As a self-professed cynic of all things investing and market related, I wanted to share an observation I made over the past couple days related to a small-cap, publicly traded company called Microvision (NASDAQ: MVIS). Firstly, this post is not about the merits of Microvision as an investment. I have no clue whatsoever whether this company is destined for bankruptcy or if it’s the next Intel, nor will I attempt to derive one in this post. The reason this tiny company blipped on my radar is because over the past two days the share price of this company more than doubled, with each day’s volume equaling essentially the entirety of its float. All this presumably because of Sony’s same-day announcement of it developing products based on Microvision’s technology.
What interested me more than its abnormal share price behavior, however, was the behavior of someone who claims to “work for a long/short equity hedge fund” going by the name of Liam Mulcahy. Microvision’s stock closed up around +98% on February 20th, 2014, and the day after Mr. Mulcahy releases an article on SeekingAlpha proclaiming that it is “still a short” with all the conviction he can muster.
Ok, fine. Lets give Mr. Mulcahy the benefit of the doubt for a moment and say he is simply a concerned investor trying to do the world a public service by saving us from this company’s doomed-to-fail technology that somehow only he, but not the global electronics behemoth known as Sony, understands. Surely then he must have written and contributed much in the way of previous articles such that all of us, the investment community in general, could benefit from his keen insight.
Not really. According to his SeekingAlpha profile (screenshots to the right in case someone decides to change/delete this profile in the future) Mr. Mulcahy has only written six total articles dating back to 2007. Or in other words, Mr. Mulcahy has averaged about one article on SeekingAlpha a year. What caught my eye, however, was that Microvision was the subject of another of these articles, written on June 22, 2008, where Mr. Mulcahy claims that Microvision is basically dead in the water. Interestingly enough, the article was published a day after a major move in Microvision to the downside. Also interesting was that the article was eventually removed by SeekingAlpha editors due to a failure on Mr. Mulcahy’s part to respond.
So who is Liam Mulcahy? Nobody seems to know, and whoever he is, he makes it pretty difficult to find out using the standard channels people all over the world use to stalk each other. His profile picture on SeekingAlpha is a pint of Guinness beer. A look-see on LinkedIn’s public directory of people named Liam Mulcahy doesn’t reveal anybody who works for a long/short equity hedge fund. One would think that somebody with the ambition to secure a position in a hedge fund would have a nicely filled-out LinkedIn profile complete with the requisite endorsements, relevant experience and such.
At the end of the day, this post isn’t about debating whether what Mr. Mulcahy says about Microvision is true or not, and whether that portends poor performance of Microvision stock going forward. His claims may very well be true. Rather, my goal is to point out the conspiracy-theory-like weirdness that goes on in capital markets. Here, we basically have a mysterious author purporting to work for a long/short equity hedge fund who rarely ever posts, but when he does, has a penchant to post negative articles on a particular small-cap stock that nobody really seems to care much about the day after majorly volatile days dating back at least seven years. I highly doubt this character’s motives, whatever they may be, are pure.
Instead, I choose to take this as a lesson that the investing world is not filled with information-sharing do-gooders who are simply trying to make the world a better place. There are plenty of “contributors” out there with ulterior motives behind their “analysis” with anything but your brokerage account’s value in mind.
Is this the case with Mr. Mulcahy? I can’t say for sure, but all signs (to me) point to yes. Perhaps he does work for a hedge fund with a large short position on Microvision and therefore tries to bias its price downwards any way he can as a course of business in maximizing fund performance. Perhaps he is a gun-for-hire, paid for by a deep-pocketed Microvision competitor in order to spread lies and disinformation because maybe Microvision is the next Intel and is developing truly disruptive technology that would put them out of business. Who knows?
The morale of the story is, and especially with small-cap stocks, such nefarious characters are unfortunate realities of the investing world. Never take anything at face value because finding commentary and/or research that isn’t biased in one way or another is not only difficult to find, but difficult to recognize as well. Try to make the most informed, educated decisions you can when it comes to your money, and in my experience, a big part of that is viewing everything with a healthy dose of cynicism.