Replies to post #196319 on Wave Systems Corp. (fka WAVXQ)

[Snackman]

I doubt you will see anything from thestreet.com until either Wave does quite a bit more than $7 Mil a quarter, or unless the is a Govt contract or a major contract that pushes the SP up $10-$15 in a very short time frame.

[Kaleid]

RE the street....only 2 articles......

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Bulls Charge on a Good Sentiment Number

By Rev Shark
RealMoney.com Contributor
3/26/2010 10:26 AM EDT
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The bulls were a little hesitant to jump on at the open but after the Michigan sentiment number came in slightly ahead of expectations, they are a little more active. We have better than 2-to-1 positive breadth, and the only major group in the red is pharmaceuticals. The dollar is weak, and that is helping oil, steel, coal and commodities to lead, but retails and regional banks are also perky.

As I discussed in my opening post, I don't expect the market to suddenly fall apart after the ugly reversal yesterday. It was a sign that we need to tighten up stops -- the buyers aren't going to suddenly disappear.

So far this morning I have a few smaller trades going but time frames are very short and stops tight. One low-priced stock of interest on my radar is Wave Systems (WAVX - commentary - Trade Now), which is involved in electronic legally binding signed contracts for digital transmission. This technology is being widely used in the mortgage business these days as loans are being modified. The stock has big early volume and is turning up after a decent consolidation.

Long WAVX but positions can change at any time.

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A Look at Post-Split Performance

By David Peltier
RealMoney.com Contributor
9/25/2006 1:00 PM EDT
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So why do companies do these? Well, a reverse split causes a drop in the number of outstanding shares and affects a rise in the share price by a similar ratio. One possible reason why Ciena and JDSU may have chosen this route has to do with earnings. With 1.69 billion shares outstanding, JDSU would have to earn an additional $169 million to boost earnings by 10 cents a share. To end up with a similar result, Ciena would need an extra $59 million in earnings, with its 591 million outstanding shares.

Another reason is to boost the stock price to a more "respectable" level, as many institutions won't invest in a company whose shares aren't trading for at least $5.

With any type of split, however, there is no change in the value of your investment or the company as a whole.

In fact, I was always led to believe that reverse splits were a fruitless exercise. Investors, not fooled by the artificial boost in share price, eventually bid the stock down to the low single digits. I remember seeing this happen many times when the Nasdaq was melting down in the earlier part of the decade. However, I decided to run some numbers to see if this theorem still rings true.

Using Capital IQ, I screened out 23 reverse splits over the past year that have been enacted by companies with a market capitalization of at least $100 million that trade on the major U.S. exchanges. I then tracked their performance from the split through Friday's closing price and found the average stock actually gained 2.6% over that period.

Wave Systems (WAVX:Nasdaq) 7/26/06 1-for-3 -15%