John Galt- If you check any of the yearly reports, and the disclaimers attached to all of them, you will find that you have been warned about the issues that Wave faces as an ongoing business concern. So, I think that you have been told everything that you need to know as to the risky side of your investment in Wave. You and I, and everyone else here has chosen to invest despite those warnings. It is well chronicled on this board that Wave has cash flow problems that have led to dilution. It has also been documented that Wave is experiencing delays in the deployment of it's technology.
Are you really going to try to tell me that you have not heard these things?
The issue then becomes not whether we have been deceived, but instead, a question of how much information is it prudent for a CEO to disclose in a public venue. I would argue that a CEO should portray as much strength as possible, for a number of reasons.
1)In contract negotiations, if your opponent thinks you are desperate for a deal to get done, maybe they can squeeze you for an extra few weeks, till maybe you come down in your demands
2)If a hostile takeover is initiated, we are better served by portraying as much strength as possible, either to avoid the takeover, or to get the best price possible.
3)Companies that may like your software will want to know that you will be around in the next year to provide service/support.
4)It's bad for employee morale, as well to make too many negative statments. How hard will our sales force work if they are unsure Wave will even be around next year? Not very.
5) In our present position, attracting new investors will be harder the more weakness that is portrayed.
IMO CEOs, and other leaders, pick and choose information to release, frame developments in the most positive light possible, and generally craft a message that both represents a companies prospects and protects it's interests. And, I assert that this is the norm, not the exception. I also state that in general, CEOs that are too negative do damage to their companies. I would also acknowledge that CEOs that promise what they cannot deliver will damage their company, as well.
To say that any CEO should answer any old question by "telling the truth," as you demand is hopelessly naive. There is not a CEO alive that will do that in such an absolute fashion.
Should patent falsehoods be stated? Absolutely not. Should crucial information be whitheld, or books be cooked? Again, absolutely not. It is up to you as an individual to judge whether that has occured. That is part of why you do DD. Yet, you must not really think that, or you wouldn't still be here. At least, you must still see enough of the business plan holding true to expectations to stay.
You also do the DD because you realize that a CEO is, by definition, not necessarily the best source for unbiased information on the company.
I personally think that the Spraguespeak problem has been a combination of early overexuberance and inexperience, and lately has been a function of an inability for anyone to accurately predict the uptake of this new paradigm. I do not think that deliberate lies were told. I think that SKS has presented a message of the more positive possiblities that Wave faces. As he should. Has he overpromised? Has damage been done as a result? The only damage that is readily apparent to me is some rankled shareholders. I see Wave's position in the TCG paradigm improving, the company moving to break even this year, and a variety of deals waiting on the horizon. Damage? Nope.
As we start to get multiple quarters of bundling and licensing revenues, projections should get better. Once we have steady, break even income established, things like waiting for the Seagate deal will not be the subject of so much angst. Then, the tempest in this particular teapot will cease.
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