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MicroVision Holds the Keys to the Future & 3,000% Profit Potential in over $10 Billion M/A?

12/9/2020 Anant Goel

Luminar Technologies (LAZR) went public and the stock price at $40 dollars more than doubled in two days as a public company, with a market cap of over $14 billion… and made its co-founder  CEO Austin Russell a billionaire ─ at the age of 25. Luminar specializes in making Lidar sensors for the automotive sector that will be used in the development of autonomous vehicles.

However, the keys to several future technologies are being held by an older company that was always ahead of its time. MicroVision (MVIS), founded in 1993, is most famous for their Micro Electro Mechanical systems (MEMs) and Laser Beam Scanning (LBS) technology that is protected by over 500 patents.

MicroVision’s automotive Lidar will be packaged in a solid-state module that is smaller, cheaper and more versatile than potential competitors like Luminar and Velodyne.

Autonomous vehicles of the future will utilize MicroVision’s Lidar because it is a superior technology compared to Luminar and Velodyne; and due to its small size, 200M range, and point cloud density of 20 million points per second.

MicroVision: Who are they?

MicroVision is most famous for their Micro Electro Mechanical systems (MEMs) and Laser Beam Scanning (LBS) technology. When combined, MEMs and LBS utilize red, green, and blue lasers in conjunction with two mirrors that sweep in multiple directions to create images in 3D space.  MicroVision is the leader in this technology due to the size, weight, and power of the MEMs module they created.

Why does any of this matter?

In The Future is Faster Than You Think, Peter Diamandis and Steven Kotler suggest that the next 10 years present an inflection point for technology. Technologies like Lidar, artificial intelligence, 5G, and augmented/mixed reality are all converging. When they are combined, modern society is going to adopt spatial computing and autonomous vehicles en masse. Sensors like Lidar will collect information all around us. Artificial intelligence (AI) will process that data and deliver it to us in ways that we can understand. 5G will deliver that data quickly, reliably, and with low latency. Augmented reality (AR) and mixed reality (MR) will be the tools we use each and every day.

MicroVision has the keys to the Lidar, AI, and AR/MR kingdom. The keys come in the form of over 500 patents — patents that the big tech giants need to bring all of this technology to the masses.

How does MicroVision hold the keys to the future?

MicroVision holds key patents for AR/MR, interactive displays, and Lidar technologies.

In the augmented reality space, MicroVision has created a module that is small enough that, when combined with the right waveguide, will lead to the creation of AR glasses that are both stylish and useful.

Augmented Reality Micro-Display modules developed by MicroVision

In the mixed reality space, MicroVision’s module is already having a significant impact. The module is the main driver behind Microsoft’s HoloLens 2, which in turn is impacting several sectors like manufacturinghealthcare, and the military.

A teardown of the Hololens 2, showcasing its utilization of MicroVision tech

Interactive displays will disrupt the smart speaker space. Amazon, Google, and Apple are all duking it out to deliver the smart speaker that every household will use. Whichever company adds these displays to their devices first will win this “king of the hill” competition. 

MicroVision showcasing an interactive display at CES 2020

Finally, MicroVision holds key Lidar patents, both consumer and automotive.  Consumer Lidar can be used in the smart speaker space as well as the smart home space. We could place Lidar sensors around our homes. They could be used in conjunction with home security devices or even put into devices like refrigerators, tracking items and automatically purchasing goods that we need before we run out.

MicroVision’s automotive Lidar will be packaged in a solid-state module that is smaller, cheaper and more versatile than potential competitors like Luminar and Velodyne.  Autonomous vehicles will utilize MicroVision’s Lidar because it is a superior technology; and due to its small size, 200M range, and point cloud density of 20 million points per second.

Why have I never heard of MicroVision, and should I invest?

The best way to think about MicroVision is like a biotech company. Those companies invest a lot of money into research and development versus focusing on profits. We don’t hear about the company until it passes clinical trials or shows some promise with the drug that they are trying to produce. If the company is publicly traded, the share price goes parabolic.

MicroVision similarly focuses on research and development rather than profits, which has led to a low share price. Due to the inflection point, the time has finally come for MicroVision.

The company’s leadership knows they are at this point, which is why they put the company up for sale. The CEO, Sumit Sharma, has an immense amount of experience in the AR/MR and Lidar spaces. He has been transparent with shareholders about the fact that MicroVision is focusing on getting shareholders the best possible value for this revolutionary technology.

Sharma and the CFO, Steve Holt, frequently have “Fireside Chats” after earning reports. At the most recent chat on November 13, 2020, they gave investors updates on their strategy for a buyout as well as their progress on automotive Lidar. The conversation, as reported by shareholders participating in the meeting, focused on getting the right valuation. Shareholders, primarily retail investors, are disappointed that the deal is not done yet. MicroVision has close to 500 patents that span across all of the verticals mentioned above. The company reports that potential suitors are in various stages of due diligence.

MicroVision is not willing to give the company away and suitors will work hard to try and get the best possible value for themselves even if they have a lot of cash on hand. Facebook, for instance, could greatly benefit from acquiring MicroVision. In The History of the Future, Blake J. Harris outlines Facebook’s acquisition of Oculus, a company in the virtual reality space. Harris details the negotiations between Mark Zuckerberg and Oculus and the fact that, even though Facebook had a lot of cash on hand, Mark and team negotiated hard to keep acquisition costs low. That buyout, for a single vertical, was $3 billion; if MicroVision were to be sold for that amount it would be worth approximately $21 a share.

The Fireside Chat also focused on the automotive lidar progress. MicroVision has a working prototype that showcases the “must-have” features that potential customers and regulators requested.

Investors are being presented with a unique opportunity. They are supporting a company that holds patents necessary to push forward key technologies in the areas of spatial computing and autonomous vehicles. A buyout or strategic investment can happen at any point from now until the automotive Lidar demonstration in April 2021. MicroVision has proven that they are going to continue being transparent with shareholders and will work hard to push the envelope with the technology that will impact all of our lives in the coming years.

Real billion dollar ideas have trillion dollar market size, they are scalable, and leverage the drivers of growth to go viral or global.

In my last research on MicroVision (NASDAQ: MVIS), I introduced this 20 year old high-tech company that is at the cusp of acquisition by a major technology company. In the last few weeks, MVIS stock price has gone up by 15-fold [from 20 cents to over $3.30] on speculations. Now, after the Q3 earnings conference call it is trading in the $2.30 to $2.80 range giving new investors the opportunity to take position; for the future of $70 to $100 dollar trading range in the next year or so... depending on the acquisition price of $10 billion or $15 billion... or something in between.

MVIS Stock Reacts To Breaking News 

Now that we have accepted the idea of selling or merging the company, let’s review the dynamics of what it takes for the acquirer to “taking over a publicly traded company like MicroVision”…

 

MicroVision is soliciting a friendly takeover or merger of the company.

 

Disclosure: I own shares in MicroVision. I have no business relationship with any company mentioned in this article. 

 
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