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The meme stock hysteria which has gripped the market in recent months has certainly taken specific stocks on wild rides. Among the companies that have been gripped by retail mania has been Microvision (MVIS).
Investors should remember that MVIS stock hit its 52-week high of $28 in late-April. Since then, shares have waned to around $15 at the time of writing. Like other “meme” stocks, this sort of selloff isn’t out of the ordinary. (See Microvision stock charts on TipRanks)
However, retail investors are increasingly voicing their view that Microvision could be the latest short squeeze target.
Let’s dive into whether retail investors have the ability to move MVIS stock in a meaningful way.
Retail Investors Jumping Aboard MVIS Stock In a Big Way
MVIS stock is unique in that retail investors own the largest chunk of this company. The LIDAR-maker’s institutional ownership currently makes up roughly 20% of the total ownership of MVIS stock. This means the other 80% goes to retail investors, aka the average Joe.
Given the company’s relatively small market cap of $2.5 billion, and the company’s high short interest level around 18%, it’s no surprise this company has been targeted by retail investors of late.
Indeed, Microvision’s current makeup is similar to other meme stock plays. It’s got a relatively low price per share, low market cap, and retail investors own most of the float. That’s a recipe for a squeeze.
Catalysts Suggest Momentum Could Continue for Microvision
One of the key driving factors behind Microvision stock for long-term investors (not simply those looking to squeeze this stock) is the company’s business model. As a purveyor of high-tech LIDAR (light detecting and ranging systems), Microvision could become a key player in the automotive supply chain over time.
LIDAR has been touted as the next-generation tool necessary for autonomous driving. Indeed, this technology’s ability to send out millions of pulses of infrared light per second to detect objects and create a 3D map of an area is exactly what autonomous driving calls for. With companies like Tesla (TSLA) reportedly looking at LIDAR technology in the past, MVIS stock has surged amid investor interest in the potential this technology could provide.
Additionally, these LIDAR sensors have other interesting applications investors seem to like. The company’s PicoP scanning technology is currently being used in various high-tech products, spanning everything from portable projectors to augmented reality. These are high-growth areas investors are right to be focusing in on.
Another catalyst investors have pointed to as a reason to own Microvision is the company’s recent inclusion in the Russell 3000 Index. More capital flows into any stock is a good thing. Indeed, MVIS investors are hopeful these capital inflows from institutional investors will bolster already bullish buying from the retail crowd.
What Analysts Are Saying About MVIS Stock
According to TipRanks’ analyst rating consensus, MVIS stock comes in as a Hold. Out of 1 analyst rating, there is 1 Hold recommendation.
Microvision is a trendy stock with a strong retail following right now. Among the stocks that could potentially squeeze, MVIS stock is certainly up there.
However, the likelihood of such a squeeze is unknown. Indeed, investors seem to like the technology underpinning this company. If Microvision is able to commercialize its product and eventually become profitable (which is a big bone of contention among bears), this is a stock that could fly.
That said, there remain a number of risks with this stock on the financial side that investors should be wary of. This is a company that’s been around for more than two decades and hasn’t yet made money. There is good reason that such stocks tend to fall off of the radar for long-term investors.
Disclosure: Chris MacDonald held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.