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rwk, yup,
1. cash-out
2. play on the house
3. let 'em ride
Some of 2 or 3 may involve accommodation of tax liability as well, I believe exercise and hold enforces an immediate liability under AMT with a recalculation of basis, but I'm not sure.
The same model applies to options and the tax liability is the 'reason' SKS sometimes uses for how he handles options (in not doing exercise and hold).
There are plenty of investors who note that while these three choices are available with both warrants and options, management consistently takes the least bullish strategy. Hopefully management isn't a role-model for warrant holders.
(yes, I did kinda stand that post on its head)
player, oops, didn't see yours when I posted same /e
Warrants Clarification
Allow me to clarify on Warrants as my broad brush based on the PIPE PRs is not up to date.
The June 21, 2011 S3 (the shelf) is the most recent accounting of this that I know. The following are stated to be “outstanding warrants”, note that the numbers are much less than those issued during the various PIPEs as holders of the warrants have chosen to take money off the table at various times:
(Expiration, shares, price, procedes)
Dec 24, 2011 967,500 sh $0.28 $271k (gone/excercised)
Mar 13, 2012 153,840 sh $0.55 $85k (expire this Tues)
Apr 8, 2012 432,692 sh $0.55 $238k (expire early Apr)
Feb 28, 2013 165,000 sh $1.15 $190k
Oct 30, 2013 1,847,500 sh $0.40 $739k
Jan 17, 2015 199,999 sh $1.155 $231k
Jan 22, 2015 271,738 sh $1.155 $314k
Total warrrants oustanding less the Dec expired warrants is 3,070,769 sh.
No warrants were excercised in Q3, this is an inferred number by comparing cash from warrants in the Q2 and Q3 10-Qs which are reported cumulatively for the year and there was no change in that number ($991k) from Q2 to Q3.
In the end there is less warrant overhang than I thought.
If one was to spin, it could be said that the warrant holders are rather bullish as their warrants are deep in the money and have been for some time, and yet they hold. Surely, if doom and gloom were just around the corner one would have dumped these things long ago.
lugan, 392k shares of warrants expire end of next week, specific enough? (55 cents a share)
tkc, Q3 SGA+RD was
$10.9m
Safend (not included in Q3, but stated later) was $2.295m for Q3.
It seems one HAS to use $13.187m as the BOTTOM for SGA+RD, unless they achieved some efficiencies in the t.o.
My napkin says $14.3m consolidated SGA+RD Q4.
edit:
tkc, in notes, bottom page 8, top page 9 it gives an unauditied 'this is what it would look like' if Safend was in for the whole Q
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8233117-26945-75706&type=sect&dcn=0001104659-11-062733
it only give net revs and net loss, but with the Wave numbers the Safend revs (1.604m) and exps (2.295m) can be deduced.
toro, it is rather important actually:
coming due next Thursday (this COULD explain recent selling pressure):
http://www.wave.com/news/press_archive/09/090316_WAVX.asp#
... and then in April ...
http://www.wave.com/news/press_archive/09/090409_WAVX.asp#
... series J is good till 2013 ...
http://www.wave.com/news/press_archive/08/081031_WAVX.asp
I haven't poured through this i a while and seen which ones are still on the table, something that is best done with a fresh annual report in hand :)
randyskogs, I'm not a short squeezist,
while I believe such things happen, I also believe that in most cases they don't, that short interest likely uses a variety of methods to protect itself, and such methods generally afford action without panic. That said, the short interest does represent pent-up demand that in the absence of bk must be covered. WAVX has long had supply in the form of options and warrants and I imagine that such pent up supply can offset short interest, depending of course on the kinetics of how it all plays out.
I largely consider the 10m shares of short interest and the mountain of options and remaining warrants (and the ATM) to be supply-demand neutral were there to be significant SP appreciation.
