Short interest data can help investors avoid large losses. Quite often, heavily-shorted stocks underperform.
In this report, we are going to look at the short interest data on MicroVision Inc (MVIS:US). MicroVision is a US company that develops laser beam scanning technology. Its technology is used for autonomous vehicles as well as non-automotive applications. The company is listed on the Nasdaq and currently has a market cap of around $743.1 million.
High Short Interest
Short sellers have had success with this stock in the past.
Back in April 2021, we noted that MicroVision had short interest of 26%. At the time, the share price was around $15. Today, however, it is near $4.2. So, shorters will have generated substantial profits from this stock.
The short sellers are still betting against the stock today though. At present, 49.8 million MVIS shares are on loan. That represents roughly 28.2% of the free float. Utilization is high at 77% and the cost to borrow stock is elevated at 23.6%.
This data suggests that the short sellers expect the stock to continue falling going forward.
It is most likely the company’s valuation that the short sellers are focused on here.
This year, analysts expect MicroVision to generate revenue of just $12 million. So, at its current market cap of $773 million, the company’s price-to-sales ratio is 64. That’s a very high multiple.
It’s worth noting that revenue for Q1 was just $0.8 million. So, the company may not even reach $12 million for the year.
The short sellers could also be focused on MicroVision's lack of profits and cash flow, however. For Q1, the company generated a net loss of $19.0 million while cash used in operations was $13.8 million.
The company ended the quarter with cash of $67.7 million which suggests that it could have to raise capital at some stage in the future.
Given the high level of short interest here, we think investors should approach this stock with caution. Generally speaking, it’s not smart to bet against the short sellers.