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OT - oknpv... send me an email to celand2003andbeyond@yahoo.com. I have some info. for you.
Paul
Why does Yahoo say WAVX +0.28 (25.45%) in AH? I didn't see any AH trades on Nasdaq. Does anyone see any AH trades?
Paul
Hey oknpv... good observation! We did indeed get some NEW institutional support, as well as current holders raising their bets in this WAVX gamble (said mockingly). The lion's share of new support came from Cramer Rosenthal McGlynn who bought 817K shares and Alexandria Investment Management who bought 400K shares. After crunching all the numbers, it boils down to this:
a.) New positions outnumbered sold-out positions by over 3 to 1.
b.) Similarly, current holders increased their positions over current holders that decreased their positions by more than 3 to 1.
Paul
Remember that the market is forward-looking. If SKS said disencouraging things for the future, we would be heading below a buck fast. So, it seems the market recognizes Wave is headed towards the goal of becoming a power in the TC space.
Paul
You're right Mig. If we don't get something, the shelf offering will be hard to do and whatever get's done will be done for a buck and change or less... sheesh. Unless it is a buy-in. Also, the runway others and myself have mentioned due to SSPX shares is also getting cut down with that stock price sinking. I'm sure mgmt. realizes all of this, but if they have nothing to give, then they have nothing to give and we're all screwed. I hope they have something up their sleeve to make this all work out.
Paul
After reading a ton of posts from various time periods going back to July 31, 2003, I can say one thing for sure about this board: Folks are in a very agitated state. And I say this in a good manner and it is a good perspective to have at this juncture of the company's roll-out.
Before, folks were pleased about everything occuring because of the Intel mobo deal and regained faith in mgmt. Now, after no significant developments have transpired since then, folks are scrutinizing the company, mgmt., the market and Wave's potential in the short-term and long-term. It appears that many are prepared to ask some tough questions at the CC... rightfully so and kudos to everyone.
Paul
Thanks oknpv. I like the name Paul (hoping I have a boy someday to name Paul) and I liked Czar for the reasons you mentioned. Your posts are good too. I'll have to send you a private email during happy hour so we can discuss this whole thing if you like. Is that at 5pm EST?
Paul
The way this is trading before Q1 results indicates nobody knows anything... no leaks.
Paul
I'm really tired of hearing: "XXX don't get it" or in a broarder sense: The market don't get it." I was totally unfamiliar with hardware & software based computer security a couple of months ago. Now, I have a pretty good grasp of the technology after just reading some articles and line cards. This line card is superb in my opinion:
http://www.silicontrust.com/pdf/secure_8/40_wave.pdf
At this time, I don't think it applies to anybody in this field/sector of computer technology.
My statement is not directed at you helpfulbacteria. I'm just sick of hearing that. I just wanted to get that off my chest I guess. It is not a valid excuse for market acceptance of Wave's products I guess is my reason for making this post.
Does anybody really think that the market doesn't understand hardware & software based TC? Seriously, just an honest question. I think we are beyond that point and that is why I am confident that Wave is starting to make sales of their entire product offering. Sales presentations are underway and the sales cycle has begun as a result of the "foot in the door" Wave has received from demoing at conferences and the road show. Revenues are starting to become generated in my opinion.
Cheers,
Paul
Co-op funds from MSFT would be the norm in that kind of marketing roll-out. MSFT was the host.
Paul
Yeah orda... I know. As they say: "You live, you learn." I'm betting on that and placing my bets.
Paul
However, since they still have 2.875M shares of SSPX shares left, they could sell those in the coming months to fund operations beyond Septmeber and wait until Q2 results come out in mid-August to get $4 or higher if they know sales and other developments will propel the stock up significantly.
It seems they have several cards to play to get the best price.
Paul
With a $4.6M loss, that would mean Wave still has approximately $7.8M of working capital as of April 1st. Therefore, they have at least 5 months of cash left which funds operations through August. That being the case, they do have a couple months of cushion before they begin to sell more shares. I find it interesting that they used the $2.14 share price of April 13th for the prospectus, being it wonderful timing with the market price and the filing or whatever. For some reason, to me it insinuates that the first round they issue in the coming weeks that they will seek at least that price due to some developments they are counting on. I bet that they are betting on a price rally due to Q1 results or some news to follow in June or July. They cannot be thinking of waiting until Q2 results for a price rally because that would be cutting it pretty close in that they come out mid-August and Wave will run out of money in the first half of September.
