What happened

Shares of MicroVision (MVIS 9.60%) are soaring in Thursday's trading. The machine-vision specialist's stock was up 14.1% at 10:30 a.m. ET, according to data from S&P Global Market Intelligence.

MicroVision announced on Wednesday evening that it was canceling its plans for a new stock offering. With the threat of significant stock dilution now removed, investors are pouring back into the stock. 

So what

On June 13, MicroVision announced plans to offer at least $75 million in new stock with the potential to sell an additional $11.25 million stock within 30 days of the first offering. Following the announcement, the company's share price plummeted. Rather than risk continued valuation declines, it looks like machine-vision specialist will pursue other fundraising avenues. 

MicroVision has been putting up explosive stock gains this year, thanks to a short squeeze. The company had planned to capitalize on the rapid gains for its share price by selling new stock in order to raise new funding, but the company quickly pivoted from the plan after shareholders reacted negatively.

Now what

With today's rebound rally, MicroVision stock is now up roughly 124% across this year's trading. While it's possible that the impressive bullish momentum will continue, investors should keep in mind that its recent pricing action is largely divorced from the company's business fundamentals and performance outlook.

MicroVision is still recording very little revenue and posting substantial losses. Last quarter, the company recorded just $800,000 in sales and posted a net loss of $19 million. With only $67.7 million in cash at the end of last quarter, MicroVision will need to raise new funding quickly in order to continue covering its operating losses. 

While the since-canceled stock offering would have resulted in significant stock dilution, it's possible that proceeding with the new share sale would have been better for long-term investors. Share price gains from short squeezes don't tend to last very long, and there's a significant risk that the stock will see downward pricing momentum in the near future.