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

To: Klingerg who wrote (2493)	6/1/1998 11:53:00 AM
From: Roger Bodine	Read Replies (1) \| Respond to of 11417

Anyone...with all this good news, do any of you out there know why the stock is dipping below 4 1/2? I was expecting above 5! It seems like with all it has going for the company the stock should be doing 5 1/2 this morning. Perhaps this is just tagging along with NASDAQ overall decline. Thanks in advance. Roger

To: Klingerg who wrote (2493)	6/1/1998 12:19:00 PM
From: Wahoograd	Read Replies (1) \| Respond to of 11417

During a business trip to Atlanta I was able to visit with Wave Systems at E3 and my feelings about their prospects are even more positive now after having had an opportunity to speak with company representatives. The folks guiding Wave are highly intelligent, well organized and have a clear and sensible strategy to make Wave a real success. The majority of key staff members are young, energetic and very enthusiastic about their company. As always, no specific details of deals or announcements can be disclosed to an outside stockholder but I could sense a strong feeling of confidence among Wave staff members. I was able to obtain a good level of comfort after learning more about the company's patient step-by-step strategy to put WaveMeters on a vast number of PCs. Essentially, the deal with SMSC is a natural first phase because they are the kind of company that will need to manufacture the WaveMeter chip prior to motherboard implementation. While investors obviously want to hear about major OEM commitments, SMSC would not announce plans to embed the Wave chip in their own I/O integrated circuit chip if they were not aware of any demand from OEMs to purchase them. Just as Wildman posted on #2489, we should look closely at the statement made by SMSC: "Our customers have expressed strong interest in the Wave technology. SMSC's investment in this technology will enhance PC I/O functionality and increase the value provided by SMSC to our customers." The customers of SMSC are OEMs and motherboard manufacturers. It is totally inconceivable to me that the SMSC deal would be a case of Wave jumping onto an opportunity just for the sake of making an announcement. This initial step by Wave and SMSC is clearly an integral part of Wave's long-term plan and strategy. I also agree with Wildman that National Semiconductor should logically follow the move by SMSC. The Wave enhanced I/O chip will add just as much value to National's product line and increase their revenues and bottom line accordingly. As a side note, it is not expected that SMSC will be sharing in any Wave revenue for production of the enhanced chip. Their current I/O chip costs around $2.50, so the Wave enhancement will nearly double the price and substantially increase the dollar volume of their production. My understanding is that the OEMs are not willing to tip their hand early in the development cycle by introducing a new product that will not be entering the market until the first half of 1999. OEMs will probably control when and where the time is appropriate to formally announce and launch any new marketing plan. The bottom line is that Wave investors need to be patient and not tempted to sell despite any delay of "major OEM announcements". It is ironic that some investors will assume that the ride is over for now and will not understand the long-term strategic implications of the SMSC deal, nor will they be aware of Wave's own patient and sensible strategy to put this company on the map. While they may be preoccupied now with 'home run' announcements, one day they could wake up and realize that the WaveMeter really did end up on millions and millions of PCs. In summary, my visit at E3 gave me the impression that Wave is well focused and in firm control of their strategy. Their staff are confident and patiently following the order of progress. One of their primary concerns going forward is to somehow control the expected growth and avoid too many meters entering the market at once. Wave would like to phase introduction of the meter and avoid serious service problems, but at least those are the kinds of problems one would like to be anticipating at this point. Best of luck and hang in there! Wahoograd