But I try to temper expectations and not pin my hopes on things that generally don't happen, like short squeezes or 6 million seat Q3 DoD orders.
barge its a curious dichotomy, (edit)
why buy when it is clear there are folks who are wiling to sell them to you for less, ... but only for less. The seel-side clearly seems to be intersted in things other than maximising the value of those shares, if they wee so interests the buyers are standing right there, a penny away. If the large bid goes away, then all of a sudden the sellers 'panic' and need to sell, .... riggghhht.
It will go down again, the buyers will nap. Interest outside this loop must come in to beak the cycle. Material news will break the cycle, one way or the other. But this is clearly cat-and-mouse, with sellers only interested in business below the bid, and buyers only interested above the ask.
I gotta get me some of that genuine efficient market stuff. Gotta be better than single malt.
edit whew, there it was, a buyer managed to leapfrog the ask
I'm seeing :edit edit2
1:21 ... 100 sh
1:22 ... 500 sh
1:23 ... nil
1:24 ... 100 sh
1:25 ... 300 sh
1:25 ... 100 sh
1:26 ... 100 sh
1:27 ... 100 sh
1:28 ... nil
1:29 ... 100sh
That is a "massive" to the extent that Micrsoft Windows is a niche.
(and the bid is 10k, if you want out, there they are, when the bid vanishes, the ask will chase, but the ask doesn't seem to want to maximise share value)
There is 10k on at the bid and ask, on opposite side of a penny. If the bid leaves, then the ask will move to sell. The sellers are only selling if it means the SP goes down.
I've seen crazier things ... folks buying shares from me aftermarket 10% ABOVE the closing and following open's asks. Weird. 'I will sell you 10k shares, but I will not take 1.72 for them, although I'd be happy to sell them to you for 1.68.'
unixguy, I believe you are error,
5-8 minute intervals between trades does not reflect a massive of anything. It reflects the opposite. There was a massive pulse that took it to the low, then poof, gone.
Same thing last week, a massive pulse took it down, then pooof, gone.
This is not the makeup of a stamped.
Sell side interest is appears unwilling in some way to get the most bang for their share. If sell side interest was interested in getting the most money for their shares, they would unlikely focus their sales into tight illiquid windows in a largely illiquid equity.
I know you are in IT so this may not be familiar, but if one is seeking to escape and minimize losses, they don't focus sells into tight, thinly-traded windows. The effect of such effort causes massive SP erosion, inconsistent with your conclusion.
D&O, SP etc,
I am never part of any manipulation conspiracy thingy, and am always party to the notion that SP weakness represents a lack of demand in the face of available supply ... but ...
there is definitely a long history of significant SP anxiety surrounding the annual report (and often Q1), and the big-volume-step-wise nature of the SP drops appear more like strike-and-withdraw trading.
Potential buyers are napping, bang, volume spike and SP collapse, potential buyers finish their coffee, large bids show up, and the sellers vanish.
Certainly there is no evidence that something material happened to undermine the equity. Nobody, not even unix, is anticipating anything other than significant revenue growth in the annual report. Indeed the efforts of the sell side argument is doing backflips to discount the value of revenue growth (because it will be in the report) and to focus away from clear demonstration of stated goals and towards else (only profits matter, Win8 is a niche, some really precious stuff). Revenue growth, regardless of what those who poo-poo it say is a central closely followed metric for equity evaluation, often THE most important metric (and cash flow) in all but the most established and largely static companies.
The only thing that has happened in the last few weeks of any material note (IMO) is that Wave won a Army Sole Source contract to provide pre-deployment (ERAS-TDM) engineering services to to a DRS originated FBCB2 contract that is stated, by the Army, to start shipping in "FEB/MAR".
The one other thing that seems of interest and explains some of Wave's rising costs is the demos of the Arm-Trustzone-TrustedLogic-Wave (non-Windows) devices (which is again Wave doing what Wave said Wave was goign to do, spend money to develop products in the mobile market).
Otherwise, it all looks like typical Annual report anxiety couple with some sell side opportunism. The sell side opportunism is perfectly rational, not evil boogeymen, and reflects that there is nothing public giving sell side interest any cause for near term concern on the gambit.
Yawn. (and my feelers at the bid can't seem to find willing sellers, fancy that).
