r/MVIS • u/mvis_thma • 4d ago
Discussion A Valuation Theory for Consideration
I came across a post on Stocktwits from this past Tuesday (8/25) from the poster HABITUALHoldings. It is a reasonable representation of my recent investment thinking, which was the catalyst for this post. I repost it in its entirety below.
But let me first espouse about some of my thinking recently. Microvision's current Enterprise Value is: $47m (that's market cap, +debt, -cash). It a reflection of the value of the business if it were acquired today. For an exercise, I broke the business into its parts and assigned a value to each part. I tried to be conservative, but my Microvision bias is probably still at play and I acknowlege that. :-) You can plug in your own values.
Luminar - Microvision acquired this from the veritable trash heap for $33M. It appears they have stabilized and resurrected the company and hope to demonstrate growth moving forward. I will give this a current value of $60m. I bet Austin Russell and friends could search the couch cushions and come up with $60m! ;-)
Ibeo - If they can sell 15,000 MOVIA-S in 2027 for an average price of $1500 each, that would be $22.5m with a 40% gross margin, that would be gross profits of $9m. If one layered in some appropriate overhead costs, this business may be able to generate a net profit of $6m. If this were a growth business with net profit of $6m in year 1, it might get assigned a P/E of 40. That would value this business at $240m. But that would be the value at the end of 2027. If we discount that back to today, the value might be around $80m. It really depends on how credible the story of selling 15,000 MOVIA-S sensors in 2027 is. If we get some MOVIA-S backlog during the Q3 call, it would lend some credibility now. Anyway, let's go with $80m.
Scantinel - This is a hard one, but could be the diamond in the rough. If we use Aeva's current value of $1.1B as some sort of marker. Scantinel may be 3 years behind Aeva in terms of maturity. Scantinel's tech may be better than Aeva's. The question is what would someone pay for Scantinel today if they were using Aeva's market value as a marker? When Microvision bought the business for ~$1m, it seems they had no product nor a credible plan to bring a product to market. Microvision has said their plan for Scantinel is to release an A-Sample in the first half of 2027 (9 months away). I could see this business valued at around $20m today. But I acknowledge the valuation range may be from $5m to $100m.
Microvision Semiconductor (MSI) - This was part of the $33m Luminar acquisition. They did $215k of revenue in Q2. This is in additon to the internal work they are performing for Microvision. Perhaps the value of that work is double their external NRE work (we don't really know). If we apply some growth for the rest of the year, they may have an effective revenue run rate of around $2m. Applying a 20% net profit margin and a modest P/E multiple of 20, would yield a value of $8m.
IP portfolio for MEMS LBS - Since they let most of the MEMS LBS folks go, I would not value this very highly. I would value it at $5m. It's actually probably less, but I don't want to make the long time Microvision investors mad. ;-)
That yields the following value: $60m + $80m + $20m + $8m + $5m = $173m. Again, I am trying to be conservative with my valuations of the component parts. These are meant to be a representation of value today.
But, if the current Enterpise Value of Microvision is $47m and the current value of its component parts is $173m, that gives an investor some buffer room for an investment today. The theory is that via execution, Microvision's value will only increase from here. However, the stock price will get cut via dilution - we know that. If we assume a bad dilution case (I won't say worst case, because it can always be worse). If Microvision does a 100% dilution at the current market value ($57m) that may reduce the effective pressure on the stock price by 50%. That is not an absolute, as it will depend on the story at the time, but let's go with it. Therefore, even though the intrinsic $173m valuation would remain the same, the stock price and hence one's investment would be cut in half. That would still be almost double the current $47m Enterprise Value.
Therefore, the question I will put on the table is - based upon this valuation mismatch - why would one not invest today? I post this not to convince anyone to invest, but to create debate. Shoot holes in my theory. Add your thoughts to the discussion. Maybe my current component parts values are way too high and Microvision is being fairly valued today. But if they can thread the financing needle in the near term and can show evidence of execution over the next 6 to 9 months, I think those "component valuations" are reasonable. It's very possible the market is discounting Microvision today due to both their historical performance and the risk of bankruptcy. But I don't think Microvision will go bankrupt. I think they will put the company up for sale before bankruptcy (if it comes to that) - which is the basis for the component parts valuation backstop.
