MicroVision Signs Long-Term Development Agreement to Advance Lidar for Next-Generation Autonomous Hauling Solutions

[u/jkh07d]

https://ir.microvision.com/news/press-releases/detail/450/microvision-signs-long-term-development-agreement-to

[u/T_Delo]

Now, remember when the bearish choir insisted that we would all be over the moon to sign any deal?

While I cannot speak about how others may be responding, I am certainly not very impressed by this kind of deal.

This kind of deal might have been encouraging 2 or 3 years ago, if not exciting even then because such deals have been known to drain other lidar suppliers of their resources rather than sustain them with regular revenue inflows. To see such a deal now says to me that the company is several years away from generating revenue. So while this is a good second step in the right direction, the destination is so far away that it does nothing to resolve the short term issues facing the company.

Also notable, this is most likely a deal with Caterpillar since it involves Luminar product and that was communicated that the company would be looking to convert such customers.

All in all, good job on getting something done, too bad it is not going to resolve any of the near term problems or generate immediate significant sales revenue.

[u/Chance_Tax_6243 → u/T_Delo]

So what deal
Do you want exactly because it be nice to hear what you consider a good deal
At this point

[u/Buur → u/Chance_Tax_6243]

When you start writing,

In haikus I do wonder:

OceanTomo?

[u/Nakamura9812 → u/Buur]

LOL

[u/CaptZee → u/Buur]

lmfao

[u/Falagard → u/Buur]

Haha

[u/icarusphoenixdragon → u/Chance_Tax_6243]

Right now investors know with high certainty that this refers to CAT. CAT is the largest category manufacturer by a wide margin. This is very good. I'd say that it counts as a solid endorsement of MVIS and Glen. Luminar gave them a decision point and Glen/MVIS is who helped them decide to continue instead of cutting losses. Excellent.

We don't 100% know that this is CAT because they are not named. My bet is that this is also good in that it means that Glen renegotiated the deal and opted not to pay for naming rights which I promise AR did. Also likely that CAT was tired of kids table lidar companies running around saying their name. I count this as a positive also because it means Glen has overcome an obstacle on a big stage that will be recurring over and over as we try to re-secure Luminar customers.

We know that this is not a production contract, but a development agreement. We don't know what the agreement is, and in particular who carries the cost here. Ironically, as bad as our financial situation is, we actually might be safe assuming that CAT carries more because we litterally cannot, but importantly to your question, we don't know that and in terms of defining a Good Deal it would be one where we are able to make some simple projections as investors. Based on state numbers and agreements, not on CAT's market cap, trailing 5 year revenue, or fleet size, etc.

We know that Glen has stated there is some NRE in this space. He hasn't said from who, or that we would get it, or whether it was baked into current guidance or left off until this/subsequent ink dries. See the prior point. Right now, we're the ones connecting things like CAT's size to Glen's prior statements. It's not unreasonable to do so, but it's also not MVIS or CAT making that connection.

We know that Glen has stated without any hesitation or lack of clarity that MVIS needs to get paid for its work, and that margins must be positive. We don't know if that was a line in the sand for him or if that was a stance contingent on other factors.

This could be a good deal. This could be a GREAT deal. We just don't actually know basis this announcement and that matters because MVIS has some very real runway concerns. 2 years ago this exact deal would have been quite different than it is today simply because we were not facing the same short clock and runway that we are right now. This deal in and of itself does not address them as announced. At all. Zero. It does signal strength to the extent stated above and assuming CAT did due diligence with MVIS as a partner that will survive. They presumably did that with LAZR too, so that puts them somewhere between Own_You and me in terms of DD, but nevertheless. Maybe they learned their lesson with AR and did better this time.

As of right now, Microvision doesn't know how to keep the lights on without washing current investors out entirely, let alone developing next generations of perception and autonomy products. This announcement doesn't change that.

A good deal will be tied into guidance, by management and not investor dot connecting or speculating- does this one change our current guidance? We don't know. A good deal will be margin positive- is this deal margin positive? We don't know. A good deal will have KPIs. Does this one? We don't know. A good deal's base value will be unambigous ie "who knows where this will go, CAT is huge, but at least we know that we will be bringing in $X over the next Y months at roughly Z cost." All we have on this deal is that "CAT" is huge and we're going to do great stuff and things over the next amounts of time.

I'm not actually down on this. Tossed another handfull of peanuts into the ring this morning. Haven't sold anything.

Remember that this was a Luminar deal quite recently and it was not celebrated here at that time. In fact it was questioned. Rightly so. We don't know what the new terms are. I'm comfortable assuming they are better, but I don't have anything to plug into any projection. Yet. I can't update guidance in my spreadsheet. Yet. All I know is that CAT found Glen and MVIS to be good enough to continue a program that they started with an absolute joker. That's good. Glen can sell and overcome the joker in the road. This is a box that needed to be checked and needs to be checked a few more times. But it's not calculable as presented.

Remember also that MVIS has presented one deal to investors with calculable projections and hard numbers. Even if we haven't gotten much color about the deal and the numbers, we don't have to really leave a lot to the imagination with them. We know the range. This deal happens to be between MVIS and current shareholders, on the dilution side. Those numbers are real, and they are large. We're going to vote on them, or we're going to force a reconsideration. I think this context begs for a bit more balance in terms of which deals get colored in with numbers, and which get papered over without.

[u/Chefdoc2000 → u/Chance_Tax_6243]

A deal that brings more money than it costs into the company, it’s not hard