Microvision (MVIS) Stock Heads For The Top: Here’s Why

Microvision MVIS Stock News

Microvision, Inc. (NASDAQ: MVIS) is screaming for the top in the market this morning. However, if you’re looking for press releases and SEC filings, you’re out of luck. There hasn’t been a PR or a filing for some time. So, what’s the deal?

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Here’s Why MVIS Is Climbing

As mentioned above, Microvision is climbing in the market this morning with no news suggesting why the gains are happening. However, there’s a good reason for the gains.

A Seeking Alpha contributor recently wrote an article about Microvision’s attempt to sell itself. Let’s not forget, due to the pain of the COVID-19 pandemic, the company is currently exploring strategic alternatives, including but not limited to the sale of assets or the company as a whole.

In the article, the contributor pointed out the value of Lidar in autonomous driving and suggested valuation of an MVIS takeover based on its competitors. At full price, the author suggested that MVIS is worth about $20 per share, considering its activities in lidar, AR and VR.

However, with a company in financial hardship, this type of valuation simply can’t be expected. Considering the current state of financial stability at Microvision, the author suggested that an acquisition of Microvision should happen at around $10 to $13 per share. Sure, that’s a strong discount from what the author believes to be a fair price for the comapny, but it’s far above and beyond where MVIS stock is trading today.

Can We Expect Such A Strong Premium

If a suitor does decide to purchase Microvision at $20 per share, the purchase would represent a premium of more than 300%. Unfortunately, I don’t see that happening. The buyer would know the state of the company, and while the value of the technology is high, the buyer would also be taking on quite a bit of a financial headache, which warrants a deep discount.

Ultimately, 30% to 40% premiums suggest that the buyer is overpaying for the acquisition, a premium of ten times that is likely out of the question. However, I do believe that considering the current trading price of the stock, a strong premium is warranted.

Based on the compelling arguments outlined in the article mentioned above, and the fact that the buyers are going to look for a more realistic valuation given current situations, I’m expecting that if a deal were to happen, it would take place around $4 to $5 per share. Sure, that offers up a heavy discount compared to the company’s peers, but MVIS has its back against the wall and will be forced to accept far less than its competition. The good news is, even at this price, the return of value to investors who buy in at these levels would be tremendous!

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2 thoughts on “Microvision (MVIS) Stock Heads For The Top: Here’s Why”

  1. Their technology and patent portfolio are what is going to be their money maker. Your delusional also if you think it will sell for $4-$5 range.

    1. To each his own, but at present, I don’t see anyone paying the premium to get it to the $10 range like most are hoping.

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