wireless and Uniden Start the Ball Rolling”
It’s a roll… meaning a little push is all it takes to continue gathering momentum.
Be part of this momentous journey and not just watch the caravan pass you by.
Anant Goel
http://www.wealthbyoptions.com/
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