Replies to post #1356 on ImageWare Systems, Inc. (IWSY)

[awalkinthesun]

I saw this on the Yahoo board and thought it was worth the read

IWSY had a difficult month as shares slipped after initially moving higher towards mid-month. There is a significant amount of short interest in IWSY, which increased during the month due to a negative article that was released regarding the prospects for the company to achieve profitability in the coming months.
I consider IWSY to be a technology platform investment. In this type of investment, we are essentially investing in the future, unrecognized potential for a company to implement an emerging technology successfully. What creates the upside in these types of investments is that the markets have absolutely no idea how to value emerging technologies. There are no earnings models from which to determine what the potential is here since there are so few relevant comparisons. It is brand new territory and markets can’t value brand new territory correctly. Automatically due to the nature of the investment, we have an inefficiency taking place in the share price. The question I have to ask myself is are we are on the right side of the inefficiency? While CEO Jim Miller certainly has a track record of over-promising and under-delivering, I expect that some of the promises of this technology producing substantial results are close at hand. Further, upon validation of the technology by paying customers, this immediately becomes a buyout candidate by a large technology/defense based company.

The Lockheed partnership, which was a substantial driver behind my decision to reinitiate our position in IWSY, is a game changing event for the company. It is essentially validation of the company’s technology, setting them up for revenues from any number of the partnerships in the near future.

Lockheed tested out IWSY’s biometric engine for years before committing to integration of IWSY’s biometric engine into Lockheed’s own biometric offering. The IWSY product is not an option within Lockheed’s IDHaystack platform, it is basically the engine powering the platform. Further, Lockheed is one of a few companies that has access to U.S. Government contracts, setting up IWSY to potentially be a provider to the federal government.

Ultimately, the validity of Imageware’s biometric offerings will be proven in the marketplace through paying customers. That eventuality is close enough now that the stock warrants an investment given the exponential upside once this high margin technology begins producing revenues.

[awalkinthesun]

I guess I would ask what does the price difference between $1.15 and $1.07 matter if you consider the upside (depending on how much you are buying).
If they for instance PR'd a contract the stock would head back to $1.50 that day IMO.

To be candid I'm disappointed at mgmt not being more conservative on setting expectations, three qtrs into the same old song and dance is why the stock is here. I am shocked with how much potential there is with the stock it is hitting a 3 year low....

I think mgmt will tank the earning again as they have not announced a qtr update yet.... I am also frustrated at the power the shorts have in this market place (pink sheets) / and the effect the bs (for the most part) hit piece SA had on the stock.

I am holding, as the upside if they even sign on contract with one of their partnerships could be massive but expect the bleeding to continue unless mgmt shows the money.