The SMB numbers are what will matter (to me),
Wave didn't need to hire an extra 100 sales people to chase a few large accounts (IMO), the staff increase is to support SMB (IMO), seriously LMT isn't concerned about a local sales office, they host.
SMB numbers appeared to show a nice improvement in Q3, continuance of that will be very bullish to me. I have always placed more weigh on bundling and SMB sales than most folks around here, but it is the bigger part of the pie, and 10 or 20% of the bigger piece of the pie is a big piece.
telstar55, I'm seeing Win8 getting hammered a fair bit in the bloggosphere. Its an interface complaint, MSFT seeks a unified interface, the blogosphere aristocrats want the classic Win interface on their PCs, a different one on their tab or phone. Whether MSFT stumbles on the GUI unification effort will take more than the blogtechs to determine, but the success or failure of the unified interface is entirely secondary to the features of Win8 that are relevant to TC. I'm thinking MSFT is going to blink and offer the ability to switch PCs the the classic interface, or perhaps consumers want their PCs to look like their phones and tabs and the bolgtech folks are out of touch. Beats me, but the ARE whinning about it,.
jayb, while I share the general impression
last year the SP started sliging well before the annual, and just kept sliding, Q1 the SP was basically trending sideways and then fell with the report, Q2 the SP was falling into the Q report and rallied well after that, Q3 the SP started falling mid-Oct and just kept falling.
So that annual: no change in trend
Q1, sideways change to down.
Q2, down change to up.
Q3, down continued down.
Its been my observation of the old buy pre-CC sell the CC model for Wave has largely broken down.
There was a day were it was quite reliably, a hype rally, a reality fade.
Current trading does make one question whether the annual will dissappoint, but I have no idea what folks generally expect.
I used to like polls that way.
And the TA award goes to ....
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72975832
unix, that I did not describe what percent of the ecosystem MSFT is not my problem. Its yours. I consider MSFTs flagship operating system to be a significant component of the computing ecosystem. You, it seems, question that. Either way they are clearly going all-in with TCG-TC. Again, you may be correct and the direction of MSFTs flagship operating system may be an insignificant matter, you are in IT, I guess you must now. I happen to believe MSFTs is not dead and buried yet in the OS space. Ecosystem.
unix, again, you are correct,
MSFT may fail to sell its newest version Windows, undoubtedly a matter considerable concern here:
http://investorshub.advfn.com/boards/board.aspx?board_id=204
You miss the point. That MSFT has decided to go all-in with TPMs and UEFI etc. demonstrates clearly where computing is going. A place you have repeatedly said it will not go. Remember vPro will subsume TPMs? Enterprise will never accept TPMs?
Whether Win8's one-size-fits-all interface takes a face-plant is MSFTs concern. If it does, they'll fix it (at lesat its my thinking MSFT plans to be in the OS business for some time). ICBW.
Should MSFT e.g. revamp the Win8 experience for PCs, allow a legacy interface e.g., is MSFTS business.
But whatever form MSFT flagship operating system ultimately takes (their niche product), that it will fully embrace TCG-TC is now well established. That spells ecosystem, Period.
You have durably said it will not be. You are wrong.
tkc, indeed as there is only 2 weeks left in Q1 by the time the CC comes up it would seem to provide ample information for mgmt to provide some guidance, and they have at times been pressed, and they pretty much feign ignorance. I'm no accountant and maybe they do bookeeping like I do taxes, throw it all in a box, and dump on the table when the deadline approaches (or they just don't want to screw up and give food for errant conclusions).
[fyi, content filtering is done by mods, which can be contested, and admin, which cannot. under your mailbox there is a tab of removed posts, which maintains a record of the content, you can PM admin at any time but the rules are admin filtering is uncontestable]
unix, one more time,
Wave's stated strategy is to maximize revenue growth.
