Forum Home | Log in | Signup | My Page | Rules | FAQ | Boards | Members | Search
« ALEA Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next

Pipeline

By: Cactus Flower in ALEA | Recommend this post (0)
Thu, 19 Apr 12 10:07 PM | 98 view(s)
Boardmark this board | The Trust Matrix 		Msg. 07382 of 54959
(This msg. is a reply to 07381 by Cactus Flower)
Jump:
Jump to board:
Jump to msg. #

The writing was on the wall. They expected 20% throughput on the pipeline over a year (see 5 to 1 below). Actual throughput was 10% (2 out of 20 if you count 2011, or 1 out of 20 if you count the gap between SHMs so far). Exaggeration rate: 200% on expectations of revenue (20% over 10%); 1-2000% on the pipeline (1 or 2 orders out of 20).

The pipeline is simply bogus.

Thursday, November 10, 2011 8:47:45 AM
Re: None
Post # of 225354

"Not sure if anyone else thought this, but my sense was that the CC read well for 2011, but was inconsistent for 2012.

SKS' concept of a pipeline was revealed as what I think many believe it is: filled with speculation but not necessarily with revenues -

"The pipeline is growing very strongly. In the third quarter we added over $25 million, close at $30 million worth of potential transactions with our partners to the 2012 pipeline. And so we had a really strong Q3 from the perspective of adding potential projects and we see that continuing to grow."

With a pipeline filling with substantial information at a quarterly rate of $25-30m, you might expect an annual target for revenues in excess of $100m. But this pipeline has potential transactions in it, and when these pop out into a revenue prediction, and you deduct around $20m for Dell and $6m for Safend business from the company's expectations for 2012, you end up with around $20m of transactions for the whole year.

"And I think that over the course of the last couple of years, we’ve gotten better at having better predictability in our forecasting, its never an exact science, but I think we are set up to have a sales year in 2012 within 45 to $50 million range if not north of that."

So the pipeline to expected transaction ratio is around 5 to 1. "North of that" presumably refers to the stuff Wave hopes for, but does not expect.

I understand the caution. But on the other hand, if Wave is getting better at predicting future revenues, it is hard to reconcile these two statements. To me, it appears there's an internal battle going on here."

» You can also:
- - - - -
The above is a reply to the following message:
Re: Nice post, dig
By: Cactus Flower in ALEA
Thu, 19 Apr 12 9:50 PM 		Msg. 07381 of 54959

Hi dig,

They may have expected that the sales force would self-finance. If that were to occur, then market financing early would not have been necessary.

That's the bit of the argument I understand.

But if that's the case, you have to be sure that the demand is there.

How could they have so little clue about their pipeline? They claim up to 10 and then up to 20 major orders are on the way and they have a 20% hit rate over 2 years and a 10% hit rate over 1.

That tells you they have no idea about their pipeline. And so they cannot make sensible decisions. This is a serious information breakdown. And it costs the shareholders in lost ownership interests in the company. Meanwhile, scrambls, increased Sprague bonuses etc.

We may have hope for May-July. But hope isn't a hard currency.

I am persuaded that heads should roll this time. There's an important missing ingredient in the governance and management of the company. And they need to listen.

They've had enough time to do something. They've chosen to do nothing. There has to be a consequence for a failure of this type.

« ALEA Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next