Why MicroVision Shares Crashed in October

Shares of MicroVision (NASDAQ: MVIS) fell 31.1% in October 2021, according to data from S&P Global Market Intelligence. The maker of laser-beam scanner sensors for self-driving cars and 3D sensing systems took a big hit from disappointing earnings near the end of October, but the downward trend started much earlier.

MicroVision reported a net loss of $9.4 million and negative operating cash flow of $10.0 million in the third quarter, all based on top-line revenues of just $718,000. The company is burning through a lot of cash with no significant source of incoming revenues. Investors hope that MicroVision will become a preferred provider of light detection and ranging (LiDAR) systems for self-driving cars, but there are no firm deals in place, and the marketplace is packed with plenty of competition.

The path to future profits and revenue gains is so murky that CEO Sumit Sharma treated "a number of requests for additional information and proposals" as a big win in the third quarter. At the same time, he indicated that meaningful sales are at least four years away. Investors were less enthusiastic, and the stock closed 15% lower the next day.

Source Fool.com