My whole point here being that they obviously want to get the best price (over $2) for these rounds of stock sales and there must be something in the pipe-line within the next 2 and a half months that would propel the stock above 2 or 3 bucks that they are preparing to PR. A buy-in would entail a several million share issuance and would be a large percentage of the $25 million, so obviously they would like the stock price to be around $3 or $4.
This is an exciting time to be a Wave investor. I would not be trading for swings for the next 3 months because any one morning some news could come out and send the stock up a couple of bucks.
Just my 2 cents,
Paul
My estimate on earnings: (.04) per share. Includes sale of 1M shares of SSPX (already wriiten-off) @ $1.65. Total Q's loss calculated at $4.6M (includes late penalty for preferred share conversion). At least we have a pretty good idea of their burn-rate and understand that they have costs under control.
Paul
eamonshute:
My gut feeling lies around that number too.
Paul
$200K+ is my guess.
Intel should be about $100K+ and I'm guessing that we had some TAN, ACM & KTM sales (through IBM, HP & NTRU placement included) along with some Wavexpress business.
Paul
Give that man a cigar.
Paul
Last thought for the night is regarding revenues.
Obviously, Wave has been demoing at numerous conferences and the ongoing road show with MSFT. They are illustrating that their products have the support of many of the key computer companies around, as well as the authority on Trusted Computing, the TCG. I know we are all demoed-out as some folks have stated, but keep in mind that this WILL lead to sales. I believe that the TC market (a real market with buyers) has really just arose as of the beginning of the year. Into the second quarter, TC has gotten a big shot in the arm and a lot of visibility with the MSFT NGSCB announcement. Trade publications now have their teeth into investigating this whole sector of the computer world and undoubtedly they will be bumping into Wave ever more frequently in the coming weeks. But back to the conferences and road show. The exposure Wave is getting there, real face-to-face - here's my card... let me get yours, will result in sales presentations and shortly thereafter sales. Q1 should include some numbers from sales cycles that started in Q4. Q2 results should have larger numbers from sales cycles that started in Q1 and ended in Q2. The bottom line is that this market is now really picking-up momentum and Wave is smack-dab in the middle of it with the computer industry's support and eye on it. By this time next year, Wave will be operating at full steam in my opinion because this is an up and coming billion dollar global market. This is definitely a very logical, reasonable (PPS) and predictable (visible market) investment.
Paul
Also, perhaps the NTRU partnership has gotten Wave in the door to make some sales presentations and sales. That would be another good question for the CC.
Paul
A good question for the CC would be:
"Would you please provide some information about the traction of TAN, ACM and KTM sales?"
Paul
The TCG members should be the first adopters. Hopefully, this is the case. Anybody poking around some of these companies (if they have friends working there) to find out if TC networks are being deployed there?
Paul
I like this part:
"There are millions of trusted computers in business networks today. These computers are secured by TPMs, and keys stored within the TPM hardware protect user data."
With all the products Wave has to manage TPM computers/networks, you would figure that Embassy, TAN, ACM and KTM and being purchased by these enterprises to have full functionality of these newly deployed Trusted Computing networks.
Consequently, one would assume that sales of TPMs provide Wave with a level of revenue and that the subsequent software sales provide a much more significant level of revenues.
Hopefully, Wave reports Q1 results this week and revenues are at least a quarter million dollars. That's my estimate.
Paul
I think this is the best piece I've seen which explains Wave's products. Perhaps we should put it on the main page.
http://www.silicontrust.com/pdf/secure_8/40_wave.pdf
Paul
Before I go today, let me say that someone should ask about the potential impact of the NGSCB announcement on Wave's business during the CC next week. I never seem to get a chance to ask questions.
Paul
barge: Your probably right that MSFT will not be allowed to monopolize the TC market by taking control of Wave/Embassy. However, I believe that they will be able to incorporate Embassy functionality into MSFT software and attestation would be handled directly by Wave.
Paul
Good afternoon gents.
