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Happy holidays and new year to all MVIS Blog readers.

Over the coming weeks, we will discover how Microvision will meet their truly extraordinary opportunities. I look forward to continuing to chronicle Microvision's transformation into a global technology juggernaut.

You heard it here first. This company is going to be huge.

Thanks for hanging with me for the last 20 months and helping to make MVIS Blog the #1 Independent Resource for MVIS Investors. This thing is going to break out sometime soon and never look back. I can feel it.

Have a great holiday and stay safe out there!


At December 22, 2005 at 4:16 AM Giulio said...

I'm sure you guys already saw this, but just in case... It looks like BBC's little Chistmas present to you ^__^

Happy holidays and new year everybody.

At December 22, 2005 at 4:21 AM Giulio said...

Forget about the previous post, old stuff, I misread the date...

Still have nice holidays and be serene... Good stuff does happen ^__^


At December 22, 2005 at 11:19 AM Anonymous said...

Here's a new Gilder/Burger update:
DECEMBER 20: 3.11, 52-WEEK RANGE: 3.02 - 7.70, MARKET CAP: 74.65M

DECEMBER 21, 2005
According to the GTR's Nick Tredennick, Microvision has been chronically short of money to exploit all of its opportunities. Perhaps it would be better to say that a Magellan management is drowning the company in too many untested waters. Microvision possesses the single most potent display technology in the industry, applicable now for head-up screens for fighter planes and luxury cars and automotive repair schematics. As Nick points out in the October GTR, head-up displays have bootstrapped the company to where it is today, but this is a slowly growing market with long lead times getting into consumer vehicles-meaning long-lead times to precious revenues.

The display technology is also hugely inviting for any company that wants a no-power "screen" for portable phone video or 3-D games or video telephony or cameras or you name it, and this in turn has invited the company to pursue too many difficult applications too early. For example, it is proving too hard to displace entrenched camera viewfinders with a version that requires camera redesign even with the promise of a vastly superior display. The goggles are purely speculative, according to Nick. With no assured market, Microvision simply cannot afford to spend money and engineering time on development and on prototypes. And 3-D is not as simple as projecting two nearly identical images with a slightly different perspective; it is compute intensive, so development might be expensive to get good results, Nick suspects.

One thing Microvision has not been short of is executives, and the current management needs to go on a diet in a hurry and become focused.

A $10m stopgap to the company's ongoing liquidity crisis came on December 1. In return, Microvision must pay $7m with interest in five quarterly installments beginning next March. Payment can be made in stock (at 10% discount to market over 20 days) or cash or combination thereof. In addition, just under a million shares were handed out to the investors, which at the time made up for the remaining $3m of the loan. Warrants were also issued to purchase an additional million shares at $3.94 during the next five years, but investors will likely wait for significant appreciation of the market cap before exercising. Taking into account liquid investments, notes payable in stock, and current cash burn, the funding gives Microvision a precious nine months of working capital…or less if forced to pay its quarterly tranches of about $1.5m in cash. That happens if the stock price doesn't reemerge above $3.65.

The latest funding, along with past converts and warrants and options and covenants and restrictions, is rattling around Microvision's books like dry bones which could be knit into a variety of animals. In a worst case scenario, up to 15m shares can be purchased with the outstanding options and warrants, which would relieve Microvision of mounds of debt while relieving shareholders of potential profits by diluting shares outstanding by almost two thirds. At the current price of $3.11, the company's enterprise value dwarfs sales over the past twelve months by 5.4x. A ratio of 1x sales, not untypical of a firm with Microvision's financial distresses, would mean a stock price of 46 cents. Thus we conclude that it would be better for investors to watch from the sidelines.

Microvision is an amazing innovator that may still be able to attract more funds for its unique and widely applicable technology or, alternatively, sell out to one of its customers. This is a very long-term opportunity, and if the company survives, there will be plenty of time to join the party.

-- Charlie Burger

At December 22, 2005 at 4:08 PM Ben said...

well, that's really something.

we'll see what happens.

At December 23, 2005 at 6:07 AM Anonymous said...

Interesting how GTR has been very bullish on MVIS in the past but now doesn't have a good opinion on them now.

What has changed since the last report? What do they know that we don't?

Have a nice holiday break everyone.


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