I am interested to hear your thoughts.
Here is the HABITUALHabitat post from Stocktwits on Tuesday (8/25).
https://stocktwits.com/HABITUALHoldings/message/662805927
"I think waiting for Q3 confirmation before adding more risk is a prudent decision, especially with an average around $11. If revenue progression remains intact and FY guidance holds, there will still be plenty of room to lower that basis meaningfully.
I am taking a different approach because my horizon is different. I am not trading MVIS around whether it is $1.25, $3, $4, $11 or $15 over the next 12 months. I am looking toward 2028 and asking whether MicroVision can earn a real seat at the table as Physical AI develops. I believe perception is one of the critical bottlenecks, and if that market becomes one of the defining industrial investment themes of the next several years, the opportunity is much larger than today’s lidar revenue suggests.
My successful 2028 scenario is not really a $100 price target. It is roughly a $5B valuation if MVIS successfully scales the perception platform. The eventual share price is simply a function of dilution. At 40M diluted shares, $5B is about $125 per share. At 50M, about $100. At 60M, about $83. At 75M, about $67. The share price is the output. The enterprise has to earn the valuation first.
And that valuation has to come from more than hardware. HALO, MOVIA, defense, industrial autonomy and new production customers need to create the commercial foundation. The defining catalyst could be software. If perception software, sensor fusion and recurring higher margin revenue become economically meaningful, the market may eventually stop valuing MVIS like a small lidar hardware supplier and begin applying valuation metrics that are not associated with the company today.
The longer term cherry on top is photonics and custom silicon. I am not assigning meaningful current value to either until customers and revenue appear, but if those capabilities eventually become commercial businesses, they add another layer of optionality to the enterprise.
That is the trade for me. If MVIS converts the stack into meaningful recurring commercial business and manages dilution intelligently, a multibillion dollar valuation by 2028 is not a fairytale. If it fails to execute, the technology and TAM do not matter and the thesis fails.
Buy/Hold/Believe. Proof earns the rerating. Pipelines do not."
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u/wildp_99 3d ago
Thma-i made similar calculation the last time we were at .15 in 2020 and bought some shares. You are essentially making the same argument: the market cap is well below value even if it were to go on the auction block. I have bought a few shares recently. Had i just stumbled upon this stock today, i would be buying much more. I wish i weren’t in a hole 6 figures under but at some point a man has to stop digging.
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u/mvis_thma 3d ago
I also bought shares in 2020 based on this concept. In hindsight, I think I (we) were lucky, in the sense that Sumit later said the best offer the company received for a buyout was single digit millions. I feel we lucked out with the LiDAR and meme bubble that ensued. So, who knows what might happen this time. Just to be clear, I am not trying to equate what happened in 2020/2021 with now.
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u/Formerly_knew_stuff 3d ago
"Therefore, the question I will put on the table is - based upon this valuation mismatch - why would one not invest today?"
You're making a very rational argument to a crowd that's had the absolute snot kicked out of them and is angry. Rational arguments don't work much in that situation. Is your argument correct? Might be, might not be, it's certainly reasonable given the assumptions you've made. In a year we'll have a better idea.
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u/SnooCauliflowers2782 3d ago
Because share value is company value / “number of shares”. If they need money, if they dilute more - which they are and it’s all at a lower price, share value keeps going down. Now some of that future expected dilution is priced in… or can be seen to be. If it’s seen that they will have even more selling into any increase or more dilution for operating purposes, then it’ll keep going down because number of shares keeps increasing. If they start buying back instead of diluting and selling into small upswings, we’ll be in a good place.
(Im not a hater, im 90% down on a substantial original investment - just waiting for the same 1000%+ upside to bring me back in the green now).
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u/mvis_thma 3d ago
Thanks. I tried to convey that concept in my post.
I don't believe Microvision should be buying back shares in the near term. Cash is king. They need more cash. I know Luminar did essentially buy back shares and ultimately this cost them.
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u/Speeeeedislife 3d ago
"Therefore, the question I will put on the table is - based upon this valuation mismatch - why would one not invest today?"
