orda - NASD deathpool is well underway.
today was the 29th (of 30) consecutive trading days where the closing bid was in the pennies.
monday seals the deal & an NASD delisting notice will be delivered to Lee next week. Wave will then have to juice the closing bid above a buck for ten consecutive trading sessions (during the next 90 calendar days) in order to a_void the removal of wavx from the nasdaq.
of course, the NASD has other metrics by which they can delist wavx immediately (e.g. market cap), though i suspect that Wave will appeal to NASD w/some song & dance to stay the effect of going to the bulletin board. howiever, wavx was already delisted once before & now has SO much baggage that i suspect any appeal would fall on deaf & unsympathetic ears ("fool me once, shame on you...")
nevertheless, Wave has a serious cash burn gluttony problem & a voracious appetite for funds (hey, non-performance related guaranteed bonuses ain't free!) & toss in $100K here, and a $100K there for GreatStuff like "offices" near the Atlantic coast in "strategic" locales such as Orvault France & you have a severely bloated SG&A.
as such, Wave will likely continue to float regular deals w/sharks in the Caymans, Bahamas, BWI & BVI, etc. in order to keep the trough full of the green they need.
SO, you have an almost guaranteed constant sell-side pressure for months & months & months to come (much of it from Wave itself!) & the most recent Q rev was $6K, which if anything near constant in future Qs, means an almost 100% burn as it relates to all expenses (no rev offset).
back to the sharks for a minute... these are not the kool-aidkinda krew. they will short wavx w/impugnity & by virtue of the Berlin listing, they can naked short it off-shore (&/or even use US MMs - maybe BRUT?) & literally print counterfeit electronic shares to their avaricious delight.
SO, now you have Wave as a needy seller of paper burning millions every Q (w/a stated need to ramp costs in future Qs per SKS), compounded by the activities of the off-shore buyers as two major market forces that preclude any pps increase.
now add in the fact that Wave has a lengthy history of unsubstantiated fluff that either is never heard from again, or, generates little or nothing rev-wise. that results in the yawn effect on any news you have been witnessing the last few months.
now add the SEC investigation. that forces Wave to be much more cautious (presumably) about anything they disseminate publicly (notwithstanding certain void elders earlier curious statements from today) & certainly adds to the cost structure to some extent.
now throw in a baker's dozen of civil claims & the various well-funded C/A firms that smell blood in the water. legal fees cost Wave approx. $290K last Q alone & the cases haven't even really begun rolling.
now let's suppose that Wave does settle the various claims. IMO that won't get done for less than $5M & also IMO it may involve another issuance of shares as partial consideration. O/S will quickly be pushing up against the recently increased A/S.
now add in the fact that the TC uptake is incredibly more tepid than any void will publicly admit & Wave's entire rev-generating biz model depends specifically upon TPMs in high volume deployment (tens of millions of units per year, minimum).
add to that the fact that MSFT is taking their sweet time developing an OS which compels the use of any TPM (aka SSC in softeespeak) & the anticipated release dates being pushed out into 2007 (or 2008 more likely, based on MSFT's long vaporware history).
add to that the stated fact that Wave's newest iteration of licensing requires Wave to push through much of their own sales (presumably the higher margin recurring rev services) using their own marketing coin.
add to that the near certainty that Wave will be receiving the NASD delist notice next week (which further dampens any buy-side interest).
add to that the fact that wavx has been treading water & has recently been doing almost neglible volume which brings w/it consecutive downticks any time any seller of any real size wants out.
add to that the number of voids' "trading shares" that are now looking for an exit after the recent conference hype landed w/a big thud. lots & lots of so-called "trading shares" looking for the exit will cap any future rally, compounded by off-shore sharks shorting to lock in ROI gains, etc.
add to that the minority of voids who are likely ready to bail on wavx once & for all (like howardjoel did recently only to foolishly return IMO) & all it'll take once in a while is for one or two voids w/decent sized so-called "core" positions looking to cut their losses to put major pressure on the ask (depending on how prudently they break up the position/s for sale).
you now have a recipe for $0.50 or lower.
what other methods does Wave have available to get the pps up above a buck?
& don't forget, the institutional holders are most likely prohibited from holding delisted securities, so now you have another heavy sell-side pressure if they don't keep wavx on the Naz -- again in a meager volume trend.
a Reverse Split seems to be the only viable option to keep wavx listed IMO (& it reduces the O/S, which keeps Wave from having to get you to approve another A/S increase).
you may post in rebuttal that there are additional INTC MBs, etc., NSM is coming (someday), ST Micro, etc., etc.
problem w/those "solutions" is that the INTC & IBM PRs that started this final spiral downward are now over a year old & now we're back to $6K in Q revs problem.
problem is w/any R/S, it is only a quick fix & there are retailers out there just waiting to short wavx, on top of the likely off-shore stuff already unfolding.
it will literally take a miracle to save Wave...
the Juggler simply can't keep all those balls in the air indefinitely.
& incidentally, it is the wavoid block of shares that is one of Wave's few strengths. prolly > 20M shares being held until pried from the cold dead hands of their owners that actually slows down the spiral a little.
100% JMO.
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