appropriate redaction 24
you can characterize me however you like, but it was wise of you to pull the snipe about NYT v Sullivan. SKS has "thrust himself into the vortex" & is a full blown "public persona" (as it relates to all things Wave). as such, the "actual malice" standard absolutely applies. my posit was that absent a demonstration of "actual malice" there is no cause of action against a merely negligent reporter by a public persona.
& even if Sheng was negligent, it is worth noting that only those well-schooled in Wave were not confused by any of the releases. the IBM PR was completely "fluffy" (our stuff works with their stuff), but the rest of the world misconstrued it. and considering the standard for securities claims is typically one of a "reasonable investor" & not one of a "reasonable wavoid" there remains a perception problem IMO.
i wondered about MW's allegations related to SKS sales of WAVX in January & posted as much, but then it hit me that SSPX sales occurred on thoses days. looked up the form 4s & posted as much (might have edited it out, but i was also the first person to post that the MW allegation re SSPX was erroneous, even called it "slop.")
as you tend to write in generalities when you snipe, can't be sure to whom you refer, but i certainly don't purport to be an "investment expert" but also haven't seen anything which indicates that the recent PP share registration was declared effective.
companies often issue a PR when the SEC approves the registration & considering the list of headlines under "WAVX" one would think Wave would love to issue such a PR. absent that, it seems dubious to contend that the regiistration has in fact been declared effective. the S3 notes that it is for a "proposed sale" & that the timing (if any) of sales will only occur after the registration has been declared effective.
also, my speculation that the PP had a performance clause *was* correct & the loan shark "vig" starts to accrue in 13 days or so (as was my call in late '03 that MW would be here sooner or later). same goes for the call about the shape of the adoption curve being much flatter in the early stages than the wavoid predictions (at least 2 more quarters of less than meaningful revs -- could be Q1/Q2 or Q2/Q3 -- the S3 language is ambiguous on the issue). meanwhile the cash burn & distractions have increased greatly & in no small part as a result of things that have zero to do w/ramping up (which btw, when SKS backed off earlier breakeven projections, did you really accept that their forecasts had failed to incorporate increased SG&A costs, or did you conclude that they knew full well about the rise in variable costs & it was more a function of a slower adoption rate?)
who cares though -- no matter how many times pessimists are correct, it will always be contorted & invariably reduced to a personal thing in the weirdo world of wave, or a paranoid conspiracy theory (e.g., "if you aren't fervently long WAVX, why are you here?"). apparently only wavoids can see reality -- not CNBC, not Barrons, not Smart Money, not the NYT, not the SEC, etc., etc.
fact is that if Wave had ever given even a modicum of consideration to the benefits of good corp governance, there would be far less to criticize.
instead, there are things like the fmr CEO dropping > $600K to buy out his father-in-law's bankrupt business (for his wife) when just weeks earlier he had his "loan" declared uncollectible & the public company summarily booked a reserve for 100% of the amount due & owing (never mind that he holds > 1M shares & has been a consistent seller for years... as the spraguespeak goes, it just wasn't fair to ask the fmr CEO to repay the loan b/c it might have caused him to sell stock @ a low price (& presumably he knew that the Intel announcement was in the offing anyway, so why not just wait until the stock popped & then dump?).
as to your rebuttal of the $250M being "wasted," i would agree in part (& have noted as much more than once) that it is not 100% waste b/c getting to this praecipice certainly has significant intrinsic value. however, the market has currently appraised that value at roughly $107M, so the discount is on the order of something > 60%.
& when one considers things like corporate apartments in Manhattan & Paris, ridiculously disproportionate non-performance bonuses (exceeding Wave's total top line for years & years & years), option strikes set at (or near) 52 week lows, covert cash-grabs like "Founders' Shares" & unjustly enriching "loans" conveyed on the eve of Sarbannes-Oxley & on & on & on... one must certainly ask what portion of that > $250M was irrefutably "wasted."
Mig, IMO your commentary is appropriate. the class will likely be certified (something like 75-80M shares churned in the first week of august -- so there is an abundance of bagholders who bought in reliance of the ambiguous PRs & subsequent price action) & a settlement will presumably be reached in the high six or low seven figgers, lawyers'll get paid & S/Hs will get a neglible award (IMO).
the allegations do contain some serious "slop," but if the claims included causes of action w/allegations of self-dealing & breaches in fiduciary duty over the years, IMO it would be a very different matter.
one thing that is undeniable -- CFO Feeney never paid back his "loan" & questions remain as to the timing of certain unreported option-related insider (employees & PJS) sales. if it does get to trial, better hope PJS is not called as a witness b/c if it played anything like his remarks in Smart Money's "Wave of Delusion" article, it might smack of wholesale indifference.
IMO it is impossible at this point to conclude that the SEC will find "nothing," but my view is a jaded one (duh, right?) where almost every losing trade i've ever had w/WAVX was the result of "trusting" the rhetoric from Lee (all one needs to do is look to the spikes preceding almost every CC & the resultant sell-offs when the parsed spraguespeak resulted in revs being pushed further & further out).
Snack, you wrote to Zeev about things like "vulgarity" but the very title of the post included a thinly-veiled vulgar insult?!? plenty of wavoids practice various ad hominem techniques day after day... yet those who disagree are afforded a *much* shorter leash IMO.
anyway, WAVX is up a bit, which prolly mollifies some concerns...
gotta write a brief, so don't miss me too much!
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