MicroVision (MVIS) Stock Tumbles: Should You be Concerned?

Microvision MVIS Stock News

MicroVision, Inc. (NASDAQ: MVIS) has had my attention for several sessions now. Since rumors started breaking that the company would be acquired by Microsoft Inc (NASDAQ: MSFT), I’ve seen a strong opportunity in the making.

Nonetheless, with the stock dipping down more than 5% in the premarket hours this morning, many are getting concerned, but should you be? Not in my opinion. Here’s how I see it.

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MVIS Is A Victim Of Investor Impatience

Rumors in the stock market happen all the time. However, I don’t generally follow them as they are generally invalid and can lead to big losses for investors. Nonetheless, there’s something different about the MicroVision rumor that really has my attention. We’ll get into that in a minute. For now, let’s talk about why the stock is dipping.

Ultimately, the dip in the value of MVIS stock today seems to have a lot to do with the fact that generally, investors are impatient. For little more than a week now, everyone seems to have been focusing on a potential takeover of the company after rumors spread that it was on the horizons.

However, here we are over a week later, and now news with regard to a takeover has been released. While this is leading to fear that a deal will not happen, I still believe that one will, and that patient investors, will likely benefit greatly from the move.

The truth of the matter is that acquisitions simply don’t happen over night. Negotiations can take months for a takeover to go from idea to fruition. And, while I don’t normally chase rumors, I do believe that this one is true. There’s good reason for MSFT to take MVIS over.

Why The MicroVision Rumors Have My Attention

In most cases, takeover rumors make sense, but there is generally no evidence that work toward a transition is already being done. In this particular case, that evidence does exist.

MVIS is a company that makes key components for Microsoft’s HoloLens, a product that is touted to be the future of augmented reality. However, due to the struggles that the company has been facing, production of these key components was backed up.

Recently, the company announced that one of its larger customers has taken over production of these components. I believe that larger customer to be Microsoft.

At the same time, multiple high-level research employees of MVIS suddenly jumped ship to go work for MSFT. That’s a big deal, once again showing that the two companies seem to be preparing for a transition.

However, what seems to be the biggest piece of evidence was a statement made by Sumit Sharma, CEO at MVIS. In a statement, he said:

Acquiring one or more product verticals may be more appealing than acquiring the entire company for certain interested parties.

The statement came during the most recent quarterly results call four days ago. Sharma was discussing work to find a potential suitor, and the statement makes sense when we talk about the MSFT chatter.

Ultimately, Microsoft will see incredible value in the acquisition of IP associated with HoloLens. So, there’s a strong chance that instead of a full acquisition, the company will acquire this IP. No matter how that pans out, a deal with MSFT would likely send MVIS stock soaring.

The Bottom Line

Ultimately, investors want a deal to happen soon, and I don’t blame them. But these things take time. All signs point to either a full acquisition by Microsoft or the purchase of IP having to do with HoloLens. Either way, if the deal happens, it could be a big win for all involved, making MVIS stock one to watch closely.

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