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waverider, I think
we'll be seeing $3 handles pretty soon.
aleajactaest / you ask
Do you know how Wave's pricing works if a single individual is assigned two pieces of trusted equipment. Are there ERAS discounts in those circumstances? Or is it based on equipment seats only.
Really?
TC is all about endpoint identification and measurement, not enduser. The user identifies themself to the digital devices, but then the devices and the network do their security dance using the methods of TC. So each device needs to be seated. Not the person.
Short Interest at highs
across the market.
Borrowed shares, an indication of short selling, climbed to 11.6 percent of stock last month from 9.5 percent in July
http://www.bloomberg.com/news/2011-10-10/short-selling-rising-most-since-2006-as-11-trillion-is-erased-from-stocks.html
Lugan, also there are
new longs learning about TC and Wave and buying in.
dig / So the current
state of the world is it will cost $2 trillion to stabilize the European banks (and that's the real issue here, not the Greeks or the rest of the PIIGS), compared to Wave who may need to raise another $10 million. I certainly think one of these investments is sane and leads to the betterment of mankind. The other is flushing money down the toilet...
Interesting Trading
article in light of what happened yesterday to the broad market.
Buchanan: With High-Speed Trading, Market Cannot Hold
http://www.bloomberg.com/news/2011-10-05/with-high-speed-trading-market-cannot-hold-commentary-by-mark-buchanan.html
cartoon - that would be a great explanation. Lets hope for
some news by tomorrow.
waverider, I prefer to
see a strong, gradual price movement. If not that, an upward jump on public news. I don't like unexplained jumps because sometimes thay don't turn out well.
I don't like the looks of this....
Blue fin, the share price is already
moving widely on just a couple hundred thousand shares, I think a buy interest for 10 million will have a strong and lasting upward influence on the share price!
To think that it used to be called the Not Say Anything agency. Looks like they've become more outgoing since they've given up the moat theory of data secutiy.
awk, so what is required
for the TPM non-touch activation and who is preparing it? Sounds like an bit of software code that Wave could provide.
AZwaveman / as
it is, due to poor record keeping by the brokers, it is entirely likely that both buyers of the same share will get a vote. The effect will be reveresed through proration of votes.
But most margin agreements have language to deal with the situation such as that you may subordinate your rights to a vote if you are on margin. But it's rarely enforced. There was a controversial, large takeover vote in Canada where a large pension plane wanted to vote it's shares but was prevented from doing so because they had lent their shares out as part of a revenure enhancement strategy. They became much more vigilent about the shares they lend following that.
tkc / what would
politicans do if their plans for taxes and spending were required to follow GAAP or IFRS?
There would be a lot less grand standing and position taking and a whole lot more truthful cooperation. For the benefit of us all.
AZWaveman / at least one of
the points in the article is incorrect.
The author wrote:
There is another problem with short selling: the short seller is allowed to vote the shares at shareholder meetings. To avoid having to reveal what is going on, stock brokers send proxies to the “real” owners as well; but that means there are duplicate proxies floating around.
The way it works is the person who buys the shares from the short seller is a legitimate owner of shares and gets to vote the shares they bought. The short seller has to borrow shares from someone in order to deliver into their short sale. The short seller borrows the shares through a broker from someone who is on margin. If that person has a margin account with the shares in question, then their broker is allowed to lend these shares to the short seller for deliver to the purchaser.
What should happen is the margin player loses their vote on the shares in favor of the person who unknowingly bought the shares from the shorter. Or if you insist on claiming an equal right to vote, then the total votes have to be prorated.
The point is the "short" never gets a vote.
wavxmaster / this is
the Hotel California of investments and websites and you can never leave. Or didn't they tell you that at check in time?
tkc / the number
I put forward is the acquisition value Wave places on the new personnel. This is different than the salary that an employee earns.
The cost of hiring and training engineers and sales people in the world of secure computing can be quite high, if such people are available at all. A search firm will charge 35% to 50% of an employees total compensation in order to do a placement. The Safend personnel are already trained and bring more to the table than the typical fresh hire. So if Wave foresees the need to add talented and trained people because of a rapidly growing order book, then there is value in hiring them through the purchase of Safend.
xxxxcslewis / I had a similar
thought when I put this value breakdown to the purchase.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=67350409
Personnel accounted for about 40% of the purchase price in my estimation.
dig / a Wavoid
rally it may well be, but that's not inappropriate. The implicit preference of the VC's for Wave and trusted computing over old school is a massive confirmation of the correctness of the strategy Wave has been following.
The news out of the NSA was all good, especially the indication that the NSA was eager to get deployment underway within the year for the DOD.
Risk reducing news plus revenue increasing news should lead to a price increase.
The trick will be to deliver contracts and headlines on a regular basis.
Escrow56 / I don't
know the answer to that. But if a VC really wanted to reduce their exposure to Wave they could easily short Wave common shares against their holdings of restricted shares. I tend to think they would be unrestricted as 1. there is no desire or need on Wave's part to keep the VC's as shareholders and 2. unrestricted shares are inherently more valuable than shares with restrictions so Wave has to "spend" fewer shares to buy Safend.
