Why This Penny Stock Is Up 134% Today

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Microvision Inc. (Nasdaq: MVIS) stock soared 134% today (Thursday) on news that Sony Corp. (NYSE: SNE) will be using the laser-display technology developed by Microvision in its newest projector module.

The hallmark of Sony's new "pico projector" module is its size - it can fit in the user's pocket.

By combining the tiny projector module with Wi-Fi and a battery, Sony claims that images and video can be projected from common tech products like smartphones and tablets. The projector also boasts resolution of 1920 x 720, compared to current Sony models that offer resolution of 800 x 480.

Another point of emphasis for Sony is that the new projector will be "focus-free." According to Sony, the picture will be clear regardless of the distance or angle of the projection. This also allows user to display images on both flat and curved surfaces more easily. 

Sep 23 04:06 PM
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Price: 1.88 | Ch: 0.01 (0.3%)

Microvision's patented MEMS (Micro Electro Mechanical Systems) mirror is at the heart of the projector. Images are created when lasers of various lights are bounced off the MEMS mirror inside of the device and projected onto the display surface. 

When investors heard that Microvision's patented technology is key to Sony's newest device, shares soared and the stock's price more than doubled.

MVIS stock closed Wednesday at $1.35 and by midafternoon Thursday had reached $3.16. At that point investors had captured a one-day gain of 134%.

But triple-digits gains for stocks like MVIS aren't uncommon. Like all penny stocks, shares of Microvision are inexpensive. While MVIS stock shot up 134%, it really added just $1.81 per share.

Penny stocks also are more illiquid than traditional stocks, meaning they cannot be traded as easily. While this can be problematic when investors are trying to sell, it also means that the value of an illiquid stock can inflate much faster than other stocks when there is demand.

This is why Microvision is just the latest penny stock in 2014 to post monster one-day gains. Just take a look at this penny stocks list of big movers this year.  

Penny Stocks with Huge Gains in 2014

On Jan. 15, shares of Chelsea Therapeutics (Nasdaq: CHTP) jumped 120% when its blood pressure drug Northera was deemed by an independent panel to be effective enough to warrant regulatory approval.

CHTP's drug hadn't even faced FDA approval at that point, but the good news was still enough for the stock price to double.

On Feb. 14, Synthesis Energy Systems Inc. (Nasdaq: SYMX) watched its stock soar 81% to $2.59 from a previous day close of $1.43.

That followed news that SYMX had partnered with Zhangjiagang Chemical Machinery to become a market leader in clean coal gasification in China. More than 8 million shares of SYMX were traded that day, compared to its average daily volume of 482,000.

Also on Feb. 14, Qualstar Corp. (Nasdaq: QBAK) shares bolted 40% higher after the manufacturer of data storage and high-efficiency power supplies reported significantly all-around improved results for its second fiscal quarter ended Dec. 31. Revenue rose 57% to $3.4 million, up from $2.2 million quarter over quarter.

Predicting which penny stocks will take off is a tough proposition, and there are numerous pitfalls investors must be aware of. But for penny stock investors, the risks and challenges are often worth the reward.

Are you a penny stock investor? Tell us what you think about MVIS stock and any other penny stocks on Twitter @moneymorning using #PennyStocks

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