What happened
MicroVision (MVIS 5.63%) shareholders endured a volatile trading week this week that ultimately led to negative returns. Shares of the computer vision tech specialist were down 25% through Thursday trading, according to data provided by S&P Global Market Intelligence. The wider market rallied nearly 3% in that time. Yet MicroVision is still up by over 100% so far in 2023 compared to a 15% spike in the S&P 500.
This week's drop came as the company announced -- and then withdrew -- plans to raise capital through a new public stock offering.
So what
The offering news arrived on Tuesday, and initially sent shares lower. MicroVision said in that announcement that it was aiming to raise roughly $75 million by issuing more stock. The offering made sense given that shares have jumped so far in 2023 even as interest rates have risen. Still, Wall Street reacted to the prospect of dilution by sending the stock lower.
Shares rebounded after the company quickly changed its tune. MicroVision announced on Wednesday evening that it will withdraw the proposed offering and look for other ways to raise cash. Management was clear in a statement that the shift was a direct response to the stock's swinging price. "Given the market volatility and recent stock price performance, we intend to explore other capital raising opportunities," CEO Sumit Sharma said.
Now what
It is positive news for existing shareholders that MicroVision isn't planning to dilute their investments by issuing more stock. On the other hand, investors shouldn't be pleased to see management reacting to stock price moves and changing strategies in the space of just a few days.
Ultimately, this week's performance highlights the fact that MicroVision remains a highly volatile stock, partly due to its tiny sales footprint, and partly due to intense short-term trader interest. Most investors will want to steer clear of these types of highly speculative investments in favor of more established growth stocks.
