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Strategies & Market Trends : e-Commerce the Next 100 Months...... -- Ignore unavailable to you. Want to Upgrade?

To: TLindt who wrote (1020)	5/26/1998 5:35:00 PM
From: Paul Schmidt	Read Replies (2) \| Respond to of 2882

To T Lindt This is the first time I have posted on this thread, but I think it is the most informative thread giving giving the overall state of play for e-commerce related stocks. For this reason, I would like to support DocStone in his proposal that Wave Systems Corp should be monitored as part of your e-commerce portfolio. I have followed DocStone's posts on WAVX SI thread, and he certainly subjected the thread there to incessant critical questions to the point of annoying some loyal followers i.e. he is anything but a pumper I will declare my hand immediately: I am extremely long on WAVX with a substantial position, therefore unable to be completely objective. However, the original reason I made my investment in this company in Oct 97, and which have so far since performed upwards by 400%+ still stands: it has an extremely elegant, flexible, affordable and secure solution to the problems of e-commerce, in the form of the patented Wavemeter. In my mind it has a robust product that is quite capable of becoming an industry standard. This strength is also its only weakness IMO: as it is hardware based, it requires a critical mass of WaveMeters on PC's to convince OEMs to put the meter on motherboards or I/O devices. This creates an all or nothing effect, and therefore this stock follows a different trajectory to the software based solutions in which a minority market share could still be profitable. This has been the main reason that this share had for almost 2 years traded at a bottom of $1 with occasional flurries of excitement. Comparable technologies are mobile phones and fax machines that have to network. Until certain crucial issues in the development of these technologies were overcome, or the market had identified a need for the technology, these innovations had languished. It has to be clearly understood that Wave is not in competition with the other software based solutions in trying to verify the sale of various physical bits and bobs over the Internet, but that it is unique in its ability to meter delivery of digital content to the PC and eventually digital TV and even further down the line, content via satellite. That is its real market, but it is perfectly capable of coping with the mundane task of verifiying ordinary sales. WAVX CEO Steven Sprague, who regularly posts on the SI thread to correct misconceptions have stated that the meter can cope with data streams of up to 100 Mbps. Other features are: 1) Hardware encryption 2)Client-side metering of transactions. With "cash" on the meter, metering can continue even if the client is not connected to the internet. Transactions can be verified in batches to diminish the cost of transactions i.e. it is of no use if a microtransaction of a fraction of a cent has to be verified with a phone call with a significant cost. Positive factors for the company is the quality of its executives and advisors; Peter Sprague the President of the company, previously CEO of National Semiconductor; advisors and major investors George Gilder and Nicholas Negroponte (of Wired magazine and MIT Media Lab fame). The past 6 months have seen a steady stream of announcements, starting in Dec 97 with IBM announcing its intent to put WaveMeters on its PCs towards the end of 1998, and its intent to put 4-6 million Wavemeters out in 1999. Incidentally, that decision was coupled to a decision by IBM to scrap its own development project termed Cantaloupe, if I recall the name correctly, in favour of the patented WaveMeter technology, IMO a significant vote of confidence. The current excitement around the stock, and the cause of headaches, back pain and sleeplessness, is a widespread belief on the SI and Yahoo threads that major OEM commitments to put meters on motherboards may be announced perhaps as early as the E3 this week or probably in June. The belief is also that a PR programme is being rolled out to boost the share price ahead of relisting on NASDAQ (delisted in Oct 97 to OTC BB because the share price had remained below the minimal requirements for a Nasdaq listing for so long)and a secondary IPO to fund the expected commercial phase and infrastructure (most expenditure so far has has been on R&D and salaries, about $60,000,000 over a 7-8 year period) The SI thread on WAVX (https://www.siliconinvestor.com/subject.aspx?subjectid=3860) is most informative and frank. If the number of discussions in a thread can be an indication of the interest aroused, then it is interesting that about 1000 messages were posted in the first 25 months of the thread and 1300 in the last 5 months. Compare that with about 1500 messages for a well publicized stock like CYCH since 1996. Last 6 months of announcements and FAQs about WAVX are available at their website wave.com. Unfortunately their quarterly results were not available when I looked, but these are available on Yahoo. For previous announcements regarding relationships with Creative Labs, Wave's Great Stuff Network (WinPublish/purchase), Zaksat (a Kuwaiti based Internet-via-satellite development company) and ITG,a UK based ISP, you would have to look at the SI thread back from post 1000. Enjoy Paul