I may be off by a bit, but it looks like Wave revenue for Q4 and FY2011 will be roughly
Q4’11 +30% over Q3’11
Q4’11 +75% over Q4’10
FY2012 +45% over FY2011
Given that Wave's stated goal is to maximize revenue growth, it appears they are executing that strategy well.
unix once again,
Win8 is not Wave, it is part of the ecosystem forming the market that Wave targets.
unix, you also mentioned
this:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=73004079
answer:
Win8 is not Wave, Win8 is part of the ecosystems that forms Wave's market.
unix, in a different message you said:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72992151
answer:
Win8 is not Wave, Win8 is part of the ecosystems tha forms Wave's market.
unix, on Win8
you said:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=73038498
answer:
Win8 is not Wave, Win8 is part of the ecosystem tha forms Wave's market.
If the statement repeats itself,
should not the answer?
A lack of profit statement is being durably repeated.
This is a the answer:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=73023260
WAVX Revenue Growth,
I may be off by a bit, but it looks like Wave revenue for Q4 and FY2011 will be roughly
Q4’11 +30% over Q3’11
Q4’11 +75% over Q4’10
FY2012 +45% over FY2011
So, I am inclined to think Wave is following a revenue maximising strategy as outlined here:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=73023260
It is what Wave has stated is their plan, so on that it looks like they are executing.
This appears to be on the backdrop of cash flow break even for FY 2011 according to their SEC filings.
Alea, nice post. /e
waveytrain, CC
Maybe something like "the gov has delayed KeystoneXL, but don't worry ... Wave's got a pipeline"
PC, on fundamentals,
WAVX is trading at >4x sales with essenitally zero/negative free cash-flow.
On a fundamental basis WAVX is trading at high valuations. This high valuation is supported by current growth rates.
Presumably the price anticipates a significant change in the fundamentals as a consequence of anticipated growth.
But the "no fundamental reason" to me ignores the fundamentals.
WAVX occasionally rallies to PS of 10+, falls to PS of 4ish, and usually parks at PS of around 6 to 7. All very bullish.
AAPL (as bullish as they get) trades at <4x sales, >20x levered free cash flow and about 15x earnings.
alea, definitely, edit
the interval from innovation to meaningful deployment is extreemly rapid in mobile and rarely encumbered by Legacy short of the MNO signal itself.
PCs on the other hand are marked by saturation deployment of unused things over years that finally go live en masse.
edit: in this case it could result in both trains effectively leaving the station at the same time. A matrix all at once.
Landmark Ventures v. Wave Systems and Safend Ltd, see the Q3 report. Safend is accused of violating a contract by hiring a consultant or continuing to use a consultant or something like that at the conclusion of their contract with Landmark (as memory serves), $5m is the ask, Landmark also sued McAfee shortly after McAfee took over Nitrosecurity, I don't know if they wait to sue when they see deeper pockets, suit filed last Oct (and Nov vs Nitro), Presiding Judge Crotty, US District New York Southern. Crotty is a W. judge, gets decent marks on some attorney score card site, weak in criminal case. That's all I know. Just google Landmark v. Wave
unix, you mean high like this???
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=61401868
that was a year ago, and currently I'm sitting at $37m ... not a lot of change, backout Safend and I've got $35m, bottom of a year old guess.
Just sayin.
TpT, my technofunkomentalism has been warm to sub-2.20 for some time, so yea, this would meet that 'opportunity' thingy. If 2012 revs disappoint, for me that is at about $52m, then at the current multiple (the lowest multiple in some time) then that would translate to some 2.20ish, or a 20% gain from here, which I expect to beat the market. I generally mock-up revs at more like 62m for 2012, which at currrent multiples is 2.65ish and at more 'normal' WAVX multiples is closer to $4, which again I would expect to beat the market. Q4 should inform these notions a fair bit. I don't consider any of the above to be particularly aggressive guessing, and all of it trounces 1.80 and trounces my expectations of the broader market and the preponderance of my individual equities. If my SWAG for a Monday hammer happens (kinda like guessing weather a month out or the exact minute of an earthquake) then that may well represent a best guess near-term bottom. It is important to note that Wave often swoons this time of year, Voids get rather grumpy, options dumps land in the face, bonus numbers go public, Lee tells us that if we want them to put some skin in the game we need to call Congress (*?!) or the SEC (huh?) and that is received with all the mood and respect it deserves. I want to see Q4 and am curious about FBCB2, it seems that if anything like a 10k seat pulse comes out of that it would PR, but I am clueless as to the scope of this DRS? FBCB2 deployment, my guess being it is for the ruggedized notebooks, which I would think are a minority of the FBCB2 device footprint.