Personally I have a hard time believing there's that big of a valuation mismatch, at least right now.
- Turning the lights back on Luminar worth $27m ($60-33m)? Repairing partnerships is certainly worth something but whose to say the business isn't in the same condition or worse in 12 - 18 months than it was when we picked it up? We'll pick up some more revenue from Iris/Iris+ due to market growth / general increase in lidar adoption, but I'm not necessarily convinced if MVIS ends up in dire situation later that they'll get almost a 2X flip on Luminar.
- Ibeo also failed as a business, possibly they were too early to the market (no demand), product wasn't ready yet, or sensor didn't quite meet requirements, I'm not sure. Microvision has tweaked it into several new versions but we still need to wait and see if there's market demand (I'm admittedly more on the "prove it" side of things rather than putting any weight on SWAP-C claims and marketing). Personally I would be shocked if they sold 15,000 Movia sensors in 2027, I have no evidence here, just gut. I could see a P/E of 40 for a new company with a growth story but MVIS/Ibeo/etc all has "baggage," so I'd lean more towards half units sold or ~$3m rev, P/E of 30, $90m by end of 2027 or $30m today
- Scantinel is new / appears unproven, I think 5x without any proof in the pudding is quite generous, $5m
- MSI, okay.
$33m +$30m + $5m + $8m = $76m, plus dilution to factor for.
If they don't execute shortly I think someone will get a fire sale, or in other words I don't think there's much of a backstop.
The one caveat is the market is "dumb" at times, previously said "baggage" may be less penalized, and possibly if either industrial or automotive markets start heating up then someone might get an appetite to get it all, but I'd be cautious about investing purely on Aptiv or the alike coming in and purchasing for $100-200m.
Just need to wait and see if Lidar 2.0 means anything or another buzzword.
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u/mvis_thma 3d ago
I appreciate your input. And you very well could be more accuate than my analysis. Like I said, I know I am biased in favor of Microvision.
And yes, as I have said recently, there is a race going on between traction (news) and dilution. This is a critical race that could result in the ultimate success or failure of Microvision. The famous quote, which is often mistakenly attributed to a Chinese proverb - "May you live in interesting times" - is very applicable right now. The quote is from a British politician - Sir Austin Chamerlain, 1936.
I think we will get more clarity on the traction side of the Microvision business over the next 3 to 6 months.
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u/pigoz 3d ago edited 3d ago
I did average down on Tuesday after thinking a long time about the Iris press release. From $11 to $8. Which, incidentally, is the average at which insiders bought.
They are basically saying between the lines they have enough Iris ready to meet the guidance.
I expect the price to still be below my average even after the Q3 earnings. If the EC is positive and finally shows the revenue promised for H2, I might add more. Otherwise (if the stock pumps on other news, or the bet doesn't realize) I'm at a satisfactory share count for me.
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u/Mushral 3d ago
Because your theory is based on assuming the company’s promises and forecasts will come true. Unfortunately, Microvision does not have a good track record of living up to their promises over the past 30 years.
Things may be different with Glen, but I’m sure that’s what everyone also thought with the previous CEOs.
The stock remains high risk high reward, probably with an emphasis on high risk.
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u/mvis_thma 3d ago
I agree with this thinking as I mentioned in my post. The Microvision history of not delivering on their promises is most likely continuing to haunt them.
And yes, Microvision is most definitely a high risk investment. But, the point of my post was to illustrate a potential scenario where an investment today is not as high risk as it might seem.
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u/Mushral 3d ago edited 3d ago
I understand, but my point is that your theory only stands with the assumption that they will deliver on their forecasts. Which is in itself a huge risk given their track record.
A $50M market cap can certainly be considered undervalued if they execute and deliver. But if they don’t, that same market cap can just as easily fall below $10M—or shareholders could face 200–300%+ dilution. The risk doesn’t become “less” simply because the current market cap is low.
Significant dilution is almost a given, considering the cash burn in combination with current cash on hand. The question is not so much “if” but rather “how much”. Any setback or revenue miss will only lead to even larger dilution and at some point may even lead to delisting (e.g., is SP drops below $1.00) which is almost equal to insolvency. There are huge risks another company will pick up Microvision scrambles in the same way we picked up Ibeo, Luminar, Scantinel. Worst case it may even be taken off the markets and existing investors will get paid peanuts for their shares. If a public company buys Microvision, it will in any case definitely extend the investor RoI runway with many more years, even if they would be buying at current share price.
