Wave Systems Corp. (fka WAVXQ)

[wavoid4e]

::sigh::

Ok, public disclosure: I tend to strongly disagree/get irritated with old kids posts. Part of me feels he's just stirring the pot, and I even question whether he owns shares. With that said, I do feel there is a need to have a counterpoint to our effervescent wave-ism talk to help us see some important issues.

I had never really cared much to think about SRA and the PP's. But before I made a wholly ignorant post without doing some research, I decided to do some on SRA. I looked at their market placements dating back to September 200, which they refer to as representative of their services.

http://www.sracap.com/transactions.html

So I researched the companies and I became quite dismayed. Only two of them are trading above a dollar (United American Health Care and Logicvision), while the rest are either significantly below 1.00, pink sheets, been bought out at market cap, or are no longer in business.

SRA's website states " Security Research Associates (SRA) is a boutique investment banking and capital markets firm assisting fast growing public companies, in the small cap arena, with their capital and strategic advisory needs. ... Our banking focus is on working with companies between 50 million and 2 billion in market capitalization. ... Our Capital markets group looks for ideas that are misunderstood or undervalued. Ideas which offer above average returns to our institutional clients – clients who have been doing business with us for many years and represent the kind of investors we feel will be supportive and committed to the companies they own in the long term."

So this left me thinking: what the heck kind of research is SRA doing that indicates to them that these many companies they've worked with are fast growing and bound to be successful?! By no means have these "representative placements" been homeruns in a market sense. UAHC trading at 1.75 today is nothing to write home about, not exactly a corporate el dorado.

And Wave also appears to be their biggest client, with the most frequent placements. Hey, I believe in Wave too, just like SRA, but I am smart enough to see a trend with all of the clients they represent. I hope they're at least getting a great deal with SRA due to this very friendly business partnership.

Old Kid also made me think he was just trying to raise some ruckus by indicating another placement was in place to happen because of the SRA conference. Surely there was nothing to this - just another PR opportunity for Wave, getting the word out there. But I looked it up and after last winters SRA conference, Wave had a 3.5 million placement. I'm not sure why Wave would be participating in SRA conferences if they didn't intend on using them for more placements.

With that said, I'm not against Wave doing more placements: if they have the opportunity to avoid debt by taking on new investors and diluting short term to reach B/E and long term profitability (which I obviously fully believe in!), then I think it's a no brainer. If you're not making enough money short term and the economy is as bad as it is, I think avoiding debt - which can quickly cripple and limit your finances and business expansion - is a must.

Ok, enough of that rant.