Thanks for your feedback. Let me just say that I only call them as I see them. Let me explain further:
Put yourself in MSFT's shoes right now. They need help with NGSCB and they know somebody that has all the answers now. Surely, the NGSCB program managers are familiar with Wave and are aware of the relationship currently ongoing between MSFT and Wave. So it boils down to whether they want the answers now or do they want to spend an incredible amount of time and energy trying to figure it out on their own. I'm sure they are aware of how long it took Wave. Bring into the picture the article posted earlier about how MSFT invests in start-ups and consider that Wave really still is a start-up and the amount of cash we need is not of the typical joint venture magnitude. We have been around for awhile, but we still are considered a development company; therefore, we fit their investment model as well. Internally at MSFT, I would say we have the engineers on our side first and the financial officers second if they were to be approached with the idea. The last component is upper management, namely Billy.
With the announcement about the security short-fall within NGSCB and the current demand for security in the marketplace, I believe it has placed MSFT between a rock and a hard place. Billy knows this. You have a large, visible organization like TCG with huge companies involved touting the security flag and the IT community screaming that they need better security now, not 2 or 3 years from now. And it gets even better. These IT folks have been exposed to something they never heard of before, namely hardware and software based security. Before, they thought that software could handle all security issues until hackers and virus creators shattered their world. The members of TCG (Intel taking the lead) and even MSFT themselves said that the best way that you are going to get security is to have a seperate piece of hardware encrypting everything and controlling access. Now, these IT people are convinced that this type of security system is what they need and they are looking for more information about an available system today, but MSFT tells them that they'll have to wait. I don't see them as being too happy about that after all the hoopla and asking questions like: "Is there a company out there that can do this now." I believe MSFT realizes this and they just cannot sit on their hands and wait for their engineers to come up with the solution when those guys are saying: "Everything is all up in the air now." It would be foolish for them to get pushed out of the entire hardware & software security system market by a little up-start like Wave. They are not that dumb. They want a piece of this pie and Billy will negotiate with Wave and begin a joint venture.
I'm calling them as I see them.
Paul
Regarding Q1 results:
Wouldn't some of these deployments (from a recent PR describing discussions at a conference) create some revenue, like at least $100K - $200K worth?
"You will hear real examples of enterprises using TPMs to manage and protect data in healthcare, finance, pharmaceutical and other environments. You also will hear about cutting-edge research into network security, authentication and data management, and learn how you can benefit from this research, which is being funded by dozens of computing industry companies worldwide."
I sure hope so.
Paul
One other interesting observation is that 14 million share day a little while back. That day, the money flow was incredible and as we all know the stock went up to $2.14 on no news. Then, later that evening a MSFT/Wave press release showed up. It was regarding Wavexpress' movie technology operating in a Windows environment. The next day there was a 7 million share sell-off and we find ourselves around $1.30 today. I find this interesting because the buy volume precedeing the MSFT/Wave PR. My theory here is that someone heard that a MSFT/Wave press release was coming and that the word spread that it was something like a joint venture. Obviously, someone IS thinking along my lines and waiting for that day. The 14 million share day was a false start. But when that day comes that MSFT's center hikes the ball to Wave's QB, we are going to see another 60 million share day.
Paul
Thanks awk. The funny thing is that when barge posted his comments about his meeting with SKS a few months ago, it appeared to me that SKS seemed way too cool under fire as the saying goes when discussing Wave's financial outlook. I mean, I am pretty un-nerved about Wave's financial predicament at the moment being an investor because I don't know the insider stuff and SKS, knowing all the insider stuff, would be as well and I believe it would come out in his discussions because of his character, on the CCs or elsewhere like his chat with barge. Yet, barge seemed to portray SKS's disposition as one of calm collectiveness and this was amongst all of his excitedness & energy about the technology. Given his easily excitable character (in my opinion by what I perceive) about the technology and the business, I would assume that that kind of nervous energy would be inherent within his discussions about the business and the financial future of Wave if they were in dire straits, meaning I don't think that he could hold-in a neverousness associated with the knowledge that Wave was on its last leg if that lingered in the back of his head. He definitely is not that good of an actor! So, maybe he always knew that the business would pan-out similar to my speculation and the way it appears to be unraveling in Wave's advantage would suggest that this partnership between MSFT and Wave was destined to have MSFT as a key supporter and joint venture partner. Time will only tell, but if things develop the way I see them, folks/investors are going to say: "Why didn't we see this when Wave was $1.30... it was so obvious."
Paul
Microsoft's failure to develop (in the near-term) a hardware & software based Trusted Computing system is great news for Wave. Just a few month's ago, the worry was that MSFT was gonna eat Wave's cake. Now, we have MSFT announcing that it won't be around for years. Well, one thing for sure is we have MSFT to thank for many things.
