Several times during the annual stockholder meeting the words "ridiculous valuations" was used. Mentioned specifically was offer Steve Ballmer made for the LA Clippers -- apparently about three times the price that a basketball team should command.
So, a question: What would a "ridiculous" valuation for Microvision be?
LA Clippers + Steve Ballmer
So, a question: What would a "ridiculous" valuation for Microvision be?
LA Clippers + Steve Ballmer
WhatsApp --- valuation: $19 Billion
First, what did Facebook actually pay for WhatsApp?
Facebook ( FB ) announced that it will acquire mobile messaging app WhatsApp for a whopping $16 billion, out of which $12 billion will be funded through stock and the remaining through cash. The deal also includes another $3 billion in restricted stock units. -- From Nasdaq $16 billion + 3 billion = $19 billion.
It's WhatsApp's scale that CEO Mark Zuckerberg is focused on – he predicts it'll hit 1 billion users in just a few years—and he says it'll be key to his vision for "connecting the world"
WhatsApp already has a business model and is generating revenue. It's free for the first year, then charges 99 cents annually.
Free for the first year, then .99/year. In the world of the free internet, it's probably likely that a significant number of users will create a new account after a year, and use it the second year for free.
In April, they have about 500 million monthly active users. (That's a lot, no question.)
A billion users. $0.99/year/user -- that's their revenue model. -- that they'll all actually pay a dollar per year to use it is a large assumption.
Profit Margin: effectively 100%
Dubious Moat
Facebook ( FB ) announced that it will acquire mobile messaging app WhatsApp for a whopping $16 billion, out of which $12 billion will be funded through stock and the remaining through cash. The deal also includes another $3 billion in restricted stock units. -- From Nasdaq $16 billion + 3 billion = $19 billion.
- WhatsApp Revenue Model
- Forbes, "value for many"
- Understanding WhatsApp's $16 Billion Price Tag -- from CNBC
It's WhatsApp's scale that CEO Mark Zuckerberg is focused on – he predicts it'll hit 1 billion users in just a few years—and he says it'll be key to his vision for "connecting the world"
WhatsApp already has a business model and is generating revenue. It's free for the first year, then charges 99 cents annually.
Free for the first year, then .99/year. In the world of the free internet, it's probably likely that a significant number of users will create a new account after a year, and use it the second year for free.
In April, they have about 500 million monthly active users. (That's a lot, no question.)
A billion users. $0.99/year/user -- that's their revenue model. -- that they'll all actually pay a dollar per year to use it is a large assumption.
Profit Margin: effectively 100%
Dubious Moat
GoPro --- Market Cap $5.33 Billion
Sells cool cameras. No question.
Their product costs a lot to produce.
They have revenues, but they're still losing money.
Profit Margin: 5%
Moat is dubious
Groupon -- Market Cap $4.4 Billion
Loses money. (it shouldn't, but it does.)
Profit margin -- should be really high, but it isn't.
No Moat (If it's very difficult for someone else to duplicate your performance, you have a moat.)
Profit margin -- should be really high, but it isn't.
No Moat (If it's very difficult for someone else to duplicate your performance, you have a moat.)
Uber -- Valuation $17 Billion
CNBC on Uber Valuation
This is an interesting company, and there's some genius at work. They have a service that will likely give taxi services a run for their money. The concept could grow far beyond taxi services -- providing "nimble services" in other areas. What they don't have that Microvision owns is a huge moat. There isn't any way to provide a patent protection to this service, and to invest confidently in this, one would have to be confident that no one finds a better way to do the same job, or that there are few problems while riding with Uber. If the service continues, there eventually WILL be a fatal accident while riding with Uber, and how things fall out there will be interesting.
No Moat
Lots of risk
Profit Margin? Probably really high.
This is an interesting company, and there's some genius at work. They have a service that will likely give taxi services a run for their money. The concept could grow far beyond taxi services -- providing "nimble services" in other areas. What they don't have that Microvision owns is a huge moat. There isn't any way to provide a patent protection to this service, and to invest confidently in this, one would have to be confident that no one finds a better way to do the same job, or that there are few problems while riding with Uber. If the service continues, there eventually WILL be a fatal accident while riding with Uber, and how things fall out there will be interesting.
No Moat
Lots of risk
Profit Margin? Probably really high.
Comparing the companies:
Microvision has real value that exceeds these companies. No, they aren't selling product yet, but that is about to change with a vengeance.
Microvision has real products to sell/license. If you want the product, you have to go to them, you're not going to be able to build your own or find a replacement - or open a new account so you can get the product free.
Competition: All of the above mentioned companies can experience severe competition. At the moment they all enjoy being a kind of default choice, but each has considerable vulnerability. Creating new software is done all the time. In the case of GoPro, many companies are imitating them, coming up with smaller and more durable cameras. Microvision, on the other hand has a product, with very significant patent protection. Other companies are producing small projectors, that is true, but for those of us who have tried to see as much of the competition as possible -- the competition is lame by comparison. There is no comparison - Microvision outclasses them all.
Market potential:
All of the companies considered have world-wide market potential.
WhatsApp: a lot of people use texting, and they have a significant user base now. That's good. A whole lot of people in the financial world never heard about Whatsapp until Facebook made a bid for it.
GoPro: Their cameras are cool, no question. What percentage of the people in general need hardened cameras that work while they do crazy things? Not a high percentage.
Groupon: Sure this is an excellent service. They have the means to make money. The number of people who go out to eat on a regular basis is large, can they grow? Absolutely.
Uber: Another excellent service idea. However outside of urban areas, and away from large airports, taxi service isn't that common. This could make riding in other cars more common, and it could certainly grow.
Microvision: Nearly a billion smartphones are sold annually. Nearly every person on earth consumes media in the form of moving pictures. Microvision has a better, more portable and less expensive way to do this. (that uses significantly less power). Among the very large populations in urban areas where it is difficult to keep big things, Microvision can provide a gigantic screen experience, from a very small package. In rural & undeveloped areas where it's difficult to get power, and difficult to transport large fragile things, PicoP could make media available to people who are currently unable to get it. In suburban areas, teenagers want to carry this around, and will.
Look at the company and not the financials to make your decision. Which one is worth more?
Comparing Market Capitalization.
| Company | Market Cap | MVIS Price At that Market Cap |
| 19,000,000,000 | $441.86 | |
| GoPro | 5,330,000,000 | $123.95 |
| Groupon | 4,400,000,000 | $102.33 |
| Uber | 17,000,000,000 | $395.35 |
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