Wave Systems Corp. (fka WAVXQ)

[rachelelise]

scorpio

The amount of back and forth has been substantial this weekend but that is inevitable given the results and the lack fo guidance.

In my opinion, the Seagate guidance about the contract was reasonable and the fact it took longer was not a "lie" as I can appreciate that contracts sometimes take longer than expected to close (actually they almost always do in my work). On the other hand I am far less happy with the upgrade outcome. My take on his comments in the last call were that the upgrades were purchased as he made the comments in the middle of the 4th quarter. I guess the 10's of thousands could not have been purchased at the time but the strong implication was that they were a done deal but the purchase was being made after the calendar year end. The previous breakeven comments had some wiggle room in that they were based on customer projections of bundled computer sales but since there has never been an explanation of what changed, I think one should view it in the same light as the 1,000s of upgrades in Q4.

I bring this up since it materially weakens the value of any guidance tied to numbers and further makes opaque our understanding of just how much progress is being made.

There are many logical projections being made by folks which are further fueled by SKS' comments. Those expectations may need to be adjusted or at least people should be prepared to seriously question them if they continue to remain unfilled.