Replies to post #174113 on Wave Systems Corp. (fka WAVXQ)

[Dory]

Chance, kudos on a thoughtful analysis.

One more point to consider regarding the last PP: Wave was in layoff mode to reduce its burn rate. While layoffs ultimately can help the bottom line, in the short term they are expensive. You have to pay the departing employees their accrued vacation time within 30 days of their last paycheck. So, in the months following layoffs a company's payroll burden can actually increase. And it's not a debt that can be pushed out. In short, it can take a full quarter to begin to see the positive results of reduced head count.

Cheers,

Dory

[xxxxcslewis]

CTS.

Thanks.

Very objective.

I remain puzzled by the large increase in deferred revenue, but there is no objective evidence it relates to upgrade volume. I seem to have a perpetual struggle with these rose colored glasses. Your numbers are probably very close.

[hnstabe]

Chance To See, like you, I am waiting on hard data on upgrades and FDE shipments. I feel that the numbers are up for both, perhaps significatly more than you have estimated. However, I do not think it of great value to pursue more guesswork. Hopefully Wave will disclose what we all want to know soon.

[go-kitesurf]

CTS,

One, the possibility of softness in spending in November and December

I believe Wave should have closed good business in December and November due to tax reasons:

Use your available IRS Section 179 deduction to buy software and hardware - put in service in December and get a full years deduction and for 2008 it is 50% (Consult with your accountant or tax professional to be sure that you qualify).

This helped my business grow substantially in December.