First, they brought Trusted Computing into the limelight. The amount of visibility MSFT has provided for TC is unmeasurable and most of it is in a good way. I say most because the only negative is that they illustrated how complicated it is and that they can't do it right now. Furthermore, their description of what NGSCB is supposed to do ( http://www.microsoft.com/technet/Security/news/ngscb.mspx ) is exactly what Wave states they can do right now, all the way to attestation and key management.
Secondly, the road show MSFT/Wave is conducting right now will only provide Wave with much more serious attention for TC deployments. The interest being generated about TC is growing everyday and even more so now with the NGSCB news released at WinHEC and the road show. We can all see that with the number of articles and attention the media is giving to this announcement. We are just days away from an epiphany amongst IT professionals. I believe they will be able to connect the only 2 dots necessary for an all-out recognition of Wave Systems and our Trusted Computing technology. Dot 1 being the description of NGSCB in the above link and Dot 2 being the description of Wave's product offerings, all the way to attestation and key management. All the dot connecting entails is a side-by-side comparison and analysis of the 2 technologies.
At this juncture, it would be indeed prudent for Wave to make an announcement that it can provide a Trusted Computing enviroment (like what NGSCB is planned to do) on a stand-alone basis, meaning that it is not embedded within Windows, but it is easily incorporated into a Windows environment. They can do this without stepping on MSFT's toes, but with their support. In fact, I believe the timing of the road show, the shelf registration and the NGSCB announcement are perfectly placed for an announcement of biblical proportions (for Wave investors at least). A buy-in by MSFT at this time is a win-win situation for both companies. MSFT needs Wave's technology and Wave needs MSFT's money. It is a business textbook example of a perfect fit between 2 businesses with similar businesses and the same business goal of developing and deploying Trusted Computing. I wouldn't doubt that SKS and Billy are on the phone right now. Remember, SKS stated that MSFT "gets it". A joint venture at this time would accelerate the implementations of Trusted Computing systems ten-fold in the short-term. Wave would reach break-even this year. I believe SKS was setting up all his ducks in a row and we are about to hear some spectacular news. Isn't it also nice that Wave is due to announce Q1 results next week.
Paul
Changing back to optimistic... let's say SKS has his sh_t together (because he knows he has to show some sales this quarter) and his game plan is on track and somehow manages to hustle around and get some clients during Q1 and actually gets some business and Intel sold about 250K boards and some other stuff was sold like Embassy (enterprise) and/or maybe some KTS implementations. I'm hoping for $300K to $400K. If not, this is going to be a sad place for months. Gotta go... take care.
Paul
You know what though kite, I wish we could see some frickin sales already. If Q1 comes in under 100K, this stock is going to literally stink for another 3 months. They keep saying there are customers with implementations and Intel has been moving product in the channel. I guess it's time for another survey, where's our chartist friend. He did the last revenue survey. Geez... Wave has got to know that they have to put up some numbers up to get investor confidence for financing. That's why if we get these weak numbers again, you know that only a company Wave is working with is gonna fund them. Either way, with a lack of sales this time around again, they are really going to hurt us because the share price is going to drop and if the share price drops, then to get that first third of the $25M instead of issuing 4.85M shares at $1.70 to get the $8.25M, they would have to issue 6.875M shares at $1.20 for the same amount. Otherwise, SKS better provide some guidance. Certainly, the vision for the next year is pretty clear after the area covered in the market and gauging market feedback.
Paul
Kevin:
I say they would want to and would because they know an announcement like that would be key. They could even do one on $500K because the percentage growth YoY would be over 3,000%. Sad, but true. That % would get some attention/smiles, lol.
