My EOY review of MVIS
INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.
MicroVision
MVIS (market cap was $0.149B mid 2015 is $0.135B EOY2015)
MicroVision is a electronics component company based on the technologies enabled by a mirror on a chip. By creating a mirror on a chip and doing so in a way that allows the mirror to be oscillated, images can be projected and captured. As of 2015, the first profitable and high-volume consumer device, a portable projector about the size of a smartphone, has been made available for sale through MicroVision's customers. Celluon began selling the PicoAir and the PicoPro in the spring. Sony began selling an improved variant in the fall. All are receiving positive reviews, though none are blockbuster products. The list of possible applications is extensive (and a notional list has been published previously), with current prototypes including Head Up Displays for cars (one of which has already made it to market in Japan by Pioneer), eyewear (ala Google Glass), package sorting aids (with UPS), and interactive table tops and displays as demonstrated by Sony and others at CES2015. Game controllers and bar code scanners have also been developed (the bar code scanners even made it to market - unsuccessfully.) At various times, the largest market anticipated is the embedded market, where tiny projectors will potentially be as ubiquitous as tiny cameras. The technical issues may have already been resolved. One innovate embedded application is as a projector in Sharp's RoBoHoN smart robot phone which is due to go on sale in spring of 2016. MicroVision operates under numerous NDAs, and communications with the company have been easily mis-interpreted, so speculation is high but reliable information is low.
2015 was the first year where product revenues were high enough for investors to consider the possibility of positive cash flow or profitability. Delays revealed in the most recent conference call dampened the stock and the expectations because they represented delays and costs. The conference call also failed to provide guidance on any new products, or insight into how the MicroVision components are being incorporated into existing products or future products. The good news is that regular dilution of the stock may have slowed or stopped. The dilution is significant enough, however, that previous estimates for the stock price have to take into account the increased number of shares.
The potential is great because pico-projectors can possibly do to laptop displays what laptop displays did to CRTs. The size, power requirements, quiet operation, always in focus image, and image quality can be highly disruptive to a very large market that readily accepts innovation. That potential has existed for years, and is either unrealizable, or about to be demonstrated, or as with all predictions about to be manifested in ways we can't expect.
Based on comments made by the Board at the 2014 ASM I was able to estimate MVIS share prices with a lot of assumptions then, which I've updated: (https://trimbathcreative.wordpress.com/2014/06/03/corporations-meet-owners-mvis-2014/)
- PicoProjectors may follow a similar adoption and market revenue as embedded cameras.
- "three years ago they could only meet 1% of the need" - "100 fold growth in three years if MVIS can handle it now"
- "far higher than several million units per year within three years" - Didn't an earlier PR or CC mention several hundred thousand unit capability for 2014?
- Some conservatism that could make the estimate low - "Projection should be more valuable."
- Some optimism that could make the estimate high - estimate based on insignificant competition.
- Some conservatism that could make the estimate low - estimate only based on camera-enabled products, but projection may enable a more diverse set of products.
(pardon the formatting)
camera price camera volume camera revenue (not profit) MVIS $? assuming 50M shares MVIS dates
$150 1,000,000 (guess) $150,000,000 $30 2016
$80 10,000,000 (stated) $800,000,000 $160 2017
$30 100,000,000 (stated) $3,000,000,000 $600 2021
$15 1,000,000,000 (2014 industry estimate) $15,000,000,000 $3,000 2024
note: primary update is shift in years by 1 and shift in shares to $50M
I'd like to make a better estimate, but the lack of information from the company and the disruptive nature of the technology create great variability in any analysis. Such high potential stock prices have been part of MVIS' allure for years. In 2012, I alluded to a previous estimate that was ~$125 pre-split and ~$1,000 post-split. (https://trimbathcreative.wordpress.com/2012/11/17/waiting-for-picop/) Estimates are a necessary part of investing, but they remain a fancy name for guessing, and many people have been guessing about MVIS for decades. One thing that has changed from last year. Prior to 2015 I described MicroVision as a company that could be very successful or could go bankrupt. The company's cash flow, backlog, and potential pipeline are impressive enough that I think the likelihood of bankruptcy is greatly diminished; though they are not enough for me to confidently expect a near term sudden success. But, it could happen.
I continued to Buy in 2015 because the hints, rumors, and expectations were for imminent news. Disappointments were delivered instead. But those disappointments were only temporary postponements. Right?
DISCLOSURE LTBH since 1999 (though the very first shares are gone), and my patience is gone, yet my perseverance and majority of shares remain. I have more than enough if the company finally succeeds and the stock reaches the heights I think are possible. I may buy and have bought more simply because the stock is so cheap.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com. By chance and habit I have also written extensively about the company and the stock on my blog. trimbathcreative.wordpress.com |