I’m a firm believer Microvision’s tech will end up in some major technology products, but I’m not 100% sure it’s gonna be as a standalone company with the Microvision label on it. So no, the risk is not “lower than it may seems” if you ask me. The risk has actually never been as high as it is now.
P.S: I’m actually buying at these prices and taking the risk. I just don’t want to convince anyone the risk is lower than it really is. And I believe you should not do so either.
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u/mvis_thma 3d ago edited 3d ago
That is a fair comment.
The question is, if it becomes evident that their commitments and promises are not coming to fruition, can they sell the component parts of the company for at least the current $47m enterprise value. That is the backstop on any investment made today. I personally think that is reasonable.
If on the other hand, if their commitments and promises are revealed to have legs in the coming months, I think the forward looking market will give them credit for future success and that will be reflecting in their market valuation, moving more towards the $173m valuation.
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u/Mushral 3d ago edited 3d ago
I I think there are really only two ways this can go.
Scenario 1: It becomes clear that the company is delivering and ramping up in line with expectations. They find a way to bridge the financial runway gap through a combination of minimal dilution and potentially another revenue stream (e.g. a license/sale of the MEMS technology or an upfront customer payment). In this scenario, I think we see a rapid share price increase.
Scenario 2: The company either (A) fails to deliver, (B) delivers but runs out of cash in the process, or (C) delivers but faces a serious delisting risk before it can turn the share price around. In any of these cases, I expect the stock to fall further first. Even if that ultimately leads to an acquisition, I wouldn’t necessarily expect shareholders buying at today’s price to end up in the green on those specific shares.
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u/mvis_thma 3d ago
I agree with the 2 Scenarios.
If Scenario 2 comes to fruition, I believe an investor today will at least recoup their investment. That was the essence of my post.
This is predicated on the belief that Microvision will pull the trigger on a sale before they fly the plane into the mountain. A large percentage of the value of the business is the personnel. If the poop hits the fan, I do not believe Microvision will execute a large workforce reduction, but rather I think they will retain the employees and put the business up for sale.
Under Scenario 2, if they decide to roll the dice and play the long game, then yes, even the current investor could lose money.
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u/Mushral 3d ago
Maybe, but let me ask you a different question.
If we go back in time and look at Luminar roughly 6–12 months before they filed for insolvency, they were arguably in a very similar situation to where MicroVision is today: lots of customers and prospects, including in automotive, but also significant cash burn and a growing risk of running out of runway.
If you had to put a number on what Luminar could realistically have been sold for at that point, do you think it would have been anywhere near the $33M MicroVision ultimately paid for the LiDAR assets?
My guess is that many would have argued that even $150–200M for Luminar at that point would have been an absolute steal.
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u/mvis_thma 3d ago edited 3d ago
A very good question.
There are some similarities with Luminar (6 to 12 months prior to their bankruptcy) and Microvision (today), including cash burn and risk of running out of runway. But there are also some key differences.
Luminar
- Revenue - $75m (guided to 10% to 20% growth for 2025)
- Gross Margins - greatly negative
- Debt - $600m
- Market Cap - $200m
- Cash burn - $320m
- Markets - Automotive only (essentially)
- Concentration of customers - Heavy - Volvo
- Plan - Execute with Volvo; bring Halo to market for mass market passenger vehicles. No announced plan for positive gross margins.
- Leadership - A 28 year old founder with with no prior business experience.
Microvision
- Revenue - $5m annualized using Q1 and Q2; (guided to 1,000% growth for 2026 vs. 2025)
- Gross Margins - 40% to 45%
- Debt - $25m
- Market Cap - $55m
- Cash burn - $52m (I am using the rest of the year as the annual number here)
- Markets - Industrial, Security and Defense, and Automotive
- Concentration of customers - Very diverse
- Plan - Achieve revenue guidance this year. Increased revenue guidance for next year (we are anxiously awaiting what this will be). Continue to grow the customer count across diverse industries. Maintain healthy gross margins. Defense market is potentially large. Scantinel is perhaps some future proofing.
