Canaccord Reiterates IWM:VSE Recommendation, Upgrades Target
Paul Bradley, Canaccord Capital (416 869 7920) reiterated a "BUY"
recommendation and an update on operations today.
Recommendation: BUY
12-month target price: $5.50
52-week price range: $5.00-0.82
Shares O/S: basic 17.6M, fully diluted 20.4M
Shareholders: Management, 40%
Long-term debt: Nil
Weekly trading volume: 1.5M
Market capitalization: $63.4M
Over the past few months following the closing of its C$7.2 million
special warrant financing in early July, Infowave has made a number of
significant corporate and market announcements.
Final Prospectus Receipted
On Friday September 24 Infowave announced that the prospectus
qualifying its recent special warrants issue had been receipted by the
securities regulators. This is within the 90-day period that the
company indicated at the time of the special warrants issue.
Conditional Approval for TSE Listing
The Company received conditional approval for a TSE listing in
mid-July and we currently anticipate the common shares starting to
trade on October 13. We would anticipate the shares eventually being
traded solely on the TSE.
However, in common with most Canadian software companies, Infowave
harbours ambitions to be listed on NASDAQ. To this end Infowave has
filed a 20-F (the registration statement used by foreign private
issuers) and become a reporting issuer. The company also engaged both
US legal counsel and investment banking assistance.
Re-location of Wireless Business Group to Redmond
In conjunction with the corporate initiatives, Infowave is relocating
its senior personnel from the Wireless division to Redmond, WA. This
will put these key executives close to Microsoft's technical
development teams for wireless products and the Outlook software
application. The key thrust of this exercise is to build the US sales
and marketing team to capitalize on the opportunity that has been
created by the Wireless Knowledge partnership.
Product Release Program
A key component of Infowave's product strategy is to operate on as
wide a variety of wireless devices as possible - in the jargon of the
industry to be 'platform agnostic'. A key step in this direction is
membership of the Wireless Application Protocol Forum (WAP). WAP is
an industry association of about 100 members developing standards for
wireless data and voice applications on mobile phones and other
wireless devices. Participation in the forum is key to staying in
touch with rapidly evolving developments in the wireless data market.
Infowave's latest product for remote users of Microsoft
Outlook-Infowave for the Net-was released for shipment at the recent
NetWorld +Interop show in Atlanta. This product allows remote users to
access Microsoft Exchange applications from a Web browser interface
rather than using dedicated client software and significantly broadens
the market appeal of Infowave's wireless solutions.
The most recent announcement from Infowave covered the roll out of the
Kodiak development, now known as Symmetry. This product allows
Microsoft Outlook information to be forwarded to pagers or mobile
phones, using software running on a mobile worker's desktop PC. This
has considerable appeal for small and medium enterprise employees, who
need a cost-effective solution to remaining up-to-date with their
schedule and e-mail.
Symmetry offers paging and PCS network operators an opportunity to
extend the range of services offered on their networks, without
displacing existing capital investments. End users with two-way
devices, such as two-way pagers or digital mobile phones, can request
information from their Outlook calendars or schedules.
Glenayre has ordered a significant number of Symmetry licences from
Infowave and will distribute these to its customers, who operate
wireless networks. We anticipate that the first Symmetry revenues
will be recorded in the fourth quarter of fiscal 1999.
Outlook
We are currently projecting wireless revenues of just under $2.0
million for fiscal 1999. Our forecast for fiscal 2000 suggests
revenues of at least $4.0 million can be achieved as the Wireless
Knowledge Revolv service is rolled out. Given this type of revenue
growth and continuing development of the imaging side of the business,
we continue to rate Infowave as a BUY and maintain our target of $5.50.
DISCLAIMER
The information contained in this report is drawn from sources
believed to be reliable, but the accuracy and completeness of the
information is not guaranteed, nor in providing it does Canaccord
Capital Corporation ("Canaccord Capital") assume any liability. This
information is current as of the date appearing on a report within
this Site and Canaccord Capital assumes no obligation to update the
information or advise on further developments relating to these
securities. The information contained in the report is directed _only_
at, and any securities being offered are available _only_ to, persons
resident and located in British Columbia, Alberta, the Yukon, Ontario
and Quebec. Canaccord Capital, its affiliated companies and their
respective directors, officers and employees and companies with which
they are associated may, from time to time, hold the securities
mentioned at this report. |