There you have it.
Like weby (and as I indicated earlier), I think I'm done with my iHub-Wavx-dear-diary stuff for a bit, things are perceverating a bit.
Muenchen, you state some truths
1. Mngt won’t buy shares. I, very seriously, believe that they neither know how nor understand what it means. Listening to their rebuttals during CCs about options dumps clearly indicates a fundamental gap in their knowledge and/or experience. It’s breathtaking. Cats don’t swim, they don’t get swimming, and nothing can or will change that.
2. MSFT won’t bluelight Wave, ever. The world according to MSFT consists of 3 things: MSFT, the hardware MSFT runs on, and “third party developers”. Third party developers are like pigeons to MSFT, they all look the same and they certainly don’t name them.
Okay, enough of that.
Fears. Folks could fear a number of things …
Let’s take the Dell bundling. One could fear that it is going away, going away soon. The data doesn’t support that. The last reported quarter reflects the highest quarterly revenue from Dell ever, some $5.7m. Does that make it impossible? No, but unlikely in the very near term in a manner that could explain near term SP weakness. Another important point about Dell revs, while they swelled in Q3 to their highest level ever, they represent the smallest percentage of Wave revs since inception of the relationship. So while the Dell gross is bigger, the dependency is shrinking.
What could inform other rational fears? DoD? Pipeline? The lawsuit?
On DoD, the Army Sole contract, Safend’s old deal with the Navy, and the scope of the NIST and DoD memorandum indicate to any observer that although the rate and nearer term scale of anything is unknown inroads exist, the big pitcure appears entirely on track, but nothing about rate or size has changed. Unknown going to unknown is not change. FWIW, I would remind folks that the Army’s Sole JA indicated the devices were scheduled to start rolling Feb/Mar. Its Feb/Mar. The engineering team is presumably currently deployed doing their FBCB2 pre-deployment stuff as requested in the award. This is, for all intents and purposes unknown. No PR, no 8k.
On the pipeline, the pipeline is the least illuminated, most without a carrot that it has been for some time. That has been the case since BP (a carrot previously known as BEWML) closed. Perhaps investors have no stomach for Wave for more than a couple of months without a fat carrot. I don’t know. The linkdin sleuthing indicates 18k seats of an 80k seat effort has deployed with the balance to deploy over the standard refresh cycle. That’s the equivalent of 3+ additional BPs in the pipeline. It’s not guaranteed, who knows when, but if GM is anything to go on, once BP has settled in they will be as likely to accelerate IMO. SMB showed real growth Q3, in a couple of weeks some light will be shed on Q4.
On the lawsuit, anything that happens there gets an 8k in 4 days, simple as that.
Everything today is largely as it was yesterday except for an announced AMI relationship, clear demonstration of an active Trusted Logic relationship, and evidence for work with Samsung consistent with the announced relationship.
Finally, while the Dow has been o.k., the Russel 2000 has been having a less than wonderful time, certainly a bad day this Friday. I don’t know about margin thresholds, $2 isn’t a hill of beans at my broker, but that varies.
It’s going to be rocky heading through the 10k, but on balance, it looks pretty good for 2012.
Maybe the Landmark Ventures case went bad?
Ask and ye shall receive,
http://investorshub.advfn.com/boards/profile.aspx?user=24718
http://investorshub.advfn.com/boards/profile.aspx?user=28639
Its obviously a disappointing SP fade on the week, the nearly exact mirror image of KERX, I should have just gone with treasuries. WAVX has often don this, followed with a week Mon, and then reverses and recovers through the rest of the week (for those seeking a pep talk).
