Sorry guys, but me thinks there are problems ahead.
Let me preface what is to follow by stating that I was in N.Y. at this year's SHM. I have also been a consistent supporter of SKS. Anyone who knows me can attest to those facts, no pun intended.
I can say unconditionally that I do not think for a second that everyone here "re-evaluating" a second listen through the CC is allowing themselves to be objective. For if they were being objective, there would be more hard questions generated, and less "we'll see in six months" dismissive replies to the few here who have tried to ask some very needed and serious questions.
Facts:
1. SKS has backed off second quarter BE "on royalties alone" that he stated in July. Royalties plus upgrades does not provide a picture of traction, a picture of survival indeed, but should timelines slip then we stare dilution once again straight in the face. Now, with a simple yes or no answer, do we have a history of failed timelines? Every one of us had better factor into the picture another private placement that will help to explain the little if any share price growth we may see from now until July.
Also, everyone here should understand that the very last thing I want to see is our basher community gloating with yet another "we told you so party" (at our expense of course).
2. Asian OEM's have yet to materialize. Wiil they ever? Or does their absence suggest they are going to hold out to the ETSL has been commoditized by Wave as a final act of desperation on Wave's part to expand market share at any loss of revenue to the bottom line. Don't kid yourselves, this may have already happened and indeed would help explain why we can't hit BE on royalties alone by Q2 of 07. BTW, I have yet to hear a great explanation of why we are so woefully below our SKS derived 70% of market share he targeted quite awile ago. Until is see a P.R. with HP (or any other OEMs for that matter) on board I think it is prudent to consider HP a bridge burned beyond recognition. I want to be proven wrong on this one as soon as possible!
3. Seagate revenue stream is more uncertain than what we were told in July. We were told very clearly by SKS that this was to be a very strong second income stream for wave. One million shipped to OEM's is a far cry from 7 to 10 million at 5-15 dollars per unit. One million at say $4 per device is so far below 10 million units at say $10 each that even kool-aid drinkers must admit that the onlt thing left in the glass are a few chunks of ice that Seagate was gracious enough to throw our way. A "massive" 10 million from Seagate should deflate all of you at the piddly 2.5 million a quarter that would represent for the year! Whose kidding who guys! (I am well aware that 1 million drives COULD EQUAL 1 million ETS upgrades) See # 4 below.
4. A poster here asked a very serious question a few days ago. As all of us should be trying to grapple with the notion of how a company strapped for resources gets a million Embassy upgrades accomplished if they need to be activated one machine at a time! A million of anything is a huge undertaking. Please do not underestimate the importance of this yet to be answered question. Understandably, a FDE hard drive bundle at $50 each up front from Dell as a means to provide enterprise adopters with "plug and play" convienience changes all of this. (see # 3 above) How many here view this as a realistic possibility? Have we heard talk that Seagate does not do bundles? Could Dell really tack on $50 or more on these new lines right out of the gate, or would that put them at a competitive disadvantage that they might not be willing to risk?
5. First mover advantage can vaporize in a matter of months if and when a competitor with deep pockets decides that there is money to be made here. I have still yet to see clearly how any patents we may hold can hold off any such competitor. I have read tens of thousands of posts here and elsewhere, so please do not hesitate to bring my lack of technological understanding up to speed on this issue. I want to be wrong on this concern as well.
Opinions:
1. The fog, for lack of a better description, surrounding any revenue from WXP, mobile phones, attestation servers, sign on line, etc.. is so murky I almost want to barf. Let's all have even a shred of honesty about all of these. I will be downright digusted if we discover later that Wave invested our hard earned capital in helping scure an entire industry while leaving Wave as the bus boy to clean up the plates and scrounging for a few left over crumbs for their shareholders.
I do not for a minute think I am the only shareholder who thinks that SKS's comment the other day that "we will view cell phones as just anogther peripherial device" as a Spraguesque way of saying "golly gee shucks it was neato to send Lark to all of those standards setting meetings and conference calls." Oh, revenue? Well, we had hoped that by being so cooperative with our time and expertise that they were going to give us a peice of the pie. Ooops.
2. Reality suggests BE announced in the Q3 CC next NOVEMBER!
EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEK!
After all of these years, delays, and just wait another quarter or two statements (TTT and the like), we could easily see only 6-10 million in profit for what was supposed to be a breakthrough year. Will anyone here accept this investment at $4 a share a YEAR FROM NOW! That will simply be unnaceptable from my vantage point. (I will jump for joy should we see ten by NEXT x-mas)
3. Would every poster here who uses KABOOOM please be banned for six months to help restore sanity,reality, and honesty to this board?!?!?!
I have come to view Go-kite's view of the future with regards to share price to be the most rational until further notice. We need evidence of REAL traction (P.R.'s), not pilots, test drives, first dates, love notes and the like. With every passing week and month Wave increases the likelyhood of being marginalized into the perpetual small time role player. I have very little doubt that over an EXTENDED period of time that $10 a share is going to happen. But I am seriously thinking that 20 or more (kaboomish becomes Kerplopish) may only occure if and when there is a billion conncected devices (2010 or therabouts). Even then, money will only flow IF Wave receives some value added payment for yet to be defined and determined services to those TPM's that they gave away for free, and whose ETS upgrades were over time commoditized down to pennies on the dollar (I remind you that SKS himself has aluded to this commoditizing of our baseline IP).
6. The real tipping point people need to redirect thier analysis to is the possible point at which the commoditization of these products occurs before Wave Systems can extract a ROI for its investors and a tad bit of real economic profit BEFORE competition erodes those profits away.
7. Repeat of #6 above!
Conclusions:
1. I want to be dead wrong in the worst way.
2. I can accept WAVX as a marginal player in TC so long that those expectations are communicated openly and honestly with respect to our market share, needs for capital, and role in the larger fabric of TC.
3. I will sit tight and watch VERY closely for evidence of success over the next six months. I also will accept without hesitiation the fact(s)that will demonstrate a time frame that we are still 18-24 months away from being taken seriously by Wall Street.
4. Steven, for goodness sakes already, SHOW US THE MONEY
5. I believe Snacks, Jas, Awk, Vaca-house, Doma, Ispro, and my good friend Weby all have this community's best interest at heart. Please do not lose sight of the fact that we have all been here a VERY long time, and it is possible our desire to be right can impact our ability to objectively view this emerging market.
6. Malagula, I need a drink of Kool-Aid in the worst way. :)
Ambler
