David Collins hits the ball out of the park!
Mr. Collins is of course Wave's PR guy so one would expect an upbeat reply to a rather sour note from a disgruntled investor. (Thanks! Wavxmaster for sharing!)
I found the letter to be convincing and well presented. I was impressed with the controlled passion and specificity. Personally, I found the below paragraph to be particularly promising.
"Today Bill delivered on a promise on the Q4 call - he has forged a relationship to leverage Wave's technology in the market for EMV cards - seeking to bring the smart card level of security on European Credit cards - to PC transactions - by leveraging the security in the TPM chip. It is an obvious extension of Wave's expertise and solutions and it offers a huge potential market. The investment is modest and the reward potentially enormous. Similar to the effort to work with Micron that Bill inked - which is targeted for security solutions for the "Internet of things."
On Thursday, July 31, 2014 5:04 PM, David C. Collins wrote:
Hi Brad,
As I'm sure you know, I've been with Wave in the IR role over that time - and so I am well aware of the track record; it's been dismal for shareholders to say the least and I cannot guarantee a happy ending to the story - even today. But it sure looks better than it did.
I can't change the past, but I can tell you that for the first time in a long while, it really does feel like we have the focus, leadership, financial position, products and market interest to finally begin to build a business - not just a story. And having spoken with many investors, I also know that it provides no benefit for us to critique the actions of the past - as they are behind the Company and the leadership behind them is no longer anywhere in sight. Wave has new leadership with a very different focus on business execution.
I am well aware that shareholders are angry & distrustful - but the one thing I don't want you or anyone else to miss - is that there is a new sheriff in town who brings the proper experience and attributes to convert Wave's technology and products into a successful business. Bill Solms is a software sales executive (Oracle, MSFT & Intellidyne) who had a very successful military career prior to entering technology.
Bill joined Wave to head up sales - and was very reluctant to do so - until he was pressured into doing some due diligence that changed his mind and got him to join Wave. His timing was excellent because within three-four months the Board had finally pulled the plug on the Company's long-standing CEO, and Bill was the best man to fill the job on an interim basis. In less than 2 months Bill proved to the Board that his interim position should be made permanent and a Board seat should be granted.
The key to the Wave story is Bill - and the three new board members he has brought to Wave give him the influence he needs to execute his plans. Bill replaced the prior CFO as well and collectively the CEO & CFO's guaranteed comp is well less than half of their predecessors - showing their fiscal prudence and that they walk their talk.
Bill believes he can make Wave successful as a business - which he divines by sales growth, cash flow, profits and the end of persistent dilution that has wreaked havoc on Wave's shareholders. Bill has integrity and moral fiber, is a great leader who does not shy from tough decisions. Bill believes he can bring success to Wave and based on what he has said and then done since last October, and I believe he can too. That does not mean he is guaranteed to be successful - but that there are myriad factors that suggest we have a really good chance finally.
What Bill believes, based on his research and dialogues is that Wave DOES have some great technology and products that are truly differentiated in the market and that DO address major customer needs. He is repositioning the product names and feature sets to directly address product needs that currently exist; whereas the prior Wave always seemed to be in its own world with solutions with their own names and functionality that never really resonated much outside of the Company.
Bill is transforming Wave. It's culture, mission, focus, products, people and its sales, marketing & corporate messages. He's focusing on solutions that customers need; spending money only on things that can be successful and optimizing all resources to ensure the greatest ROI. He is tireless in his efforts, traveling the globe to meet employees, partners, customers, etc. He has developed goals and measures and has brought a level of professional management and focus that Wave has never seen. He is horrified by the damage that has been wreaked off the back of shareholder investment - and committed to begin to turn that around - and he has much to gain if he does for he his compensation is heavily weighted to share price performance and he has even purchased stock in the open market (as did the new CFO, Walter Shephard).
Bill has prudently reviewed the Company and its teams and efforts and over the past 8-9 months has dramatically changed the Company. The sales & marketing team is almost completely new - and the Virtual Smart Card solution is a first ever Wave product that is really designed around addressing current security needs of customers today - and it is providing the very clear message that it can provide its security features at a far lower total cost of ownership, with a far better user experience.
Bill inherited a company with insufficient capital and plenty of red ink. He completed the $9.9M funding because the company he was named to head was nearly insolvent and needed funds. He executed the largest raise in a few years at what has proven to be a very attractive price, buying enough time, we all hope, to deliver some business progress that should bring Wave closer to breakeven.
Bill has no crystal ball - but he does have a playbook that seems to work. In his tenure he closed deals with Intel, Samsung (2), Kingston, SanDisk, WidePoint, Micron & Bell ID - several of these deals had foundered under the prior regime - but Bill assessed the potential, and where it was worthwhile he started at square one to forge deals that worked for both sides.
On the sales front he has refocused the organization on a few products and on larger customers. He has turned over the sales force and hired very experienced people - however this process takes 3-5 quarters from start to a likely deal closing. On this basis, Bill believes the new approach could/should begin to land some new key accounts by Q4 '14 and then build from there. In the interim, the performance will be impacted by the sales force, product, marketing and other restructuring - all very smart moves but they do cost time, so the first few quarters of 2014 have no reason to expect much - unless for some reason something can gel faster than expected.
For all these reasons, I am eager to make sure that our long suffering shareholders are fully aware of the changes that are being made and that there is truly new found hope for improved performance. No guarantee - but a good, ethical, hard working leader who is moving the business in that direction and seems unwilling to accept anything less than success.
I recognize that history has put a very bad taste in shareholders' mouths - and I do hear that many can't forget the past in assessing the new team and prospects. Their view is too colored by the disappointment of the prior regime. While I am frustrated for Bill, who is now weighed down by this historic baggage, we do understand it - but our desire is to get investors to begin to consider the Company in a very new light - a new perspective that is deserved by its actions. Today Bill delivered on a promise on the Q4 call - he has forged a relationship to leverage Wave's technology in the market for EMV cards - seeking to bring the smart card level of security on European Credit cards - to PC transactions - by leveraging the security in the TPM chip. It is an obvious extension of Wave's expertise and solutions and it offers a huge potential market. The investment is modest and the reward potentially enormous. Similar to the effort to work with Micron that Bill inked - which is targeted for security solutions for the "Internet of things."
The really good news is that the fundamental problem that Wave set out to solve - is alive and well and has never needed a solution more than it does today - and the threat of device, data and network security continues to grow. The one thing that Wave has done well is to remain relevant in its solutions despite the rapid change of the world of computing. Bill inherits great technologies that address major challenges, and it really does seem like the world will start spending on solutions.
Throughout my tenure heading Wave's IR efforts - I have always led with candor as I describe both the opportunities and the challenges. I have always made clear the risks as have the Company's communications. The data was always there. Today seems different - and I hope by year end it won't just be a belief - but a reality; and for that reason we decided to reach out to all those investors who's contact info we had - to make sure we tried to update them on Wave's improved position.
For all the reasons I mentioned, I really feel Wave has a shot and for that reason I owe it to you and any other investor to spend the time as I have just now, to fill you in on where we are. I wrote this letter just for you - though I may borrow from it for future responses. What you choose to do with information is up to you - but I at least hope that you will feel that your question was seriously considered and answered, and you have a wealth of other information at your fingertips on Wave's website if you care to learn more.
Best regards,
David
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