ncbaker, these numbers ... $10, $2.5, $50 etc seem to lack mooring.
If one tries to tether SP to some sort of metric other than the agony of the past then it may be useful (and perhaps you are) to invoke metrics like P/S or P/E.
Generally the home runs roll in the P/S of 5-20x (a big range being given on purpose) and/or P/E of 20-100x (coming later generally as true GAAP earnings emerge.
Revenue (sales) are well below what they were when various historical price points were hit. Just getting back to previous revenue levels might reasonably get back to previous SP, but not necessarily. In the Dell then GM then BASF times P/S managed something like 10x, a rather bullish ratio, but the company was Cash Flow Positive - not a trivial point.
Now, if something happens in the next couple weeks that give a clear statement of sudden cash-flow positive status, then sure - $5 is rationally on the table. Last look the company is trading at P/S of 3.14 (it was sub 2 for some time). It is, in my experience, remarkably rare for a company to trade at P/S 5x and better with cash-flow and balance sheets like Wave's. Its o.k. for cash flow to be bad if the balance sheet can support it, a strong balance sheet provides runway which gives comfort to speculative investors. Wave Has No Runway. Perhaps they dumped a couple million shares from the ATM in the last week - that would buy some runway - but many investors are going to need to see an 8-K that allows them to infer cash flow or a 10-Q that shows runway. There wont be a 10-Q until August (the opportunity for an ATM windfall to realize itself on a balance sheet and indicate runway).
A SP of $5 requires PS of something like 8-10x. It is very difficult to imagine that happening with a balance sheet that (as is) cannot get the company through the next quarter.
I appreciate what you are saying, I question the timeline.
cash-flow and balance sheet are the keys to unlocking PS ratios north of 5x. Coincidentally, 4x-5x corresponds to a SP range which technically (in a chart fashion) Wave has in the past held for protracted periods, a sort of wait and see price range.
Personally I speculate the SP to draw back some in the next week, towards 1.65-1.85, with the week after that being the opportunity for a news cycle driven rally into that P/S 4x range in the mid SP 2s. Medium news could do that.
It would be stunning to clear PS 5x (north of say $2.85) in the absence of some rather remarkable news that allows one to make pretty clear projections about the Q2 report. Not sating it can't happen, but I don't recall many examples in any company (post bubble), WAVX included.
And then there is the Wavoid, I see the Wavoids as the equivalent of a large warrants overhang seeking to scratch out a return at every opportunity. A lot of Wavoids are a billion years old, have held shares longer than their adult children have been alive, and I suspect lack the patience to invoke holding out for some sort of historically justified SP. I expect Wavoids to be a source for shares, not a sink, and while historically Wavoids have been sink (putting in floors on weakness) I believe Wavoids will routinely sell into rallies.
If an unsolicited tender for WAVX was made at the $10/sh you mention were made, the company would be taken over in a heartbeat.
But hey, opinions are a dime a dozen, and while the tea-leaves point towards the potential for a more meaningful MU announcement, I can't see it blowing the place up.
Note: SP $50 is 2.25bn, the type of valuation driven by sales north of at least $100m and or earnings north of at least $10m (being very generous on both fronts). That just can't happen before 2015. Solms is proud of 19% percent growth in a slim minority segment, you speaking more towards 500% across the board all in the face of a disclosure that Dell is going away.
The above content is my opinion.
AI
