Thursday, June 30, 2016

Linked In, Brexit and Microvision

Of course, the conventional wisdom says that all of the fundamentals are priced into the stock and the charts predict the future. That if the price of the stock isn't going up the company isn't ready.

That may be the conventional wisdom, but recent events prove that the conventional wisdom is often wrong.

The Graph just below shows the probability of a "stay" vote over time. All the talking heads on television said "of course they'll vote to stay" people weren't even concerned about Britain leaving the EU. From BullionVault

What happened? What everyone knew for sure because of polling and "markets" turned out to be wrong. Yes, that's a better than 80% chance of "Stay" to 100% go when the vote was in.

Oh, and then there's the "you can't keep that quiet" camp. Everyone will squeal and the results will show up in the stock price before we get there. 

When it's really important, corporate secrecy can be incredibly powerful. The moves aren't telegraphed in the stock.

The best example of that in recent history is LinkedIn. Were you paying attention to it in the last year? Check out the chart: (From Finviz)

So, back in February, someone was pretty quiet about something, because they came out with news that cut the stock almost in half. Then earlier this month people who knew stuff were pretty quiet, because the stock then nearly doubled over night.

UPDATE:  And -- They had more suitors than we thought (recode) Facebook and Google also looked into buying them.

No matter what you may think of Microvision stock right now -- I know it's frustrating because I'm in it too -- they are purveyors of a cutting-edge technology, that is going to enable screens everywhere, and everyone wants portable, and everyone likes big screens -- and those things are incompatible unless you're using Microvision's tech. 

So, the stock is down right now. As the company is reporting an end to production troubles and new products are on the way --- and smartphone producers are calling the color blue a cool new feature.

It's going to be fantastic. Every bit of real and imagined and potential bad news is priced into the stock -- but the good news is not. 

No comments:

Post a Comment