DocStone raises an excellent question regarding NSM, one that has concerned me as well, so I'd like to offer an answer, both to obtain others' opinions and perhaps to reassure myself on this issue--TOL'ing is it called? "Talking out loud," as coined by Wahoograd, correct? (Or Marty's variant, that being TOYA'ing, or "talking out yo ass.")
Anyway, just because an NSM deal has not been announced does not mean it does not exist. Perhaps it remains contingent upon finalizing a deal with at least one OEM that NSM traditionally has supplied. BTW, NSM is on the ropes these days, having recently missed their numbers and with operations still in the red. The press release issued in conjunction with NSM's earnings last quarter mentioned that the company was increasingly focused on identifying profitable product lines and weeding out all others. The analysts that follow the company are probably all over that particular issue. Therefore, NSM likely needs to be able to point to definitive deals with boxmakers before announcing it's getting into something as new and untested as the Wavemeter.
As an aside, the SMSC announcement may suggest that SMSC does already have an interested boxmaker or two lined up.
Either here, on Yahoo, or on Raging Bull, someone mentioned that NSM supplies HP and, in turn, HP may have some interest in the WaveMeter for internet security (business-to-business) applications. This use, however, does not neatly lend itself to the revenue-division formula WAVX hopes to use with educational and entertainment (viz. consumer) distribution. Maybe there are some wide differences of opinion on how to compensate WAVX in the business setting, which in turn is holding everything else up if in fact HP is showing interest in the WaveMeter as some have suggested here and elsewhere. (Maybe they're even letting lawyers into those meetings, adding immeasurably to the level of confusion and counter-productivity.)
Lastly, maybe WAVX itself is applying some brakes to the process. We know WAVX will have to raise a fair amount of money to build the infrastructure it needs to operate this metering and billing system. At present, there are no registered shares that the company can sell for its own purposes (as distinguished from shares for converting preferred to common). A rally in the stock price, therefore, does not directly or immediately offer the company a chance to raise capital. Ideally, WAVX would probably want first to be back on NASDAQ (with its greater visibility, credibility, and access to a wider range of investors) before announcing news that would make the stock move significantly. As you know, we've discussed previously the restrictions on certain money managers when it comes to OTC-BB stocks.
Remember, too, WAVX has two hurdles to overcome. First, OEM acceptance. Second, consumer acceptance. Of course, they're related, but until widespread consumer acceptance exists, WAVX will invariably operate in the red. They have to build and run an infrastructure; they even have to pay for the chips as an added incentive to the OEMs, don't they? Therefore, the stock does not, and will not, readily lend itself to traditional valuation methods--revenues, earnings-per-share, growth rate. Initially, it will play out (or fail to play out) on the basis of that ever elusive thing called "potential." And momentum players will be knocking on the door as well. Therefore, during that window of opportunity for maximizing stock price that will accompany the announcement of real, nuts-and-bolts, "we've arrived" news about OEMs and the like (when NSM gets honorable mention), WAVX would be best-served by being on the NASDAQ and ready to roll with its secondary offering. All existing shareholders likewise would be best-served by this strategy, because obtaining the best price in the secondary offering also minimizes dilution of existing shares.
Others can speak to the NASDAQ re-listing requirements, which I am not entirely familiar with. I believe, however, that WAVX has met minimum equity and OEM contract requirements, and also has a current SEC-approved S-1 on file. I have heard WAVX needs to trade at or above $4.00 for a while (30 days, is it?) to get back on NASDAQ. I really don't know, and those rules may be quite flexibly applied in practice. For example, this is a re-listing for WAVX, not an initial listing.
With the PC Expo and E3 now behind us, I personally am looking to see next either a NASDAQ re-listing announcement, an S-1 or S-1A filing to allow the company to sell shares for its own account, and/or further content-provider announcements. These announcements, however, IMHO, will be the last-chance leading indicators of really big action soon to follow. Sideliners beware.
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