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No. of Recommendations: 2
MicroVision Annual Meeting of Stockholders June 7, 2017

CAVEAT
I am human. Mistakes will be made. The SEC and Investor Relations are the bastions of truth. So, feel free to correct me, ask them, or better yet, do all of that and then ask the other attendees what they think. Multiple points of view, a diversity of opinion. Good stuff. (Yada. Yada. I've done this often enough that the CAVEAT has become mostly a copy & paste, partly because I am lazy, mostly because I hope it's good enough.)

INTRODUCTION
This was the year that wasn't supposed to happen this way. Either the company would be doing far better or far worse than last year. Parsing press releases is necessary, but attending the annual stockholders meeting provides an opportunity to parse body language as well. I showed up out of habit and curiosity.

The demos drew crowds and were well received. They looked sharper in terms of technology and general presentation. Last year looked good. This year looked better. The demos I saw were: LiDAR, Interactive Display, Scanning Display, and the low profile projector. I thought the LiDAR was a nice improvement over last year. The presenter said there wasn't LiDAR last year. I may be conflating LiDAR with the 3D scanning from last year. Each of the units met expectations. None exceeded mine, but that may be due to so many years watching the company and its technology. One thing I noted was that there were no branded products on display. In previous years there were at least partner demos with Celluon and a smartphone with an embedded projector. Maybe I didn't look closely enough.

The good news is that more people showed up this year. At last count, there were about 61 people in a room that had seats for 70. I believe this is larger than last years (~48). Many folks stood in the back, so the count may be off because I was focused on watching the front. The mix was younger with long-term investors, including a few who have owned shares for over a decade and finally made it to a meeting. In case I forget to mention it in the Conclusions, for me, the shareholders are as rich a resource as any of the officials. They're less constrained in what they can say. Fellow investors may also have less accurate information, but in an information sparse company like MicroVision, supply and demand are exercised.

OFFICIAL MEETING (condensed for clarity)
Everything passed. Register your surprise if you have any. Notably, only one issue passed with more than 90% of the vote, though all were over 80% of the vote. Considering that MVIS is majority owned by individual shareholders (~78%) dissension carries greater weight, though not enough to affect outcomes.

BUSINESS PRESENTATION (the main event)
As usual, the CEO presented the company's achievements, position, and plans. In general, he sees rapidly building momentum. Some things like 3D LiDAR are the result of decisions made in R&D four years ago.

The four main players noted were: Sony, Sharp, ST Micro, and a "Top Technology Company" (yet another unnamed major player).

The four main product technologies being pursued are: Display, 3D Sensing, HUD, and eyewear. He spent considerable time describing IoT, the Internet of Things, that is driving much of the industry. Resource limits may require prioritization, which is typical for any company. I was glad to see a more detailed product pipeline chart. It included about a dozen dates for product introductions. Because these things slip, and later ones are more likely to slip, I'll pass along the three near-term ones: Small Form Factor display (small devices/after-market HUD) Mass Production begins 3Q17, Interactive display MP begins 4Q17, and Navigation MP in 2H18. (my take: In some ways this is familiar, (things are going to happen real soon), in other ways this is new territory (soon is next quarter).)

While they know they are criticized for not making many major announcements, one chart illustrated the several significant announcements made in the last nine months. They also acknowledged the last two "doughnut" quarters. This was their opportunity to emphasize the 60% revenue growth in 2016 over 2015, the confirmation of the guidance of $30M-$60M in revenue expected 12-18 months after the launch of the engine in 3Q17, and the 2Q17 receipt of the $10M portion of the $24M contract. As usual, there's more news, but it involves deals, dollars, and companies that they can't name.

One cause for optimism is the growth in diversity in the revenue stream from one platform in 2016 to multiple platforms in 2017.

They're "feeling very good" and have "more opportunities than they can address".

