Replies to post #34531 on The Jailhouse (JAIL)

[HhH]

That's not whining...

it's guffawing! But, then, I forgot you have a policy never to express anything publicly that might be construed as negativity. So, I guess I should picture you writing another earnest letter of protest to the boys in Lee, which they will promptly ignore, as always.

As to the transaction reported in the 3rd quarter 10Q, I actually raised the question well before then. The press release--you know, the one in which the company boasted of all the cash that would roll into the corporate coffers thanks to the exercise of stock options, conveniently ignoring the fact that the main cash infusion was to the wallets of management--anyway, that press release was accompanied by Form 4 filed by Feeney, but nothing by Peter Sprague, who obviously had sold stock. You could go back and look it up. I think it's on Raging Bull. I would post a reference link, but RB is too much a pain in the ass to bother.

Unfortunately, due to the constraints imposed by cult-facilitator-in-chief, Sheriff Matt, this will end our dialogue for the day. Heaven knows the cult should not be forced to read more than 3 messages a day from me. It might impair their sense of loyalty. Or Snackman might go on another crying jag.

By the way, saying you see the matter for what it is stops short of calling a spade a spade. You obviously can't bring yourself to utter the simple truth: These folks are awfully greedy! Go ahead. Say it. I dare ya.

[HhH]

24601: Steven Sprague's "guidance"...

on 2004 cash flow is still out there. You remember? It was in November, I think, following the last SHM in which more mature board members discussed a 2005 - 2006 time frame for achieving cash flow breakeven. Your CEO went to the trouble to e-mail a Wavoid and contradict this sensible talk with his explanation that he, er, sorta forgot to include ramp-up costs in his version of break-even. His position at that juncture was that break-even was his expectation for 2004, if additional ramp-up costs were excluded from the model. This, in my opinion, will prove to be as misleading as his defense of the PGE revenue projection of 2001 in which--in July of that year--he defended a $21 million revenue projection, only to fall something like $20 million short. Wavoids at that time, as usual, dreamed up something else to cheer about and forgave him the egregious over-estimation.

Here is my prediction: There is ZERO CHANCE this company even remotely approaches cash flow breakeven--even if you completely eliminate all so-called "ramp-up" expenses. One would have to be completely out of their mind to think this is a possibility. Completely insane. Which, of course, describes a fair number of Wavoids when it comes to what they like to call investing.

[HhH]

24601: Ever get an answer...

on the issue of whether WAVE "set up" a message board as per the George Gilder quote? Perhaps he misspoke. Or perhaps not. Whether they actually set it up or not (via their henchman Snackman), I'd be willing to bet they allowed their employees to post on the RB site. In fact, it wouldn't surprise me to learn someone was actually assigned the task of monitoring it and, yes, steering the discussion in pro-WAVX directions. I would look at MrKleen for starters. And, of course, that person whose name was mentioned by CPA. I think it's possible such behavior was, in fact, rampant at Lee, MA. If so, it would be the hundredth example of idiocy in the boardroom.

P.S. I think the independent contractors who are beholden to present management and who keep mouthing things like, "It's coming" ought to disclose the fact that they receive compensation from the firm. It's my feeling that not disclosing this information is misleading to the reader and, I don't know, not exactly kosher. But, then, you're the lawyer.

[HhH]

24601: How about a new bet?

I'll wager WAVX revenues for Q1 2004 are less than $100K. All posting rights everywhere for the period of ninety days.

[HhH]

Earth to Wavoids....Come in Wavoids...

So the company announces the following:
(bolds and underlines mine)

Steven Sprague, president and CEO of Wave Systems, commented, "Once effective, we believe that the shelf registration statement would provide Wave with the flexibility it needs to fund its working capital needs through equity-based capital raising transactions. We currently anticipate that the gross proceeds indicated in the registration statement, if raised, would be sufficient to meet our current capital requirements through 2005. Depending on the timing and scope of revenue generated from current operations and/or new corporate initiatives, Wave may actually require less funding going forward than that contemplated in this registration statement. Any draw-down under the registration statement would only be done with the advance approval of our Board of Directors."

