Wave Systems Corp. (fka WAVXQ)

[dig space]

kaleid, I completely agree,

but that agreement certainly does not forbid me a little rant ...

so ....


These are crude numbers, but they support the opinion (IMO).
These numbers are the results of math, not statistics, presumably making them largely irrelevant to some. I, however, am oddly fond of math.

In 2008 Wave performed equity financing to the tune of 10.75 million shares bringing $3.96 million into the treasury. That 10.75 million shares represented something like a 15% dilution to the ownership of WAVX investors. I was not a WAVX shareholder at the time, finding myself instead choking on a furball.

Of that $3.96 million dollars, just under $1 million was used as cash compensation for two people (the only two listed in filings). Cash compensation of these two individuals represented just over 25% of all the proceeds of equity financing that year.

More bluntly, non-competitive bonuses that year alone represented $1.17m shares or 1.4% of today's current float. To grant similar non-competive bonuses to say, the CEO of APPL would be to scoot a cool $4.5 billion to that individual for a lil New Years Cheer.

Again, whether this is rational is strictly a matter of opinion, no amount of statistics will change that.

One can argue e.g. that it is rational that 6 US citizens (Waltons) hold wealth equal to that of 100 million other US citizens (the bottom 30%). One can opine that such is the rational product of a meritocracy, that without such opportunities The 6 would have moved to Sweden or Bulgaria and that statistically, the combined value of the output of The 6 is indeed greater than that value of the combined output of the aforementioned One Hundred Million others. But it really is not the realm of statistics any more than calipers being the appropriate tool to determine if the Holiday Turkey is done. For that, a thermometer is appropriate, and on the former opinion is that which rules the day.

It is my opinion that a rational glance at WAVX compensation 2000-2008, equity financing, dilution, and revenue paints a clear picture of irrational compensation. One can fairly hold the opinion that different compensation strategies would have resulted in a flight of executive talent/vision/knowledge to Sweden or Bulgaria or Mobile Armor or Credant but such an opinion is no more statistically supportable than mine.

(None of this is meant to imply whether or not the recent BoD addition is a good thing or not, I really have no opinion on that as I see the BoD as a hood ornament, statistically speaking.)

(I agree with alea’s notion that things look rather bright for WAVX investors to realize appreciation for the rather expensive education investment they have made.)