Liam Mulcahy and Microvision: Next Act
Posted June 27th, 2008 by Eric Cheshier
Mircovision shares are recovering after the secret Hedge fund employee Liam Mulcahy posted a negative article on SeekingAlpha.com against Microvision, Inc. (NASDAQ:MVIS). The damage has been done, so what can happen to Liam, and more importantly, what about MVIS shares?
After Liam and SeekingAlpha.com published the article, MVIS stock dropped 20% in the opening trading hours on Monday.
Seeking Alpha pulled the piece "pending investigation of claims of material inaccuracies." Here's a link to where the article used to be on SeekingAlpha.com
Seeking Alpha says on its site that its "editors have contact information for all contributors to enable ongoing communication regarding articles published." The site also says it edits articles for "quality and consistency."
In his article, Mulcahy wrote that a rival product made by Texas Instruments and Optoma is "available in mass quantities today" and said that the product had beaten Microvision's to market "by at least 6 months." But Optoma has said, as recently as last week, that its projector will be available only "in limited distribution" in Europe and Asia later this year and will have a "worldwide launch" in 2009.
Microvision, meanwhile, has said that it is targeting a release of a "commercial product" for the end of the year.
Mulcahy also wrote that the company faced a possible shortage of cash. Microvision has not indicated that is the case.
Matt Nichols, a Microvision spokesman, said there were "inaccuracies" in Mulcahy's comments.
But he said he was not looking to "engage" the writer, noting that, "I'm not even sure if it's a real individual."
However, Nichols said that he had contacted Seeking Alpha to alert the site that the article was not accurate.
"My assumption is it won't be back up," he said. "My big issue with them is, who is this individual? Are they real?"
So what could happen to Liam?
He could be found guilty of fraud and conspiracy to commit securities fraud, that is if they can find him, let alone put a real face to the name.
The maximum penalties for the criminal conspiracy charges are five years in prison and a $250,000 fine. Then if Liam did bank any coin from shorting MVIS shares, he would most likely forfeit the profits and any interest he made to the Securities and Exchange Commission (SEC).
Tracking down Liam could be difficult, even if they can get his IP Address, what if he was using a PC at a local library? Does SeekingAlpha.com track IP addresses when authors submit articles? Who knows?
SeekingAlpha would look like idiots and they might get a few less visitors, but that's about it for them. End of the Line.
Will the SEC really put any effort in to get to the bottom of this MVIS scare, or will it just be forgotten in a few weeks because Microvision is a small cap stock with only a $170 million market cap?
Even after today's bloodbath on Wall Street, Microvision shares are only down 12% since Friday.
So what could happen to MVIS shares?
Let's say they do get the story on Liam Mulcahy and it turns out he was manipulating the stock, bingo, shares could go back to Friday's price of $3.40 or higher.
It could be that Liam is on the money, and then the stock goes back down to Monday's bottom of $2.70 or more.
However, the most likely of odds is that the Liam Mulcahy story loses interest, because MVIS is not a high profile stock. Had this been Research in Motion (RIMM), Liam would have already been raided and brought down by a S.W.A.T. team in full raid gear. But this is only little Microvision, so expect this story to be last one you read about this debacle.
Give it a few more weeks and after everyone has moved on, so will MVIS shares, right back to $3.40.
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SeekingAlpha vs. Yahoo Message Board: No Difference
http://seekingalpha.com/article/82223-microvision-s-no-show-hands-the-pi...
The list of comments goes on and on. Some guy named JohnCarter goes on a great rant, here it is and he makes some great points:
You can say anything you like if you're willing to give up the
pretense of credibility (look at most Yahoo! posters), but if you want
people to take what you have to say seriously, then you need to be
able to back it up.
Apparently, Seeking Alpha has decided to jettison any credibility it
might have had in favor of becoming known as the outlet for
fantasy-based, unsubstantiated ranting. If the site decides to
republish the calculated lies of a basher without providing any
substantiation for the following claims, then in my opinion, the editors are negligent, because a brief amount of research on their part would have revealed:
The lie: "Texas Instruments just beat Microvision to the market (by at least 6 months)."
The truth: - Microvision and Texas Instruments both plan to introduce limited quantities of pico projectors late in 2008 with a ramp up in early 2009. Optoma's pico projector is not currently available for sale (notice that it doesn't even have a model number or a product name), so the company hasn't "beat" Microvision to the market at all, much less by six months.
The lie: "TI/Optoma solution is more than twice as bright as
Microvision's ... As far as color saturation the two devices are
essentially equal, but because TI's solution is twice as bright, the
image appear much more vivid."
The truth: Microvision's solution has 2.6 times the pixels of the
TI/Optoma solution. Both devices output 10 lumens of brightness, and the Microvision solution has 150% of the TI device's color range. The products are not even "essentially equal" - the Microvision device is clearly superior. Think DVD quality (Microvision) vs. VHS quality (TI/Optoma).
The lie: "Texas Instrument's solution is available in mass quantities
today"
The truth: Limited quantities will be available later this year. More
are planned to be produced next year - Microvision has announced the same schedule for releasing its device. What model number would I use to order the "mass quantities" that are available today? ...? ...that's what I thought.
The lie: "Our sources confirm what Detwiler was reporting on Friday.
Microvision has yet again delayed the original shipment date of the
`Show'"
The truth: Microvision's annual sharehold meeting was held on
Wednesday of this week, and representatives of the company reiterated their plans for bringing pico projector products to market in limited quantities before the end of this year with increased production during the first quarter of 2009. Apparently "Detwiler" missed that memo. Do you guys actually get paid for this kind of "research?"
The lie: "Texas Instruments is able to offer OEMs a viable roadmap to deliver massive quantities of brighter (2x-10x brighter) and cheaper pico projectors than Microvision could ever theoretically deliver with lasers."
The truth: The author gives no evidence to support any part of this
statement. Microvision's SHOW is a class 2 laser device - as safe as
any laser pointer, and probably safer than most business and home
theater projectors. Lasers that produce visible wavelengths of light,
which trigger the eye's blink reflex, are typically considered safe.
Unless Microvision is planning to release a product with an
ultraviolet laser (which no one could see), this isn't a real concern.
The lie: "Investors in Microvision need to see the light and realize
that the dream is rapidly becoming a nightmare."
The truth: Readers of Seeking Alpha need to "see the light" and
realize that this outlet has just reduced its credibility to the level
of an unmoderated Yahoo! message board.