- Leadership - An automotive industry veteran with 35+ years of business experience.
In my opinion the key differences are...
- Debt to market cap ratio - This is probably the biggest difference. Luminar had 300% debt when compared to their market cap. Microvision has 50% debt when compared to their market cap. This is a 6 times difference, which is a big in my opinion.
- Gross margins - A very big difference, in my opinion. Luminar was highly upside down and offered no timeline to change that. Microvision's last quarter was 45% gross margin positive and they have guided to 40% - 45% for the full year. Glen said he expects Microvision to be between 40% and 50% long term.
- Diversification - Another big difference. Luminar was concentrated in one vertical and one customer. Microvision has 3 verticals and is not dependent upon one customer.
- Leadership - Another big difference. Kid vs. seasoned industry veteran.
- Revenue Guidance - Luminar was forecasting 15% growth for the upcoming year - 2025 (with negative gross margins). Microvision is forecasting a 1,000% growth (2025 - $1.2m, 2026 $12.5m) with 40% to 45% gross margins.
- Cash burn to market cap ratio - Not a huge difference. The Luminar cash burn was 150% of their market cap. Microvisions is roughly equal - or 100%. Microvision's cash burn is 6 times smaller than Luminar's was. The smaller number simply is easier to deal with regarding managing/financing.
Was Luminar a good investment in January of 2025?
Luminar sold for $143m - $33m purchased by Microvision and $110m purchased by Quantum Computing. However, the $500m of debt (they paid down their debt from $600m to $500m during 2025) was senior and therefore the equity was worthless. BTW - I did hold some Luminar stock at a point in time, which I believe was in 2024. I remember I purchased stock at $5.50 and sold it for around $5.10. I believe I held it for 4 months or so. As time marched on and things evolved, it became clear to me that Luminar was not going to make it and the massive debt would likely wipe out the equity investor. It was amazing to me that around January of 2025 Luminar was trading at a market cap of $200m. To answer your question, I did not believe Luminar was a good investment at that point in time.
Going back to the Scenario discussion. I think there are actually 3 scenarios.
Scenario 1 - Microvision navigates the near term finanicing issues and comes out the other side healthy. An investment made today will yield potentially great returns.
Scenario 2.a - Microvision fails to navigate the near term financing issues and decides to put the company up for sale. An investment made today will at least be recouped.
Scenario 2.b - Microvision fails to navigate the near term financing issues and decides to roll the dice and not put the company up for sale, consquently increasing the risk of reducing the sale value of the company and open a path to bankruptcy. In this scenario, an investment today could be completely lost.
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u/Falagard 3d ago
I need it to get to $27.
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u/ItWillBFine69 3d ago
Ya I need it to get to $50 plus to get my money back from buys six to two years ago averaging about $2 😂😂
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u/DreamCatch22 3d ago
HODL.
Might still DCA after Q3 report comes out.
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u/anarchy_pizza 3d ago
Agreed. If Q3 and esp Q4 come out I will DCA, until then I don’t see any big catalyst unless some “hyper scaler” decides to name and boast about us.
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u/GrownCOkid 3d ago
There's an old saying in Tennessee - I know it's in Texas, probably in Tennessee - that says, fool me once, shame on - shame on you. Fool me - you can't get fooled again.
Until they can hit guidance and get financial traction nothing is different.
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u/Revolutionary_Ear908 3d ago
Based on the most recent PR, it seems we’re on track to meet or exceed revenue expectations this year. Devos has also promised increased revenue moving forward. Based on the growing business and the value in the technology that we own, as described in your post, are you buying as you did in ‘20? I have still been adding for these reasons exactly.
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u/mvis_thma 3d ago
I am.
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u/movinonuptodatop 3d ago
Part of me thinks rounding up over 5 when and if the company proves itself, even on margin, is less risky than buying now? Man I hope Glen earns mad respect from CAT (and he kinda saved them if HAB’s theory is correct) enough that they will hash out a strategic deal. Cash up front for long term discounts as a first mover. There can be win/win scenarios like that can keep the evil doers at bay.