I don't have much to 'speculate' about Wave util the Q report.
MWC Trusted Computing, the widely-derided idea of computing secured for, and against, its users, is back and the necessary hardware is already in the majority of pockets.
When Intel and Microsoft tried to introduce Trusted Computing, under the Palladium brand, they were pilloried as betraying the freedoms which had made desktop computing such a dynamic industry. But the same idea lurks in 90 per cent of the ARM chips used in mobile phones, and the software necessary was demonstrated today as the industry has gained by inches what it failed to achieve by revolution.
That demonstration was done by Trusted Logic and Wave Systems, utilising the ARM's TrustZone architecture to create secured storage which could be used to hold immutable data such as a hash of a booted operating system to prevent system alteration; software licence keys to prevent piracy, or even cryptographic identity tokens; or (gasp) to screw over the network operators who currently have a monopoly on that kind of thing.
The companies are demonstrating a package compatible with the Mobile Trusted Module (MTM) specification, put together by the Trusted Computing Group as a mobile version of its desktop specification, but while the original trusted computing never gained popular ground thanks to public outcry the public has come a long way since then. These days computer users seem happier to accept a few limits on their freedom in exchange for better security.
Anyone who's forgotten Trusted Computing would do well to read this 2003 piece from Ross Anderson at Cambridge University. It's worth reading if only to see how much his terrifying vision of the future matches the greatly-appreciated experience of iPhone users today (ironically he posits that Mac users will be locked out of the Microsoft-backed Trusted Computing ecosystem).
Anderson basher posts that trusted computing would put too much control in Microsoft's hands, but these days users have other concerns and legislation has demonstrated that governments would step in to prevent many of the scenarios he suggests.
Wave Systems reckon that ARM's TrustZone is already embedded in 90 per cent of smartphones, and while they're demonstrating on Android the technology is applicable to any platform so it will be interesting to see how/if Windows-on-ARM takes advantage of it. To be secure the cryptographic keys and software, need to be installed during manufacture, so what's being shown in Barcelona is a proof-of-concept rather than something one could deploy onto today's phones - but it's a proof-of-concept which could quickly be integrated if the handset manufacturers wish to.
The SIM providers reckon they've nothing to fear either way. They point out that securing a chip within a phone is much harder than securing a separate module with limited (and well known) interfaces. As banking moves onto the phone that will become more important. Payment applications will be able to choose where they want to live: in the SIM, in a proprietary secure module (such as used by Google Wallet) or in the MTM. Network operators are hoping to be able to charge as much as half a Euro in annual rent for space on the SIM, so the additional competition isn't going to be welcome.
However one looks at it our mobile devices are going to get a lot more secure, and as desktop computing subsides that model will, almost inevitably, become de facto standard.
go-kite et al on Win8,
the point SKS was trying to emphasize at AGC is MSFT's embracing of TPMs in the past was largely an enterprise affair and that Win8 pushes TC demonstratively into the consumer space and when coupled with ARM-TC-Mobile bust the TC-consumer space wide open.
Of course, PRs about Wave supporting WinX are to me just obligatory measures of time. Of course they do. They must. They must say so. So does everybody else in the world of anybody that builds anything that touches MSFT in any way. Sure, it doesn't have dollar signs physically attached to it, but it beats Cnet coming out with a review that says Wave isn't up to speed with Win8 yet or that Wave has not mentioned whether or not they are up to speed with Win8 (which happens to folks that don't announce that they are).
(time to give Wave a rest, see ya after the 10k CC)
Blue Fin, it brings up the point re:WEM
matt, so the AMI-WAVX news is something that is not, was not, and will not be (i.e MSFT-WAVX news). The logic then is that the AMI-WAVX news isn't.
titlewave, SKS stated Win8 was embracing TPMs. It is. It is an important observation. He should say it. It was a correct, proper, responsible sensible thing to say. He would be failing as a CEO and spokesman to not point out that Mr Softy was embracing TPMs with the new version of Win8.