MicroVision (NASDAQ:MVIS) stock fell hard overnight after it announced a $75 million common stock offering.
Underwriters have an option of buying up to $11.75 million more shares in the offering statement.
The news dropped the company’s market capitalization to barely $1 billion after revenue of less than $1 million in 2022 and $782,000 in the first quarter. MVIS stock is down over 15% this morning.
MVIS Stock: An AI Play?
MVIS stock rose over 200% in June after it was deemed an artificial intelligence (AI) play. The company is best known for driver assistance systems used in cars, including Lidar.
The company is also benefitting from a short squeeze. MicroVision lost nearly $19 million in the first quarter and $57 million in 2022. The new stock sale will represent more than a year of losses for the company, allowing it to continue operating until 2025.
Even with its recent gains, MicroVision stock is selling for 71% less than it did at its height in 2020 when excitement over self-driving cars was at a peak. Several institutions had bought MVIS shares while it was selling off at the end of last year, however.
While Microvision has not been prospering, the Lidar market has been growing at 24% per year, with North America representing 40% of the market. Lidar systems are used in mapping and disaster management as well as in cars. There are nearly a dozen competitors to MicroVision in this market, including Luminar (NASDAQ:LAZR) and Velodyne (NASDAQ:VLDR). Luminar CEO Austin Russell recently made news by taking a majority stake in Forbes magazine.
Self-driving systems have been taking media heat lately, with Tesla’s (NASDAQ:TSLA) autopilot system implicated in 739 crashes since 2019. An Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) Waymo car killed a dog in an “unavoidable” accident just a few days ago. Tesla recently said it will be putting more emphasis on radar than Lidar in the future.
What Happens Next?
All Lidar companies, including MicroVision, are under pressure to deliver sales. The market seems to see the latest stock sale to be an opportunistic reaction to a short squeeze.
On the date of publication, Dana Blankenhorn held a LONG position in GOOGL stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