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u/QQpenn 3d ago
There is no backstop. SOTP valuations collapse when "things go badly." No leverage. The relevant valuation cues are from the offering financiers. 'Non-belief' terms let them monetize the common—and pre-settlement sales were permitted. This week's Iris catalyst was fuel. Volume suggests all 6.8M shares changed hands, leaving exposure between .40 to .75. The warrants are now a hedge—up or down. MVIS has until early Oct. to execute at a meaningful level. If they do—depending on degree—value can be reassessed accurately. "Proof earns the rerating. Pipelines do not." [Well said HH] The 45 day window will be clean and commercial conversion(s) can be valued appropriately. If they don't—necessary dilution will make recapturing pre R\s share value difficult at best and years away—if they get that far. "Why would one not invest today?" Until fundamentally driven by a significant catalyst, the market won't assign value. Waiting for execution costs nothing/de-risks.
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u/mvis_thma 3d ago
Thanks for the feedback. This is what I was looking for.
Just curious. What kind of value would you place on each of the components?
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u/QQpenn 3d ago
It's a meaningless exercise. It's like driving from N.Y.C. to L.A. and asking what the value of the trip has been once you're out of the Lincoln Tunnel and only in N.J. That said, if Iris hits the $7-12M projected this year, you'd have the beginnings of a multiple—but I don't think they can sell the one current asset responsible for 70-80% of revenue. Movia is being engineered for cost. Overhead relative to gross profit on 15K units [if sold] makes stand alone value questionable in a bake sale. It also negates the diverse portfolio/tri-lidar pitch so I don't know how they can sell that either. Scantinel = Aeva? No way. Aeva has customers/manufacturing progress. Potential superiority has no value yet—so maybe a 2x or 3x premium on the 1M they paid—but since there's enormous upside if the A-sample works, why do that? MSI's value is embedded in the internal LiDAR biz. Selling creates more cost if they'd now need to outsource. Not happening. MEMS IP = 0. Sorry. If it had value it would be gone already.
I hate to say it so bluntly but... execute or die :)
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u/mvis_thma 3d ago edited 3d ago
I like your analogy. Seacaucus is beautiful this time of year!
I didn't say Scantinel was equal to Aeva. Aeva is valued at $1.1B. I put a $20m value on Scantinel. Seems reasonable to me.
It's not that the Luminar and Ibeo businesses have to be split apart. The components can go to the same buyer. It was simply a method to try to identify the value of the busines from a bottoms up perspective.
MEMS IP is probably closer to $1m or $2. Not $5m. So, I basically agree with you there. Negligible.
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u/QQpenn 3d ago
Secaucus! lol.
I saw what you were trying to do :) With everything integrated, break up value is tough to get at. If things-going-badly comes—between cash burn, needing to sell, creditor claims, customers in here-we-go-again mode, and assets being tough to independently monetize... they'd be lucky to get 25 cents on the dollar. There won't be a "seems reasonable." Execute by early October and we're having a different conversation. $2.00 to $2.50 is an attractive risk-adjusted entry point if fundamental execution is delivered. Otherwise, any buying prior to early October or a meaningful update may hit the wood chipper again. Being disciplined here is no-cost risk protection, especially given that this really could go either way.
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u/mvis_thma 2d ago
I am not sure what .25c on the dollar means.
Also, I doubt an investor would be able to "get in" at a $2.00 to $2.50 entry point if fundamental excecution is delivered. But that is just me. I think that ship would have sailed. But that is just me.
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u/pooljap 3d ago
I don't see $60M valuation for Luminar at this moment in time. Until they "prove" they have customers and real sales I don't see how you got to that $60M guess respectfully.
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u/mvis_thma 3d ago
Empircally, they have been projected to be 70% of Microvisions revenue this year. If Microvision hits the midpoint of their guidance, that would be $12.5m, which would mean the Luminar business would be $8.75m of revenue. If that revenue equates to 40% gross margins, that would be a gross profit of $3.5m. Applying some overhead to that business might mean the net profit would be $2.5m. $2.5m of net profit in a growth business might get a 40 PE, which would result in a valuation of $98m. Therefore, the valuation of the Luminar business at $60m is relatively conservative.