Paul
go-kite:
I appreciate your candor, but that timeframe is disappointing and I hope your reserved estimate is wrong. Nothing personal bud. Clearly, mgmt. thought that there would be a quicker adoption rate based on the fact that they only raised $7.1M in financing. Wave is burning-through about $6.7 per quarter (just using last Q's number for the estimate), so we only have cash & liquid assets to last into July unless some decent revenues come in. This analysis is as cut-n-dry as it gets. Consequently, if your timeframe is correct, it is obvious that the Q1 results announcement will carry along with it some very significant and substantial news with respect to funding. I'm connecting my own dots here and for the record, I'll go down as saying we will have a strategic buy-in very soon. Furthermore, I would expect the first investor to get the best price and most ownership, probably between $1.60 to $1.80 a share. Right now, we are in an oversold postion and the price will go back to that range within 2 weeks going into Q1 results. Obviously, mgmt. will not offer more than a 1/3 of the $25M to go out at that price since future quarterly results will raise Wave's share price. The second round, most likely to be done in the 3rd quarter, would be done around $4 a share (given realistic appreciation in stock price based on improving results) for roughly the next 1/3 of the $25M (I'm using $8.25M as the amount being raised again) in which case another 2.0625M shares are issued. That would carry us into January of 2005 and revenues would be at near break-even by then if my hypothetical Wave Business Plan is becoming reality. That would mean the remaining 8.5M share reserve would be issued for expansion/Working Capital Needs throughout 2005 as SKS states.
Paul
Kevin:
I was thinking of up-side surprise announcements. I thought that maybe the SEC banned them for whatever reason, because in the boom years, you would always have a bunch of tech. companies blow-away their number and come out before the expected results date and make a earnings surprise announcement. I haven't seen any in awhile, so I thought maybe some new regs. went through. So, I got my answer with respect to that. They still can be done, but nobody is blowing-away their number nowadays.
I ask about them in relation to Wave because let's say Wave has revenue of $1M in Q1. Since there are no estimates out there, but the number is significant in that it breaks the million dollar mark, wouldn't Wave want to pre-announce it before the scheduled results date in mid-May?
Paul
Can Wave pre-announce earnings, like an earnings up-side surprise? Back in the day, that used to happen a lot (other companies). Now, I don't see it. Is it still allowed?
Paul
That's an excellent way to look at Wave's position in the embryonic stages of this Trusted Computing market! You could be not far from the truth my friend. For example, the GbE news from Broadcom fits exactly into your logic. If Wave has or is working on some type of specialized ethernet attestation protocol which somehow is the best way to attest in an enterprise ethernet network, then Wave has developed or is developing more complicated TPM technology while the competition is still a year or more behind in trying to figure out the basics. I'm just thinking off of the top of my head, but we all know that the lion's share of networks are ethernet and just the thought of Wave being an integral part of running Trusted Computing over them gets my heart pounding.
Paul
Thanks eamon. So then, we are the first and foremost authority on TPM/TC software it appears. With all the patents and legwork Wave has put in over the years, is it safe to assume that any potential competitor is at least a year and a half to two years behind Wave from a technology standpoint. eamon/Doma/Snackman/Barge/awk: This question is for you and any other techies out there. Sorry if I missed some of you guys.
TIA,
Czar
P.S. eamon: Do you like the Tsar spelling because you have a little Eastern European or Russian blood running through your veins? I'm actually Polish.
Ultimaco doesn't appear to have attestion. On a scale of 1 to 10, what level of a competitive threat are they?
http://www.teletrust.de/dokumente/rsa04_ws-vortr-koehler.pdf
Paul
I like the second paragraph...
Join security technology architects from Atmel, IBM, Intel Corporation, and Wave Systems as they discuss how you can protect your vital business data using Trusted Platform Modules. These hardware components, embedded into desktop PCs and notebooks, can be more effective than software-only security. The TPM provides a protected space for key operations and other security critical tasks that are not protected today. Using tamper-resistant hardware and software, the TPM secures encryption and signature keys at their most vulnerable stages - operations when the keys are being used unencrypted in plain-text form. The TPM is specifically designed to shield unencrypted keys and platform authentication information from software-based attacks. We will take a look at how TPMs and available applications and services can help you manage network security more effectively. And we will review the role of the TPM in authenticating users and handling other security functions.
You will hear real examples of enterprises using TPMs to manage and protect data in healthcare, finance, pharmaceutical and other environments. You also will hear about cutting-edge research into network security, authentication and data management, and learn how you can benefit from this research, which is being funded by dozens of computing industry companies worldwide.
Immediately before and after this informative programme, you can browse demonstrations of live applications and systems using Trusted Platform Modules to maintain data integrity, ensure users are authentic and keep transactions safe.
Representatives from Trusted Computing Group will be available throughout the Infosecurity Europe exhibit at the HP Stand 450 and Microsoft Stand 630. Or see the TCG website, www.trustedcomputinggroup.org
Paul