Mark Petrov (sp?)stood up at the shareholders meeting and correctly pointed out the influence that Naked Shorting has had on small companies like Sunncomm... you can thank a large portion of the dilution we've suffered over the last year to the effort by some Heddgies to depress the share price. They do this knowing the company is raising funds by selling shares and so must sell a LOT more shares at .05 cents than at .30 cents. This in turn means the comapny has to authorize a LOT more shares to sell and this depresses the share price...a nice circular cycle the Hedge Funds have become master at triggering... it's usually referred to as a death spiral only in this case, revenues are beginning to ramp and so the need to self finance will ultimately disapear.
MVSN is suffering the classic problems that often confront arrogant market leaders (Apple?) where they fail to identify potential threats in the arrogant view that they somehow have the golden keys to the wash room... unfortunately for them, it is beginning to look more and more like Sunncomm may pull off the improbable feat of a clean sweep with the record labels.
As Peter pointed out in the ASM, the first customer is going to do the most due diligence and qualifying with them will be the toughest test the technology will ever receive. Assuming we land another major OEM, which I expect shortly, we will suddenly go from one OEM that could be dispelled as a fluke to two and that then suggests a trend. Nobody wants to be the first, but likewise nobody wants to be the last... now that BMG is getting serious (finally!) with their rollout (yes Virginia, they're rolling out worldwide - 750 million CD's per yr)
You might also folow this logic chain... if you're BMG and you're paying for copy-protection on CD's, then WHY would you tolerate online services (Apple iTunes, Sony Online) selling unprotected versions of your song therefore rendering your copy-protection efforts moot? My guess is you won't and you'll demand that those services use Secure Burn to ensure that your intellectual property is being handled appropriately.
DarkNoise isn't as far along by now as I would have hoped, but Eric (our tech guy) seems convinced that they can solve the final 20% of technical issues remaining. DarkNoise is the Holy Grail as far as copy-protection goes, but hey, BMG is happy with what we have already... happy enough to begin a worldwide rollout. DarkNoise then would be icing on the cake.
Peter pointed out that is has taken nearly two years to qualify and be used for real at BMG... even assuming MVSN can eventually develop a product the labels would want to use, it would appear we have a substantial lead time wise... perhaps as much as two years, but certainly a year at the least.
I think we have a very realistic opportunity to show 0.10 EPS next year and with a conservative P/E ratio of 20, that would net us a $2 share price. As Petrov (sp?) pointed out however, Naked Short covering has led to some pretty wild rides, in one case he mentioned, a 2800% increase in share price once the short squeeze was on in ernest.
In the short run, I would not expect to see the shorts go away easily. They will use every trick they have to discourage shareholders and lower the share price. I really do not think they will go away until we broach the .50 cent level and that will be one immense battle as will .20 and .30 levels.
Good luck to all... it's been a long wait, but it would seem it may have been worthwhile.
AI