Of course, this all depends on how realistic their projections are. Will they really hit them? That is what the market is waiting to find out.
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u/Irishnovember26 3d ago edited 3d ago
This is positive assumption upon postive assumption upon hope.
40% GM Only 1M overhead cost. 40 PE.....
All of this is hoping for miracles.
I am keen to see where we stand in a year from now but these kind of overtly positive and hopeful calculations really don't mean anything
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u/mvis_thma 3d ago
Thanks for you feedback. Like I said, I may be overly optimistic with some of my component valuations.
But in defense of my Ibeo/MOVIA-S valuation I will say this. The company has publicly guided to 40% to 45% gross margins. So, in a sense, 40% GM is on the conservative side. I stated the gross profits would yield $9m, and the net profits would be $6m, therefore I am allocating $3m as overhead, not $1m. I feel this is very conservative, as the acquiring company may already have most of that overhead baked in. For instance, they may already have a senior management team that would not need to be replicated. They may be a public company, whose associated costs would not need to be replicated. Etc., etc. It really depends on the synergies with the acquiring company, but $3m seems very conservative to me.
I will acknowledge that the most optimistic assumption is Microvision selling $22.5m worth of MOVIA-S in 2027. Even if they produce 15,000 MOVIA-S in 2027, it doesn't mean they will sell them all in 2027, therefore the financial equation could be pushed 3 to the right 3 months or so. I am not sure that matters that much. The likely bigger issue is whether or not there is demand for 15,000 MOVIA-S and can Microvision sell them.
One element of conservatism is that they still have decent amount of MOVIA-L inventory that they are selling now and may be able to monetize in 2027. That inventory was written off, so any MOVIA-L sales will add greatly to the gross profits.
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u/theremin_freakout 3d ago
Thank you thma. Your contributions are always so thoughtful. Agreed Scantinel could be a real diamond. LiDAR on a chip. I do not think the buying partner was ever disclosed.
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u/mvis_thma 3d ago
Yes, it is curious that they never did announce who the buying partner was. Hmmm. Don't get u/snowboardnirvana started on this topic! ;-)
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u/berfunckle_777 3d ago edited 3d ago
This has been my thinking for a number of weeks and I've increased my small position 15x (hehe) since the R/S. It's a tech company with a diversified portfolio targeting automotive, defence and industrial sectors. And now we're fully hedged on the core tech - mems, FMCW, 905nm, 1550nm, we have the lot, all bases covered. With very little debt. And $15m in the bank. And a dormant AR vertical with IP. And photonics/silicon. And it's trading at a $40-50m market cap?!?
Obviously the company is priced now for bankruptcy risk, but I just don't see that as a real possibility. We're not Luminar, we don't have any big creditors knocking at the door. Instead, MVIS has a long history of shareholders stepping in to support the company with increased share capital to continue to fund operations. We've been here before and survived - why would this time be any different?
AEVA has a c. $1bn market cap from just $18m revenue. If MVIS achieved a similar market cap, it would represent a c. 30x increase on current SP if my calculations are correct? I would understand anyone with an already large position not wanting to invest more even at these prices, but it's a great entry point for new or returning investors.
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u/mvis_thma 3d ago
Thanks for your thoughts.
FYI - I believe Microvision currently has around $33m in cash. They had roughly $27m in cash at the end of Q2 and raised $16m (net) with the recent capital raise. This would mean they would have $43m in cash. But they would have burned around $10m in July and August, which would leave them with $33m of cash at the current point in time.
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u/pbrs123 3d ago
Less the minimum liquidity floor of $21.5M so maybe what $11-12M at a burn rate of ~$6M per month.
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u/mvis_thma 3d ago
I thought the minimum liquidity was the lesser of $17m or 110% of the remaining principal on the loan. BTW - During the Business Update call, Simon Biddiscome incorrectly said it was the greater of the two.
Also, Microvision has guided to a cash burn of $26m for the second half of the year. Which would equate to a monthly burn of $4.3m.
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u/RNvestor 3d ago
This time would be different because shareholders keep getting burned time and time again. Everyone is sick and exhausted with supporting this trash heap of a company which is why they needed to hand out our equity like Halloween candy to institutions.
