June 23, 2008
Knobias Clip Report (06-23-2008)
By admin
Submitted By Knobias ClipReport
MVIS: Shares Fall on Seeking Alpha Blog Post; Company Responds
Monday’s session saw energy gain again while the market, expectedly sold off on the news. In aftermarket news, UPS cut their guidance on the surmise that increased fuel costs have resulted in lower than expected US package volume. Shares were down over 4% afterhours. In M&A news, Bunge announced the purchase of Corn Products in an all stock deal valued at $4.4B. The merger makes Bunge a net buyer of corn and with the weather in the Midwest, corn has become one of the largest gainers in the commodity sector. Shares of Bunge were down heavily on the news.
In the financial area, the entire sector continued its downward slide. The XLF was only marginally above a 5 year low. Goldman downgraded the sector to Underweight from Neutral while the Wall Street Journal suggested that large investors were becoming increasingly skittish on pouring more money into the banks.
In the alternate energy front, many solars saw gains while others were only marginally down on the up day in crude. Presidential hopefully, John McCain announced one of his ideas on the energy crisis. McCain reported that he would push for a $5,000 tax credit on consumers who buy and drive zero emission vehicles. Also being brought to the table was higher fines for automakers who evade fuel efficiency standards and speeding up the process of converting engines to alcohol based fuels. Democratic hopful, Barack Obama countered with a clampdown on energy speculation which he believes is largely responsible for high oil prices.
In the small cap space, one name saw a surprising decline caused by what the Company called, ‘enormous inaccucuracies’. Microvision, Inc. (MVIS) is a technology Company focused on the miniature display and imaging engines based on integrated photonics module technology platform. In layman’s terms, the Company is developing a small projector to be incorporated into handheld devices to display photos, movies, or presentations.
A blog post on Seeking Alpha had many investors up in arms over the information provided by the author who disclosed he works for a hedge fund that is short the stock. According to the poster, MVIS will delay their shipment date and will reportedly be beat to the market by a Texas Instruments product. The poster also speculates that MVIS will have to raise cash in the coming quarter at terms made by new investors since the Company has failed to produce the device in time.
Following the blog’s posting, shares fell from Friday’s close of $3.41 to lows of $2.70 before rebounding somewhat after the Company responded. According to a Fly on the Wall report who quoted the Company’s Director of Communications, Matt Nichols, the post had ‘enormous inaccuracies’ and the Company was in the process of meeting milestones of limited introductions in 2008 with large volume production in 2009. Following that report, shares bounced off lows and closed at $3.01, down over 11% on the day.
With so much interest in the post, its possible inaccuracies, and the impact it had on the name, it’s certainly something investors would be wise to follow over the coming days. Investors would be wise to watch.
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