Maynard / that may be a good reason for the current actors to move quickly!
The leaders, politician or government, will want to make sure it gets done.
dig /I don't believe
the dod has such tight central control when it comes to individual purchase orders. If the edict comes from on high to jump to trusted computing, then you could well see near 1000 individual jumps of 10,000 seats.
Mig / There is certainly that
chance, but I think that big enterprise customer will lead the way and they have many sources of that can lead them to Wave. Consumers will take want is offered once the market standards are well entrenched.
Mig / that's the first critical
element of the trusted environment and it's important for Wave to be active in that space.
But Wave's greatest growth opportunity will occur once the trusted environment is widely adopted. Then we will see the emergence of trusted execution of applets for which Wave owns a few key patents. When there are a few billion pc's and smart phones and tablets and GM Onstars etc. doing a few 10's of billions of transactions a day, the value of Wave's IP will generate individually tiny but collectively massive cash flows.
alea / you wrote that
I guess what I am saying is that we don't know that the VCs are disinterested in Wave's opportunity and their only motivation is to escape Safend
I tend to agree with that conclusion in the sense of what was the greater motivator.
However, I reviewed the trading volumes of Wavx shares for the 10 day period used to calculate the share payment. The volumes are not statistically different from recent trading periods. So I conclude that it can't be said that most of the shares were sold by the VC's. Remember we are looking for about 5,000,000 shares spread over 10 days for all VC's to sell. However, on the first and last days there were small volume spikes and on the final day, over 400,000 shares sold at the closing price between 4:00:03 and 4:32. So I think it's likely that one minor VC partner wanted to liquidate their shares.
So I'm going to guess that Intel VC is still in. And further wild conjecture would be that it was Intel VC that drove the deal as they could easily be the largest investor and the most in touch with the quickly evolving world of TC.
dig / you
are quite right that non-parallel lines eventually cross, so an extraploated loss is not baked in the cake.
But your exercise does a good job in showing that SKS would not have done this deal based upon the historic revenue growth path of either Wave or Safend. Clearly, the reasons for the deal are not found in the past, but rather in the future of anticipated revenue growth.
My guess at the turn of events:
When the VC partners saw the flatling and falling revenue numbers of Safend, they decided to sell, even though it meant taking a loss on their VC investment to date. They called their customer and most likely buyer, Wave. SKS could have said no thanks, but he needed the IP he was licensing. So he probably said he was happy with the current licensing agreement, but the VC's said the doors are closing in 90 days. Then he may have tried to buy only the IP, but the VC's probably weren't selling at a reasonable price. Buying the whole company met the exit needs of the VC's and gave management shareholders a place to continue their work. But since SKS didn't want the whole company, he got it at a much lower price than the starting offer.
dig / you have shown
that if you extroploate on a straight line basis from a losing earnings position, that you will end up with an extrapolated loss. A bit of a tautology there.
I think we are all anticipating a significant up turn in earnings growth. I think SKS is also anticipating the up turn, or else he wouldn't have bought excess resources in the form of Safend. He could have purchased only the IP or he could have continued to license it.
Instead, he liked the company so much, be bought it!
Safend Pricing circa 2005
from
http://www.safend.com/1223-482-en/In%20the%20News.aspx
the final sentance reads:
Safend Protector, with Safend Auditor, will be available in September (ie 2005) and cost $32 per seat, with volume discounts.
Interesting that they sold over 3,000,000 seats given a not inexpensive price point. But for these to jive with Dig's revenue records, the seat price had to be more like $10 - $15.
So there is the definite possibility for seat migration by some legacy customers to the superior Wave seats at a 4 times greater price.
Why did Wave acquire Safend?
The acquisition provides a number of clear benefits and synergies for Wave:
- Expands Wave’s product portfolio in complementary areas – six discrete endpoint security products
- Augments Wave’s existing capabilities by adding MAC support for encryption, A/V detection and remediation for removable storage, mobile device data leakage protection and several security certifications.
- Adds 2,600 customers to Wave’s base of customers – providing cross selling opportunities.
- Adds strong network of distributors, reseller & VARS to complement Wave’s OEM channels
- Expands Wave’s geographic footprint more broadly into Europe, Israel, South Africa and Asia
- Expands Wave’s direct sales force
- Broadens Wave’s engineering team with a strong team of security experts
- Augments senior management & marketing capabilities
- Expands customer support function to Israel – covering more of the globe
************************************
So, taking Wave at their word, how does the above add up to $12,000,000?
Taking a stab at it, I say the technology and IP is worth around $1mm as the market is moving to hardware and SEDs. It is worth more to Wave than anyone else, but still only around $1mm. Of course, Wave could have tried to purchase the IP on a stand alone basis if Safend was likely to be shuttered due to lack of funding. So why the other $11mm?