QUESTIONS & COMMENTS (I appreciate the acknowledgement that for some people, the opportunity to make a comment is valuable. I find this portion valuable for the insightful questions and the dance as the answers are wordsmithed in real time. Paraphrased because otherwise I wouldn't be able to keep up.)
? What happened to companies like the "regional brand name" described in 4Q14? Some customers walk away. Others are dealing with MicroVision's customers (Sony) and not directly with MicroVision. (A point was made that some people want to hear the bad news as well as the good, but I can't recall if that was part of the Q&A/C or side chats afterwards.
Comment - Congratulations to the board and officers for keeping the company alive in difficult times
? There was a request for the company to do more marketing about the company. (It sounded like there was a miscommunication about who to market to: customers, institutional investors, retail investors.) Folks from the company described investor conferences. Shareholders in the audience described road shows and the possibility of an Investor Relations newsletter.
? Predatory trading, shorts, etc. were acknowledged, they hate it, but they can't do anything about it.
? A shareholder suggested marketing to the maker/Arduino market. Evidently, ST Micro helps with that.
? The Facebook page was given good marks. A web site redesign is in work. (Personal plug: I help people with their social media campaigns - and need to better with my own - and see opportunities for improvement. Looking forward to that.)
? Dilution will be necessary for survival. If things move slowly, they'll need the money. If things grow too quickly, they'll need the money.
? The CEO reminded us that they are "working for you".
? MicroVision's position within the IoT framework and platforms may not be a VHS/Betamax battle, though that is going on now.
? Asked for the most challenging question any independent director has asked, they responded with "how to maximize shareholder value for you", "most challenging board to CEO", and "nothing casual" about the way they operate.
? The $24M contract is one of the most exciting things going on.
? There is no Poison Pill because they are considered to be ineffective.
? The possibility of funding the company from retail investors rather than conventional financing was suggested, but described as being more complex than it seems.
? Straight IP licensing will be more viable when the market has emerged.
? They can't disclose the latest development contract.
? They are receiving royalties from the Taiwanese ODM.
? The second engine is the bigger contributor to the projected $30M-$60M revenue possibility.
? Qualper is dealing with Sony, not MicroVision, so MicroVision doesn't know what's going on with the product.
? There is nothing to announce about MicroVision technology development in Israel.
? The patent value may be a major contributor to the market cap.

COMPANY CONCLUSION
They saw the year as "four steps forward and two steps back."

MY CONCLUSION AND SUMMARY (I look forward to others' conclusions and summaries for comparison. For a more personal perspective on investing in general using MVIS as an example, visit my blog. https://trimbathcreative.wordpress.com/2017/06/07/corporatio...)
The biggest improvement I've seen has been a continuation of what I saw last year. Earlier, I'd describe MVIS as a stock for a company that could succeed famously, or go bankrupt. The good news is that I feel the likelihood of bankruptcy is greatly reduced. The company has the potential to succeed famously. If so, the board and officers may profit impressively. So may major investors and investors who have a very low cost basis.

My bad news is that dilution has severely reduced my potential gain from the company. When I first bought MVIS shares, there were only ~ 12M shares outstanding. Now there are ~70M. Between those two was an 8-to-1 reverse split. Divide that first number by 8 and get down to an equivalent of 1.5M. My fractional ownership of the company has reduced with each dilution. Since those first shares in 2000, I've invested at least three years of living expenses into MVIS. Currently, they are worth about three months of living expenses. I don't expect those first shares to ever reclaim their value, and am glad I drove down the cost basis with several purchases since then. If MVIS rises twelve-fold, I'll recover my investment. I believe that potential exists, but I haven't updated my analysis.

A group of shareholders met for lunch afterwards. Another benefit of attending the shareholders meeting. The consensus was that MicroVision remaining independent was best, but that a buyout wouldn't be a surprise. As I recently witnessed with MicroVision's spinoff, Lumera/GigOptix, a buyout can happen as low as < $4 as long as the greatest number of shares gets a good enough deal. With each increase in price, a greater percentage of the shareholders will vote for a buyout. What number reaches 50+%? It is a guess at this point, but I wouldn't be surprised if it was for less than 12 times today's price.

The company, and maybe the stock, have reached the point where next year's meeting will be much more of a celebration with less talk about doughnut quarters, backward steps, and reliance on unnamed partners. I've felt that way several times in more than a decade of MVIS ASMs. Ah, but this time will be different - I hope.


DISCLOSURE: LTBH since 2000, rarely mentioning the company to friends and shareholders. MVIS price moves have already damaged some relationships.
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