When I look for differentiated businesses I ideally look for:
-patented technologies
-businesses protected by scale or scope
-unique products/designs that can't be replicated easily
Typically, these criteria are hard to find, especially in technology. An innovation is made, a number of competitors quickly follow, prices come down and margins fall.
In Wave's case not only is there a question of market size, but of value creation. A centralized password management system is really not that complex a piece of software. The TPM itself is complex, but that's a standard -- managing the admin and back-up of the password for TPM or other add on utilities is fairly low value or easily replicated by anyone who saw enough of a market there to mess with it. Right now the market seems to be about ~$800K/quarter.
Again, everyone is entitled to their own opinion about the growth rate, Wave's share of that market and the ulitmate profitability on that share. I don't see it. And the posts trying to "out" me are silly. I'm personally short this stock and my comments are my own, not my employers. I make long and short investments both as my profession and for my own account. If you want to call me and debate Wave as investment feel free -- my cell is 917-407-7971. Otherwise, I'll try to stick to factual debate and would appreciate not being bullied or harassed for my projections of Wave's future value.
