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Re: The Granlibakken hypothesis.*

By: Cactus Flower in ALEA | Recommend this post (0)
Sat, 02 Jun 12 8:13 PM | 102 view(s)
Boardmark this board | The Trust Matrix 		Msg. 08262 of 54959
(This msg. is a reply to 08258 by DigSpace)
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"But seriously, 20-40% QtoQ?"

Are you talking revenues? I'm not touching them.

I'm thinking only about cash flows. And cash flows are resolved by a major order with an upfront payment.

Cash flows vary by 20-40% at the drop of a hat.

In terms of Wave's Dell and SME business, Q1 was a curiosity. We expected it to be weak. But the drop was much bigger than anticipated. Hard to extrapolate from a single instance, or to bend an expectation of what comes next. So unless/until there's a trend around the Q1 results, I'm inclined not to use them as a foundation.

Even so, I am anticipating a return much of the way towards the previous trend. I am basing this not on extrapolation from Q1 but simply on the apparent reality of the lack of serious dilution in May. At Q1 equivalent inflow rates, they would surely have had to dilute aggressively in May, as they did in April. For me, the lack of dilution hints at a tale of sales recovery. So April not so good, May a lot better.

But really, I think the reason I am thinking more positively is that everything confirms the fact that Wave has expectations of something exciting happening around mid-year. I am identifying this with the US vehicular contract with however many units that was (150,000-200,000 units?) at a price between $65 and $100 per unit. Server work is ongoing on that side of things. BiOS trials running alongside. So my guess is there's a $10-20m contract potential coming to fruition around mid-year.

I am also guessing the vehicular contract is the pilot/template for other contracts with the DoD. Hopefully, less integration work required in future. In turn, I think this leads to opportunities with OEMs (not just with PCs but also with other equipment), and dominos expanding outwards from there.

The contrast is between on the one hand, current investor sentiment (nasty accident in rear view mirror) and the fog surrounding Wave's immediate future (dilutions, unsafe harbour, opaque releases, history of over-promising), and on the other, the scope of the opportunity which I think is very large indeed, as I have always done. When the latter becomes visible beyond the Wave community, everything changes rather suddenly, I think. I see the completion of successful BiOS pilots and the announcement of the vehicular contract as the likeliest moment of change.

I am trying to get ahead of that moment. For me, the reduction of risk occurred at the end of May. So June 1 was the logical point at which to change my stance.

My optimismometer remains at 7, because it is based on actual facts. But my speculationometer (new tool) is moving to a 9!


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The above is a reply to the following message:
The Granlibakken hypothesis.
By: DigSpace in ALEA
Sat, 02 Jun 12 7:39 PM 		Msg. 08258 of 54959

I understand your perspective. I still am trying to rationalize Q1. I can't go all Thailand on that.

There was a moment at some point where SKS said something to the effect of ... acquisition > training > ready to hit the field again.

Somehow one has to get all the way from Q3 or Q4 new billings all the way down to Q1 new billings (sans BP) and not describe it as nothing more than a collapse of their products.

O.K. 1. There was Dell, and that is costing them dearly, and I support the notion that this may well be transient, lowering the fee for ESC (mostly non-users) and raising the fee for TDM etc (users) will pay off if transition actually occurs. Taking 25 cents off of the volume item and replacing it with dollars of the lower volume item. It doesn't take a huge transition to recover that gap.

O.K. 2. Maybe some deals delayed over SEDs availability. Garter is not shy about calling Wave a one-trick (SED) pony. (this was pre-safend). But, seeing that their all important up-front cash deals are all depenedne ton SED volumes, I'll acccept some sales problems there.

So 1) Dell royalties down 2) no big deals - blame it on Thailand.

Still, on my abacus (pulled it from the smoker, took the fish of, its a little sticky now) I can't make reported numbers explain it using 1 and 2 from above.

So, how bout 3. Perhaps this "training" etc was really a more significant integration effort than they had "forecast". So while SKS indicated sales had been redeployed Q1, he hedged and said he expects ROeffort in Q2. He was excited about Q2 (and this was back at the annual CC not the Q1 CC).

So, as a temp Wave apologist, I'm willing to pretend that sales staff simply was not in Frankfurt or Dubai or Chicago ... they were in Granlibakken ( http://www.granlibakken.com/ ) *learning* and *retooling* and not selling.

So, with items 1, 2 and 3 ... I can then explain Q1.

Any Q2 surge is item 3 IMO. If so, that restores the forever DigWorshiped below 8k sales, and makes my gooey abacus much more pleasant to work with.

But seriously, 20-40% QtoQ?

And yes, as you mentioned ... they will require events Q3.

The claim is they will bag some Samsung revs this year (prev notions of mine of SamDevRev dismissed).

It is my experience that while America claims the mantle of innovation, on items that you don't covet but might need, EU is quicker (Safety, Security, Compliance, Identity). The culture simply accepts some costs more readily.

So who knows, maybe a significant Sierra hiatus and refresh cost more than expected, and the rebound is rapid.

I don't have parking lot photos, I don't know, and where I in Granlibakken, I doubt I would have had the discipline to notice.


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