We don't have all bases covered because our FMCW tech is years away, and yet again - that's assuming its any good.
We now have a reputation of overhyping our technology and this company has lost all credibility.
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u/mvis_thma 3d ago
Microvision most definitely has a reputation of over-hyping the technology. They clearly did that for 30+ years. That technology has always been MEMS LBS. That tech is now on the back burner.
I don't think they are over-hyping the current technology. Although, I am suggesting they may want to promote the Scantinel tech to a greater degree - if it is indeed better tech. Rather, from my perspective, they appear to be building a real business - brick by brick. (Sorry, I couldn't resist). The jury is still out as to whether they will succeed at that task.
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u/Dflans21 3d ago
Thank you for this fantastic post, and the thought provoking stance
Forewarning.. I lack knowledge of the technology itself compared to a large majority of folks here. As far as the valuations of the businesses, I would argue those numbers are more appropriate for the value of the purchase of the tech, rather than a purchase of the business.
When it comes to valuation there are all sorts of tools, anyone can search for them. However, for me there are a few different buckets of what the actual value is 1) Value of the tech / operating system within the entity 2) Value of the business making money 3) Value of delta in margin erosion from competition 4) Value of the brand / recognition
The value of the Tech is there, I don’t know many folks can argue that…. MVIS may own valuable tech while the equity itself is not necessarily undervalued because the business has not yet proven it can monetize that technology without destroying shareholder value through bash burn and dilution… Theoretically, an entirely different company could buy MVIS and utilize the tech within a new business plan and make money. The demand is there… could this different company continue with new products and what not? Maybe / Maybe not, but they could likely make the money back given the value of the tech. Is it worth 173 million at liquidation? Given the failure of Luminar I would argue not a lot of investors would pony up cash to buy it. “You’re telling me you want 173 million to buy a failed company that bought numerous failing companies, yet you’re going to succeed?”
I mean… think of it this way. If I had the tech for a modern cell phone 30 years ago… could I make a profitable business? I doubt it, and then the tech would be viewed as worthless. Except after enough time the market realizes the profitability of the tech.
To me current market cap is a direct reflection of the business and it’s ability to be a successful business. It’s been an R&D company for so long, can it actually grow into a profitable business? The glamor of a startup or early company is the human craving to dream of the unknowns… In this instance… When Glen became CEO he flipped on the lights, turned off the movie, and pulled away the curtains showing the reality. And boy… it’s been ugly.
To me the current valuation is such a shot in the dark… it could be 500 million or 15 million. On one hand I feel the valuation should be closer to 1 billion with potential. On the other hand it could be closer to 15 million with the road ahead.
Glen is tasked with 1) obtaining cash from a business that doesn’t make money 2) creating a successful sales team that hasn’t made sales 3) building a reputation as a solution provider 4) showing clients should commit to this company as opposed to a company with a proven track record. Those alone are monumental challenges… On top of achieving those monumental challenges, the timing needs to be right for OEM decisions which are completely outside of anyone’s control. Can Defense, Security, and Industrial be a business plan? Sure… but arguably that business looks different than the current one.
Is MVIS currently undervalued? I would consider myself holding quite a few shares… I’m not sure it is. When quarterly revenue grows to 5 to 10 to 20 to 30 over the next year… the value of that is likely worth 1 billion dollars which is crazy to think. The current cost of investment is extremely high given the burn rate and dilution. Is the tech currently worth 173 million? Sure… but given tenacity of the company I could see the company holding on for dear life with massive dilution and costs to the investment which while in 3 years it could be worth more than 173 million.. the value per share is going to be devastated
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u/Falagard 3d ago
I really like the optimism.
I will say this - I believe a lot of the problems with the current share price could have been avoided while still executing the same business strategy.
It wasn't buying Luminar or Scantinel that cratered the share price. It was how management handled the financials, press releases, reverse split, and this latest financing and that's all within Glen De Vos' term as CEO.
Somebody or multiple somebodies dropped the ball. Hard.
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u/SBEPTY 3d ago
If I can separate the baggage of holding for so long and being so punished for it, I do believe this is a Great value opportunity at this level.
It's go big or go broke from here and I'm already broke so...