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Why MicroVision Stock Crashed 31% in April

By Chris Neiger - Updated May 4, 2022 at 4:56PM

Key Points

  • The stock began falling after MicroVision announced a new board member.
  • A portion of last month's decline might be due to the broader market falling in April.
  • Investors appeared to ignore the company's disappointing first-quarter results.

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Investors dumped their shares on little news and seemingly ignored the bigger picture.

What happened

Shares of MicroVision (MVIS -3.29%) plummeted 30.8% last month, according to data provided by S&P Global Market Intelligence. MicroVision is a so-called meme stock that has attracted attention from speculative stock traders talking about it on Reddit investing message boards. 

The tech stock cratered in April as investors processed several bits of news, including MicroVision adding a new board member, and as the overall market experienced a significant drop.

So what 

Some of MicroVision's share price declines in April could be attributed to the S&P 500 sliding nearly 9% during the month. Investors were fleeing growth stocks in April, including many tech stocks, as they anticipated a Federal Reserve interest rate hike at the Fed's May meeting. 

A white arrow pointing down on a red background.

Image source: Getty Images.

The Federal Reserve ended up proving investors' concerns right when it raised the Federal Funds rate by 50 basis points on May 3. 

But MicroVision investors also reacted strongly to the news that the company was adding Jeffrey Herbst to its board of directors. Herbst spent 20 years working at Nvidia, and MicroVision's management said his experience is "highly relevant and valuable as we optimize MicroVision's position in the [advanced driver-assist systems] market and continue to execute our strategy." 

Apparently, investors weren't happy with the move, and MicroVision's stock began falling following the announcement. 

Now what

As a meme stock, MicroVision's shares have been extremely volatile, sometimes on little or no news, and over the past 12 months its share price has fallen 71%. 

In the company's most recent quarter, reported on April 27, total sales fell 20% from the year-ago quarter to $400,000. Additionally, the company's net loss of $0.08 per share was worse than the $0.04 loss in the first quarter of 2021. 

Oddly enough, after the company's poor first-quarter results were released, its share price barely budged. That could be yet another indicator that some MicroVision investors aren't exactly interested in how the company actually makes money, and instead are betting on it based on pure speculation. 

 

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