MVIS Stock: Will Ford Acquire MicroVision?

MicroVision, Inc. (NASDAQ: MVIS) is screaming for the top in the market this morning, following up on the recent gains seen out of the stock. The gains seem to be the result of investor speculation that a buyout is on the horizon. 

Recent news broke suggesting the buyer in the acquisition will be Ford Motor Company (NYSE: F). Here’s what’s going on:

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MicroVision’s Strategic Alternatives Exploration

The COVID-19 pandemic has been a harsh reality for everyone, whether it be consumers, businesses, or government agencies. Unfortunately, MicroVision was not immune to the pain associated with the pandemic. 

In fact, earlier this year, investors learned that the pandemic-related financial pains had put MVIS in a tough position. As a result, the company announced that it would be moving forward with a strategic alternatives exploration earlier this year. 

For those of you who haven’t followed a strategic alternatives exploration in the past, the biggest thing you need to know is the options. Ultimately, in order to resolve its balance sheet blues, MicroVision needs to bring money through the doors. This will likely happen in one of four ways:

  1. Acquisition. The first option, and likely the option management is working most toward, is the potential acquisition of MVIS by a large company. The acquisition makes sense. As a leader in Lidar and other tech, there are several companies, especially in the autonomous vehicles space, that would benefit greatly from acquiring the company. Of course, an acquisition would be great for investors as it will likely take place at an incredible premium, returning immediate value to investors. 
  2. Asset Sale. If, for any reason, MicroVision is unable to sell itself as a whole, the next step in the exploration would be to attempt to sell high value assets. In this case, MVIS would not be acquired, but it may sell rights to its Lidar technology and other technology to the highest bidder. 
  3. Fundraise. If none of the two options above are achieved, the company will still have a desperate need for funding. As such, it may look to capital markets for fundraising opportunities. 
  4. Bankruptcy. Finally, bankruptcy is never an option investors want to consider, but when a company moves forward with a strategic alternatives exploration, it is in a tough spot. Should that exploration not lead to a deal the results in funding, the company may be forced to file bankruptcy in a last-ditch effort to protect itself and its investors. 

Evidence That Ford Motor Company May Be the Suitor

The good news is that at this stage, a MicroVision bankruptcy is all-but off the table. Ultimately, the company’s technologies are used in various applications, including military applications. As such, the revenue potential of these technologies is incredible. 

As such, there’s a strong chance that either the company will be acquired, or that a large player will buy at least one high value asset, pulling MVIS out of the hole it’s found itself in. 

About two weeks ago, news broke suggesting that the suitor may be Ford Motor Company, and the evidence is building the further we get from the announcement. 

On December 1, 2020, MVIS stock found its way upward after the company announced that Judy Curran had been appointed to its Board of Directors. 

So, who’s Judy Curran and why does her appointment matter?

Judy Curran is a well-known senior automotive executive. In fact, she has served in executive positions at Ford Motor Company for some time. While her role at Ford came with various responsibilities, a few very important responsibilities include the development of assisted driving, infotainment, connectivity, and new electrical architectures. 

Essentially, when Ford wanted to develop better self-driving technologies, or better consumer-facing technologies in a vehicle, Curran played a major role. 

Across message boards, investors have been suggesting that Curran still works at Ford. While she left her position at Ford two years ago, the connection is important. There’s no doubt that Curran has friends that serve as executives at Ford, and as a member of the MVIS board, she will likely be pushing Ford to buyout the company.

All in all, this is yet another source of evidence that a big deal may be on the horizon. 

Risks to Consider Before Buying MVIS Stock

The idea that MicroVision may soon be acquired, or announce a major asset sale that returns tremendous value to investors, is exciting. So, it’s not surprising to see that so many people have been jumping into the stock recently. 

Nonetheless, there’s no such thing as an investment without risk. When it comes to MVIS, the most significant risks to consider before buying stock include:

  • A Deal Is Very Important. Ultimately, it’s incredibly important for the success of an investment in MicroVision that a deal takes place, whether it be an asset sale or an acquisition. However, we’re in the dark, we can only speculate about a potential deal. If one doesn’t take place, significant declines could be the result. 
  • Capital Risk. The fact that MicroVision is in the process of a strategic alternatives exploration tells investors that there are capital risks to consider here. If a deal is not met, the company may tap into capital markets to raise funds. If this is the case, the result will be dilution for existing shareholders. 
  • Bankruptcy Risk. Bankruptcy is rarely a good thing for a publicly traded company or its investors. Nonetheless, if MVIS is unable to establish a deal, or raise funds through the sale of stock, it will likely find itself in United States Bankruptcy Court, which again, would lead to significant losses. 

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Final Thoughts

It’s important that I always outline the risks for my readers. However, if you want my honest opinion as to what’s going to happen, I believe that we will see an acquisition of all outstanding shares of MVIS stock. 

The fact of the matter is that autonomous driving is the hottest thing on the market today, and the race to effective autonomous driving options is on. With the company’s activity in the space, and ownership of key technologies that can give the big guys a boost over their competition, I would be surprised if a deal didn’t happen. 

Nonetheless, I can’t see into the future, and as a human being, I’ve been wrong before. Nonetheless, I strongly believe that a deal is likely on the horizon. As such, MVIS stock is one that’s hard to ignore.