This repudiation of the ridiculous stance that some exotic version of break-even in 2004 was attainable--a position espoused less than six months ago by the very same Steven Sprague--is viewed by Wavoids as evidence of another reason to put on their every-ready happy shoes? This is seen as evidence of an impending buy-in by a gorilla (pick which one: INTC, MSFT, etc., etc., etc.)? How about this boys and girls? The company is going on record with one of its rare concessions to reality, i.e., that break-even in 2004 was an insanity that even the most Kool-Aid Komatose Wavoids would eventually have to reject and that it's gonna need as much as $25 million to take it through the following year.

P.S. to Matt: Greetings to the Cult-Facilitator-In-Chief. Lord knows the Wavoids must be protected from any contrary opinions such as the above.

[HhH]

24601: I agree completely...

with your remarks here:

"People who declare that Wave's managers are dishonest, but who go on to say that if Wave succeeds they will admit being wrong about that, should re-sort their thinking, segregating their subjective feelings from their objective observations and rethinking things more analytically. It makes little sense to pronounce judgment on an input measure like managerial integrity but promise to reverse it on the basis of an output measure like commercial success. By that formula many of the greatest scoundrels of all time would be vindicated. If their problem is with the technology or the business model, fine. If their problem is with the integrity of management, fine. But they shouldn't be heard to use one as a foil for the other so that they can flip sides after things work out."

It's my feeling that WAVX management is a hideously greedy group that plays fast and loose with the truth and that would stab the shareholders in the back in a heartbeat if it put a buck in their wallets. No amount of commercial success will change that. They may turn out to be successful pigs, but that will not change their piggishness an iota. My guess is they are every bit as inept as they are greedy. But who knows? Maybe I'll be wrong on that point.

[HhH]

Let's revisit the past for a moment...

A slightly edited version of an earlier post to 24601 bears repeating, as follows:

Steven Sprague's "guidance" on 2004 cash flow, specifically. You remember? It was in November, 2003, I think, following the SHM in which certain more mature board members discussed a 2005 - 2006 time frame for achieving cash flow breakeven. Your CEO actually went to the trouble to e-mail a Wavoid and contradict this sensible talk with his explanation that he, er, sorta forgot to include ramp-up costs in his version of break-even. His position at that juncture was that break-even was his expectation for 2004, if additional ramp-up costs were excluded from the model. This, in my opinion, will prove to be as misleading as his defense of the PGE revenue projection of 2001 in which--in July of that year--he defended a $21 million revenue projection, only to fall something like $20 million short. Wavoids at that time, as usual, dreamed up something else to cheer about and forgave him the egregious over-estimation.

Here is my prediction: There is ZERO CHANCE this company even remotely approaches cash flow breakeven--even if you completely eliminate all so-called "ramp-up" expenses. One would have to be completely out of their mind to think this is a possibility. Completely insane. Which, of course, describes a fair number of Wavoids when it comes to what they like to call investing.

[HhH]

How is it possible...

that WAVE CEO Steven Sprague thought it was not just possible, but likely his company would reach cash flow breakeven in 2004? What assumptions was he using to come up with that well documented piece of lunacy? (Lunacy fully endorsed by the inmates of Wavoid Nation, as usual).

Jesus. Cults are amazing things. Truly amazing.

That's three and out.

[HhH]

24601: Actually, no one's been righter...

than me about this stock. Oh, sure, I've been wrong on a prognostication or two. But, bottom line, I was the one who sold this thing at $14 while you and the rest of the cult have watched it decline by something like 95%. Other than you, I can't think of a single long who claims to be in the black on WAVX. And, for some reason, you are reluctant to say how and more importantly when you managed to achieve your profits.

Be that as it may, it astonishes me that you continue to make excuses for the incredibly sloppy "guidance" the CEO of this company puts out. My prognostications are based purely on guesswork. I have no inside information. I have no Gerry Feeney looking over my shoulder at my spreadsheets (or making them for me). Despite being completely in the dark on the inner workings of this company, it seemed obvious that cash flow break-even in 2004 was a ludicrous proposition when he made it. In hindsight I would expect even you could see that. But maybe not.