Replies to post #240420 on Wave Systems Corp. (fka WAVXQ)

[waveduke]

mymoney,

the way I see it, if Bill gets it on the rails, the momentum will continue. It is far easier to sell what has already been sold. I just don't see him not taking advantage of that momentum.

When people get burned, they are understandably afraid of what burned them. It is common sense. The void and the reaction to it is completely logical.

Anyone is capable of acting out of character, but I just do not see Bill as the guy speaking without some care about the content of his words. Throw away the prior circumstances and I think most would be far more comfortable with the current situation (the void).

The question that has not been asked around here lately is what if Bill's take is accurate, but modestly overly optimistic on timing? Wave is not priced for that scenario. Lots of upside if that is the case.

[aleajactaest]

"I see a lot of emphasis put on CFBE. Is it significant if this is achieved with mostly cost cutting and a minimal to modest revenue increase?"

Depends what you are interested in.

If you are thinking about dilution, then CFBE makes a big difference however it is achieved.

If you are thinking about whether demand is appearing, CFBE is not as relevant as how it was achieved (cost-cutting or revenue expansion).

If you are thinking about future product development, then savage cuts mean less investment and slower progress.

One thing we do know is that Solms' financial forecast incorporated CFBE by q4,14 in its assumptions. Now that this pillar of his assumptions appears to have crumbled, and in the absence of assurances to the contrary, it is safer and more prudent to assume Wave's cash flow isn't adequate and Wave will need to dilute. Of course, it's a probability thing. But when a key pillar fails, all of the architect's calculations become obsolete and the building often comes down.

Another interesting question: since it appears he didn't reach his stated goals, what happens to his performance bonus? - is it the usual Wave model? Heck. It's a guaranteed bonus. Or is it different?