WT--I had the same concern that you do while I was researching the stock 10 months ago, but that was quickly alleviated when I learned that the OEMs (computer manufacturers) would, as /kbo pointed out, get a cut of every Wave transaction completed through the use of one of their machines. With computer margins continuing to fall, this is an extremely powerful incentive (imagine how much revenue Dell would have pouring in if all of the computers they'd sold had contained a Wavemeter!).
In fact, I went from questioning the concept--just as you're doing now--to wondering why the OEMs hadn't jumped to deploy the chip as soon as they could. I'm still slightly troubled by that question, frankly, but more knowledgeable people than me correctly (I hope!) point out that no OEM would make an announcement ahead of deployment due to concern about tipping off their competitors, and that you don't just throw a Wavemeter chip into a computer box on a whim. This doesn't seem outlandish to believe, and I am greatly reassured by the agreements that Wave has made with very substantial companies. While we may still "fall by the wayside," I'll be extremely surprised if that's the case--the concept just makes too much sense. I bought my first shares at about $3 1/2, and have added to my position a bunch of times as more and more significant companies came on board.
Final words of gratuitous advice--don't be intimidated by the runup in the price of the stock. If this one "hits" at all, the $20s will be a very distant memory...
Kudos to Steve for his excellent analysis, as usual. |