The customer list of 2,600 customers with 3,000,000 seats may be convertible to 3,000,000 wave seats. Profit on that conversion is about $120,000,000. Discount that a factor of 5% and you get $6,000,000. This includes the value of the resellers etc as their value is reflecting in the customer list.
Personnel numbers 70 people with direct experience in Wave's field. Wave has grown by about 70 people in the past year already and is looking to hire about 15 more. So the majority of these people are of value to Wave. Assign a value of $70,000 an employee to shorten the hiring and training cycle and it adds up to $4,900,000.
Adding the three values together, I get $11,900,000. A rationalization to be sure.
But here's the point, Wave bought Safend not because of what they are doing now, but rather for what they can be doing for Wave going forward. This tells me SKS is highly confident of a strong upswing in business growth in the near term. If so, the next 6 months could be the bend in the sales growth hockey stick.
player / one of the reasons given for
the purchase was to obtain contacts with the 2,600 customers of Safend. To me this means the sales and sales engineering staff are staying on board on top of senior management.
zen88 / keep in mind that the
"they" in all of this is probably heavily weighted to the venture funds due to their share holdings. These firms could invest directly in Wave shares through market purchases. They haven't been, given lack of evidence in Wave share holder data. Thus it is more likely that the venture firms think they will do better combined with Wave rather than thinking that Wave is going to $50.
But the individuals who work for Safend and hold shares would also have a big say in the decision and they undoubtedly must have liked the deal to okay it.
I certainly like it, and it definitely looks more promising then Ishophere.com.
Safend has more than 2600 customers and over 3M seats deployed by multinational enterprises, government agencies and small to mid-size companies across the globe.
So a company with 3M seats deployed and 2,600 customers sells for $12,000,000? Must be the cheap seats....
Trust
It's usefull for me to step back from the details of the quickly evolving TCG space and to think about what's going on in the broadest terms.
The goal of this whole initiative is to establish a bullet proof systematic trust environment. To create this environment you have to establish trust, maintain trust and then eventually make use of trust.
The TPM is the hardware element that allows all of this to occur. It is the root of trust and establishes trust through the secure storage and manipulation of encrytion keys.
Products such as print readers, SED's, ESC and WEM are used to maintain and extend the trusted environment beyond the TPM. TXT and virtual environments within self healing hypervisors extend the environment even further.
The truly big payoff will be when we are able to leverage the trusted environment. The initial products in this space will involve the secure execution of applets. But this will only be the begining and it is hard to foretell where the process will end.
Wave established the first TPM step in this process and currently is the leading light in the second step. It very likely will be central in the third step as well given it's leadership position and product evolution. I think I'll stick around for the next 15 years to see what happens.
Wildman / It
appears that MSFT is limiting it's exposure to TPM's to the local environment which leaves the enterprise wide system concerns to Wave. Having used Dell's control point for a year now, I don't see how MSFT would meet the needs of Dell's custmers and therefore Dell. Dell would save $.50 cents a PC to drop Wave but would gain a world of worry of how to fully Wave's functionalities in SED management and centralized TPM management.
MSFT might like to do more, but no one else wants them to. So they won't.
And Wave has more to offer Dell yet in linking securing all enterprise smart devices. Dell won't drop Wave because there is no alternative to Wave and Wave is pricing the software at a price point that creatres a barrier to entry for anyone else.
And then there's that patent on apps that Wave owns that should prove valuable.
wildmanw262 -
Those are my thoughts as well, which explains the current share price region. However, if Win8 goes as all here hope, then the astute part of the market should start catching on about 6 months before and there should be a modest upward performance in the share price from March of next year into the Win8 launch. As seen with my rose colored glasses.
mjan
then who else has paid out $500,000,000 to do so? It wasn't the ghost of Adam Smith.
jester / why
why in heck Dell has been rolling those TPMs into the market all this time. Perhaps MS was paying Dell to do so all along.
Not just Dell, but all others involved in TPMs.
You need to change your letters from MS to NSA to find out who's been funding this unrequested deployment of $500,000,000 worth of TPMs.
DD,
I have configured my Dell E6500 to use my fingerprint to authenticate for both the bios and windows. Only one fingerprint read of 3 seconds and no password typing. Use ESC to set it up.
Wave's Partner Dell
Dell Sees PCs Poised for Sale by HP as Ticket to High-Margin Service: Tech
http://www.bloomberg.com/news/2011-09-08/dell-sees-pcs-poised-for-sale-by-hp-as-high-margin-ticket-tech.html
Interesting snippet:
In smartphones and tablets, the company plans to augment Microsoft Corp.’s Windows and Google Inc.’s Android software with its own security software to keep corporate data walled off from users’ personal applications, a move to woo cautious IT officers.
dig / a
p/e ratio of 25 supports my numbers and a price to sales ratio of 2 supports yours. Let each decide on their own what to think.
dig / you're
off by an order of magnitude. Try 100mm.
Or, more likely, maintenance on 500mm seats