Replies to post #241906 on Wave Systems Corp. (fka WAVXQ)

[player1234]

A couple of points:

1) I don't equate Mr. Solms with the previous CEO. I feel the previous CEO was a scammer, a liar and a fraud. I do not believe the current CEO is any of those. However, there is no debating that, so far, the results have been the same, "over promise and under deliver". I believe if the deal stream doesn't happen, the company will be sold. Q1 showed a single big deal isn't nearly enough. The market agreed. The CC didn't convince me there were many others in the pipeline.

2) The EPS shows a bigger loss in Q1 2015 than in Q4 2014 even with the $2.3 million deal. That is true. But since the deal needs to be amortized over the 3 years, that was expected. It is the cash that is an issue for me.

I watch the debate of billings vs. revenue from both sides because I believe both are useful. Revenue gives a standard view across the board so apples-apples comparisons can be made. However, billings have moved into prominence the last few years due to the "cloud" (what used to be called hosting). In this case, licenses are leased and not really purchased and the accounting is the same billings vs. revenue issue. Salesforce.com has had this "issue" since they started many years ago. Oracle now gets the majority of their revenue on a subscription model (it plays hell with the comp plans). But, both of those companies have a steady stream of deals that level out the billings and revenue. Wave does not.

Ratios of billings vs. revenue can be useful to get a view of specific internals. It used to be the ratio of license/maintenance revenue that foretold a company's financial direction in terms of new business.

Sorry for the run-on answer.

[aleajactaest]

hi blue,

it is simple. wave is still a dilution stage business.

folks can try to second guess if/when wave's fortunes will change. as they have done for many moons. as always, we will measure the confidence of the CEO inside his safe harbour, whence he is permitted to express it as he sees fit. if only confidence translated to orders reliably.

it is valuable for the ceo to communicate a sense of confidence to shareholders for obvious reasons. he needs the stock price to be as high as possible because wave is a dilution stage business.

but we'll all know at much the same time if/when an announcement or series of announcements occurs that will convert wave from a dilution stage business into a viable going concern.