MicroVision, Inc. (NASDAQ: MVIS) is headed for the top for the second consecutive session. However, if you’re looking for press releases or SEC filings that may be the catalyst for the move, you’re not going to find much.
Here’s what’s going on:
Retail Investors Work To Squeeze Shorts
MicroVision has been a hot topic of conversation on the Wall Street Bets Reddit for some time, and for good reason. The group at Wall Street Bets has been consistently looking for targets that institutional investors have been heavily shorting in an attempt to push for short squeezes, sending the hedge funds for losses and giving them a taste of their own medicine.
Well, MicroVision stock falls right into that category.
At the moment, the stock is trading with short interest around 28%, which is well above the 20% threshold that I look for when looking for short squeeze opportunities with dramatic potential.
And I’m not the only person that noticed.
As mentioned above, the conversation surrounding MicroVision on Wall Street Bets and other social platforms has been heating up. Those taking part in the conversation are consistently pointing to the hefty short interest on the stock, and the opportunity this short interest can create.
So, 20% gains yesterday followed by strong movement in the upward direction in the premarket this morning are not surprising.
In fact, based on the heavy short interest and the extreme popularity the stock is achieving on social networks and message boards, the gains could be very far from over.
Beyond The Short Squeeze
Beyond the short squeeze, MicroVision stock may prove to be a great long-term opportunity. The company’s claim to fame is its lidar systems which are used to capture and compute 3D images for self-driving, augmented reality, and other technologies.
The company has become an integral player in Oculus as its technologies are used in Microsoft’s headsets. Moreover, the company’s technology has been used by the military and other high-level customers.
Moving beyond the short squeeze, there’s strong potential for a takeover here. There are several companies that would benefit greatly from this tech. For example, Microsoft is already using the technology, and months ago, hired multiple members of the MicroVision team. At the same time, the company’s competitors like Apple, Google, and several others would benefit greatly from taking the company over.
No matter how you slice it, MVIS is a great takeover target.
All in all, MicroVision stock is an exciting one to watch. While institutions may be turning their backs on the stock, retail investors are pushing those with short positions out. Although they’ve done a great job of that through yesterday’s trading session, with gains continuing today, what we’re seeing is likely the tip of the iceberg. With such heavy short interest here, the stock could see gains in multiples ahead.
Beyond that, there’s a strong argument that MicroVision is the perfect takeover target, with Microsoft being the most likely suitor. While there’s no information from either MVIS or those who would benefit from taking the company over, there’s a strong chance that the company will see a takeover offer at some point.
All told, MicroVision stock is one for the watchlist.