Microvision MVIS Stock News

Yesterday was a big day for Microvision, Inc. (NASDAQ: MVIS). The stock climbed by nearly 150%. Today, the gains are continuing with the stock up around 40% in the premarket. However, still, there has been no news. So, what’s the deal?

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MVIS Stock Is Centered In Takeover Chatter

While no news has been released, as I pointed out in an article yesterday about Microvision, the gains seem to be the result of takeover chatter. The chatter suggests that Microsoft is interested in taking over the company, and there may be some truth to it.

Ultimately, what we do know is that MVIS said that one of its larger customers has taken over part of component production. While the customer wasn’t named, the United States Army essentially thanked Microsoft for taking control of a supply chain that would get key products to it quickly. Of course, these are products with components that the company said its customer is creating.

So, when we put two and two together, we get four. Or in this case, we come to the conclusion that this unnamed customer is Microsoft.

Shortly after all of this unfolded, MVIS announced that it’s working to look into strategic alternatives to drive shareholder value. Of course, in the announcement, the company said that it is open to mergers and acquisitions.

At the end of the day, if any company is going to benefit from acquiring Microvision, it’s going to be Microsoft. Not only do some Microsoft products use Microvision components, Microsoft seems to be producing these components.

So, not only would the company benefit from having lower cost access to these components, it’s already integrated at least one of the company’s processes into its normal day to day business.

As a result, there’s good reason for the chatter suggesting that MVIS is going to be acquired by Microsoft.

What Happens Next?

I’m not necessarilly going to say that Microsoft and MVIS will announce an acquisition today or tomorrow, but I do believe that we’re going to see some deal here. Keep in mind that there are several types of strategic transactions available.

However, there are only three outcomes that I view as likely here:

  1. First and foremost, investors could be right and Microsoft could acquire Microvision relatively soon. Of course, this is what everyone seems to be hoping for.
  2. There’s also the potential for Microsoft to buy or license key assets from MVIS. In this case, Microvision would continue to operate as a standalone company, but with a large infusion of funds through the sale or licensing of these key components.
  3. Then, there’s always the chance that everyone’s wrong here and we don’t see a deal of any kind. Of course, if this happens, the stock will likely fall back to where it was before the dramatic run started yesterday.

Nonetheless, I do believe that options numbers one and two are most likely. Only time will tell, but if all goes well, MVIS represents an incredible opportunity.

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