Ispro, I'm talking about the support of the stock price at $2. I assume that was being affected by a stock underwriter in the public market for the last few months, presumably based on some term of the recent issue. The price movement and volume (ie the lack of any) was obviously unnatural during this period. Prices don't stay that flat for that long without a large-scale process being behind it. It appears that process ended yesterday.
As regards Wave breaking even in Q1. First, a note of caution: I am not one of those who is measuring breakeven as THE way to understand if Wave is successful. If Wave were to make revenues of $50 million and $200 million for the next two quarters [this is a hypothetical and not a prediction - usual reuse rules apply], and lost $5 million in each quarter, I would not be perturbed. I would expect Wave to raise equity to fund its progress. I would also expect a much higher stock price. So breakeven - which is the new mantra of the boards - is only one measure as far as I am concerned.
Okay, second. In this context, what are my expectations re cash flow breakeven? I don't really have any. It depends on two variables: growth of receipts; and growth of payments. Even if you argue the first will happen, you still do not know how Wave will choose to manage their outflows. As you know, I am a proponent of the successful launch of ETDM and its attendant architecture. On the other hand, my judgement erred in a very fundamental way about ETS succeeding on a standalone basis. So take my opinion with a grain of salt. Others have been more accurate than I have been. Given that, if Wave manages its growth with a view to breaking even, and we prove right about demand for ETDM, then I'd hope the company can break even sooner than Q1.
Third. Since Wave just raised money sufficient to carry them through the middle of next year if revenue growth is only modest (and assuming costs are held in check), it would not be unreasonable to guess the company calculates it may well not be breakeven by Q4. There are other, face-saving theories about the funding, sure, and the puffed toad idea makes some sense. But in fact, I still believe the company didn't expect much of anything to happen on the revenue side until at least the end of Q3 and that they remain very uncertain about uptake, in spite of the optimistic bluster.
I'm really only interested at this point in the fact of things happening at Wave, and not the theory of it. Which is why, before posting on a regular basis, I'm awaiting quarterly reports and/or surprises to see if anything is stirring. Let's hope strong demand is present. Early signals seem to imply it is. Which is good news.
AI
