I join the optimists on the security standard coalition debate.
As with Wahoograd, I spent late last week scrambling to get things in order in advance of a vacation, and today I began a 2-week vacation that will keep me away from a computer from time to time. Whether I post or not over the next couple weeks, though, I'm in WAVX for the long haul now, especially after seeing this recent news.
I've just read through the Raging Bull and SI posts of the past 36 hours, and I very much believe WAVX is going to be part of the PC security standard coalition that is being discussed. I have never minded--and have actually invited--the healthy conservative restraint shown by, among other regular posters, Andrew Peterson. In putting it all together though, I join Wahoograd, Jas, Wildman, French Bikini, 24601, and all the other unrestrained optimists (on this issue) both on this thread and on Raging Bull.
First, double posting is a thing of the past. You really need to read both SI and Raging Bull. Wahoograd has made a number of very important observations in several posts over there, and French Bikini added a few of her own. The paragraph-by-paragraph "it can't be mere coincidence" argument of hers is very persuasive. Jas and 24601 have also brought back into focus bits and pieces of information that have been in circulation as of late.
Second, there are at least two very good reasons why WAVX has not been specifically mentioned thus far in relation to all this. (Nor has any other small company.) For starts, it is unlikely that any company whose stock price will be significantly affected by such news will be mentioned by name until ALL the pieces of the coalition are in place.
Also, while WAVX may very likely be a shoe-in to provide the PC-side security device, there may not yet be final agreement on the revenue division. WAVX loses all bargaining strength on this issue once they announce their role publicly, because they cannot thereafter persuasively bluff to the others that they will not participate at all, or on less generous terms and conditions. Once the news is officially out, the stock price of WAVX will run. Merely threatening to pull out will put the stock in a tailspin and risk all kinds of legal problems.
Remember, though, WAVX recently mentioned that they were working on some important OEM deals, but that it was critical to do them right. The revenue split for metered content is a huge issue here, especially because it is "secondary" to the security issues. It may not yet be pinned down, especially since business-to-business applications present different problems and because getting the meter out there is going to be easier than originally expected. In short, others are going to want to negotiate for a piece of WAVX's piece of the HUGE pie.
Third, as French Bikini mentioned, these are all the same companies we have been led to believe WAVX has been in discussions with. IBM is under contract with WAVX--the contract is set forth in WAVX's SEC filings--and is legally committed to making the WaveMeter the industry standard.
Given the dual functions of the meter--security and microtransaction processing--I'd be astonished if IBM were advancing a security standard that tended to nudge out WAVX as a standard for either metering or for security. If this were occurring, we would not see the same technical strength in WAVX's stock performance, and we would see less optimism in every other respect--exercise of warrants, payment of licensing fees, upbeat company statements, etc.
Fourth, I think the WaveMeter is perhaps the only "sure thing" so far with the coalition. "One of the most likely implementations is a low-cost encryption component tacked onto a chip in a PC's I/O subsystem." That's a WaveMeter. It's already part of the ballgame, from what I can tell. In fact, we probably would have heard specific IBM and/or HWP news to this effect if it were not for the coalition, which complicates things somewhat.
The coalition brings additional components to the equation, with other details to work out, but with the added benefit that practically ALL PC-makers will end up installing WaveMeters as standard equipment if the coalition comes together as planned. As mentioned above, the added complexity of the deal has put restraints on WAVX's ability to make official news announcements. Mr. Sprague, though, has reassured us in specifically saying SMSC would not have been on-board at all if it did not have interested customers with orders already in place.
As I've said in the past, of course, it ain't a done deal until it's signed (and, for us, announced). But the upside odds are enormously favorable right now as I see it.
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