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Technology Stocks : Aware, Inc. - Hot or cold IPO?
AWRE 2.115+0.2%Nov 21 9:30 AM EST
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To: Elroy who wrote (2446)1/22/1998 8:05:00 AM
From: Steve Morytko  Read Replies (1) of 9236
 
Aware licenses their technology to equipment makers.

Aware has licensing agreements with some big names for their technology. While they have recently announced an ADSL router (sounds very interesting for the small business clients) I believe their business plan is centered around licensing (subject to near-term change).

Let's pretend they make a flat fee (or perhaps a percentage) on every piece of hardware sold using their technology - say $5. Now how many of these do they predict by Y2K? Was it 20M or 40M, ... ? I'm not very good at math - go figure. Oh yeah, don't forget to multiply by 2 - you need their technology at both ends. You might also want to consider that they probably earn some royalty from ADI for every chipset they sell that includes AWRE technology (double-dipping - gotta love it). How much would that be?

Now remember this is licensing revenue. Can you say "cash cow"!!!!! And they didn't even get a finger dirty doing it. This makes AWRE attractive for a number of reasons. If they care to further develop their hardware product there should be plenty of partners to choose from. Aware should have no trouble finding cash to further development of any more good ideas they have (like their wavelet technology). Also, suitors love cash generators but I'm hoping that won't happen (never had a ten-bagger before).

Near term there may be some more "opportunities" but the future looks very bright at this point. You should have no trouble figuring out that I'm long and thinking of going longer.

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