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

To: 24601 who wrote (6952)	5/22/1999 9:25:00 AM
From: Wooly	Read Replies (1) \| Respond to of 11417

24, Some people just don't get it. Vision is a curious thing... It's kinda like striking a mother-load diamond mine on your property, and thinking, "Forget it... Picks and Shovels are way too expensive!" Cheers, Wooly

To: 24601 who wrote (6952)	5/22/1999 11:34:00 PM
From: Oliver Hahn	Read Replies (4) \| Respond to of 11417

24601-- Yes I have done my due diligence, and I remain skeptical. Sure, the concept seems sound, but there are tremendous hurdles to overcome in getting from concept to being the next Microsoft. And yes, "webinfopro", you might expect hearing from folks who can read a balance sheet. However, I do not blindly project past performance to the future, but I do look at how a company has acheived success in the past to figure out if they can make it in the future. Given that this company has been delisted from the Nasdaq and has almost folded as a going concern, I don't think such scrutiny is unreasonable. Fundamentally, I don't see a clear roadmap to how this company is going to generate the revenue required to pull it out of its hole (i.e. the $57 million hole). Yes, if every computer had an EMBASSY chip the company would be in a position to generate revenue, but even then it would require decent execution. In the meantime, I would like to see definite revenue targets that the company's progress can be evaluated against. Perhaps a reasonable estimate of the number of devices carrying the EMBASSY chip by year's end. How many "select" modems will Actiontec ship with EMBASSY, or is it only a select few? How many users of TheGlobe will be able to use Wave's services this year, next year, etc, given that all TheGlobe customers currently don't have EMBASSY chips in their computers. Unfortunately, the Wave web page provides only hard numbers on losses and puff pieces on the concept, as well as touting "marketing agreements" that are worth just the paper on which they are printed. Going through the web page, news accounts, the SEC filings, a couple of hundred posts on this thread, there are no revenue models, no discussion of which foundry will be mass producing the EMBASSY chips, no discussion of yields, etc. One can counter that it is too early to have any production, but come on, they have been kicking this concept around for 10 years, spent $18 Mill on R+D, and have only a handful of potentially unenforceable patents to show for it (they admit in the 10-K that they are in negotiations with other patent holders for licensing because their three measly patents are not iron clad). And if they aren't yet talking about production, don't count on any meaningful revenue for the forseeable future. Given this complete lack of any meaningful production, the "roll-out" coming this summer can only be a proof of principle or prototype event. Let's look at the numbers for the past four years for R+D and Sales, General, and Administrative (SG&A). I am ignoring here revenue (there is none) and the licensing shenanigans with Aladin, which have essentially been a wash in terms of who pays who. So, in millions, 1995 1996 1997 1998 SG&A (4.1) (5.6) (8.0) (9.9) R+D (3.3) (3.3) (2.1) (3.5) (Aaaaaargh! I hate making tables on SI) Now we know that there are no sales to speak of, so General and Administrative costs are out of hand. For a small startup tech company, one would assume they are throwing the kitchen sink at developing their product, yet instead most of the money goes to unspecified and uncertain administrative costs. So what in the world makes us think that the management team has the ability to execute in the real world of product delivery and revenue recognition? If I can't make the argument that past losses imply doubt on the future of the company (since I apparently don't have the "vision thing"), then one can't make the argument that Peter Sprague's past leadership of NSM implies future success at WAVX. Furthermore, it appears that WAVX is Sprague's personal fiefdom. He makes loans to himself from the company, he hires his two sons, and who know what other abuses of his corporate fiduciary duties. I realize this board dismisses my skepticism. But I don't think these are dismissable issues. Sure, I can see a vision of WAVX slurping up a cut of every web transaction, but I also have a private vision of me being as rich as Bill Gates. I also have visions of IBM or any other deep pockets dusting these jokers if there is actually that much money to be made. How can you believe that a company that spends $57 million and 11 years to offer a prototype chip can reasonably fend off a competitor coming from the real world of real deadlines and real dollars and sense? Oliver "Amazing, but I am actually long" Hahn