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Technology Stocks : WAVX Anyone? -- Ignore unavailable to you. Want to Upgrade?

To: ecommerceman who wrote (11188)	7/3/2001 2:17:39 PM
From: ecommerceman	Respond to of 11417

Pacific Growth Equities Morning Call Summary for July 3, 2001 Wave Systems (WAVX) Price: $4.43 Long Term Buy F01E: ($0.86) Brian Alger, CFA, Multimedia Technology ¡°Yesterday, we lowered our rating to Long-term Buy from Buy for Wave. Over the past several weeks Wave has released several announcements that indicate EMBASSY is gaining industry approval. Moreover, these announcements indicate several applications for the platform. We continue to believe the most significant near term opportunity to be with announced partner EDS (EDS:NYSE). As was recently announced, Wave has successfully completed the certification process with EDS¡¯s engineers. The next step is to get a contract signed. We had aggressively forecasted our model on the belief that this contract could be signed in the June quarter. Without an announcement, we have to assume no such agreement has yet been reached. Therefore, we are having to push out our revenue ramp. Several positive announcements indicate that the time for a discrete authentication solution may be close at hand. A quick recap of recent announcements indicate that Wave is making progress in the Cable Set top box, PC, and PC peripheral markets (7/2 Wave Systems Announces Commitment to FINREAD European Secure E-Commerce Terminal Specifications; 6/25 Securealink, Inc. Adds Wave¡¯s EMBASSY Technology to Product Line; 6/25 EDS Successfully Tests SSP Solution Suite Core Technology; 6/19 Wave and SCM Microsystems Team to Develop Level 5 Smart Card Readers; 6/5 SSP Selects Broadcom Digital Set top Box Reference Design to Integrate SSP EMBASSY Technology). Unfortunately the press release we wanted to see did not make it by the June 30th quarter close. Therefore, we have to assume that a license with EDS was not signed in the second quarter. While the difference of a week or two is not likely to make a big difference in the Company¡¯s long-term position, it does mean we have to move our revenue assumptions out a little further. Regardless of the partnership announcements, what we believe investors need to see is actual business with real revenue generation. While our model attempts to forecast the potential of the Company, investors should understand that to date, Wave Systems has no hard contracts, no significant customers, and therefore we have next to zero visibility on its revenue stream. We are reducing our estimates accordingly. Our revenue is lowered to $8.8 million from $14.7 million, and our cash EPS declines to a loss of ($0.80) from ($0.86). We would caution that these projections assume a fair amount of business begins to get signed over the next 2 - 3 months. Without any historical track record or forward visibility, we are not able to forecast 2002 at this time. Considering the push out, the lack of visibility and continued cash burn, we have also reduced our price target to $7 from $13.¡±

To: ecommerceman who wrote (11188)	7/13/2001 9:35:47 PM
From: Marty Lee	Read Replies (2) \| Respond to of 11417

Thanx ecommerceman, My stay in the hospital is over. I'm pretty groggy and have little energy. Got lots of medications, though. I see that nothing has changed. Does anybody have any illusions of economic expansion and techno-digital revolutions they'd like to share? Part of our enthusiasm for Wave Sytsems stemmed from these illusions. Thank God the company has a pragmatic side. We Wavoids are used to slogging along. We no longer slog alone. Nevertheless, we do it better and without lowering expectations. :) Sincerely, Marty