The evidence is more than circumstantial. Mike Schonberg, the head portfolio manager of the Drefus funds that accumulated the 685,250 share position in MVIS, was demoted (basically fired imo) for the poor performance of his funds. As most of the stocks in his portfolio were highly speculative,often illiquid, with many priced under $3.00, he was forced (or told) to sell his higher priced stocks to meet shareholder redemptions and rebuild the fund's cash position. Consequently, MVIS has been under unusually heavy selling pressure lately.
The bad news is Schonberg has sold nearly 500,000 shares of MVIS in the past several months. The good news is as of April 24 (as best I can determine) he only had about 155,000 shares remaining, and given the relatively high volume days since, I would suspect that he has nearly completed the sale of his position. However, his unabated selling has created a weak technical chart pattern, that has encouraged others to follow his lead and sell too. It's a reaction that I term, "sell first, check the fundamentals later". Just as you can have upside momentum when prices appreciate, you also get the reverse when a stock price declines. Eventually, however, the fundamentals of the company will govern the stock price, either to the upside or the downside.
The question that needs to be asked then is: Have the fundamentals negatively changed to warrant the recent price decline? No. Not that I can determine. Quite the contrary, the technology continues to improve (dramatically in my opinion: for example in the past year Microvision has reduced the size of the image scanner, one of critical components of the VRD to 1/100 the volume of the original MRS) and revenue continues to increase. If the Seattle Times article previously mentioned in an other post is correct, Microvision is expecting at least another $5 million in contracts this year.( a figure I'm sure that they got directly from Microvision)
So, the fundamentals continue to strengthen, good news on contracts should be forthcoming, and with that I see no reason why the stock won't eventually price that into the market. Further, I know Microvision is keenly aware that it has to increase its institutional base for the stock and is rapidly working to address that issue. Once that corner is turned, you would be surprised how fast some sellers turn into buyers.
R.F. |
