Please ensure Javascript is enabled for purposes of website accessibility

Why MicroVision Stock Dropped 13% This Morning

By Rich Smith – Jun 23, 2020 at 11:37AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What went up (yesterday) just came back down (today).

What happened

Investors in miniaturized digital imaging sensor-maker MicroVision (MVIS -6.33%) had a good day yesterday -- but are having a pretty bad day today. As of 12:15 p.m. EDT, MicroVision's share price has fallen 7.5%.

On Monday, MicroVision CEO Sumit Sharma was happy to announce that, with MicroVision's share price firmly back above the $1 level required to maintain a listing on the Nasdaq, MicroVision had "regained compliance" with the exchange's listing requirements and was no longer in any immediate danger of being delisted.  

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

That happy news helped to drive up MicroVision's stock price nearly 17% in Monday trading. But here's the thing:

The Nasdaq listing news was the only good news affecting MicroVision's stock price yesterday and, now that the initial wave of enthusiasm has passed, investors are taking a pause for a reality check. And they're rolling back the stock's share price. 

At a share price of just $1.61, MicroVision is now just $0.61 away from becoming an official penny stock once again, at which point the danger of being delisted will reemerge.

Now what

Planning ahead for that eventuality, management says it will "monitor the situation to determine if there is a need to effect a reverse stock split during the 90-day period authorized by shareholders on May 19, 2020." Should it be necessary to reverse split (i.e., to merge shares of a MicroVision trading for less than $1, so that the shares that remain carry a price tag of more than $1), investors will likely interpret that as meaning there's no hope of MicroVision earning a higher valuation.

Suffice it to say that lack of hope is not a good thing for a stock's price, and this is why MicroVision shares are declining today.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

MicroVision, Inc. Stock Quote
MicroVision, Inc.
$3.55 (-6.33%) $0.24

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.