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Re: Carrot officially deployed

By: Cactus Flower in ALEA | Recommend this post (0)
Wed, 20 Jun 12 8:18 PM | 95 view(s)
Boardmark this board | The Trust Matrix 		Msg. 08507 of 54959
(This msg. is a reply to 08505 by DigSpace)
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Hi Dig,

the worst thing about q1 was that it represented the total failure of the revenue maximising strategy.

you can't do that model without cash front running recognition, unless you have a fat cash balance to begin with. and of course, they dropped the ball on dilution when they still retained the credibility of their strategy.

they had a year to produce the major contracts to replace GM, so blaming Thailand is lame. they also has a much larger sales force with which to deliver those sales.

the problem is that they have now broken investor faith in the growth of income in the eras market. feeney had somehow managed to present the numbers to give the appearance of steady growth. but that definitively failed in q1. not his fault. the lack of sales/demand follow-through post-gm was striking.

now they have to prove q1 was an isolated instance, so it is critical that q2 isn't simply a small step back up, but that it shows genuine strength.

although wave has tried to provide some substance, i am afraid i think they have deliberately allowed flexibility so that they can explain away failure as delay. i am really interested in concrete expectations delivered in the form of q2, q3 and q4 revenue guidance. if they won't offer it, i remain sceptical about the timeline and hence the reliability of wave's prognosis.


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The above is a reply to the following message:
Re: Carrot officially deployed
By: DigSpace in ALEA
Wed, 20 Jun 12 8:06 PM 		Msg. 08505 of 54959

yup, any decent mil thingy closes the 35 to 50.

Wave now has significant history to push back against. They struggled for eons and then hit a stretch of c.f.b.e. only to have that completely fall apart. Their SP was treated well for achieving c.f.b.e., but the next time it will not be as generous.

C.f.b.e. is seen as a stepping stone to profitability but durably bouncing int and out of that status tarnishes the luster of it as a milestone.

I see Wave as a three tier equity:

1. they can't even pay their bills without equity (SP 0.8-1.2)

2. they can pay their bills but aren't making a GAAP_G/L dime (SP 2-3)

3. they record a profit (SP ?)

Had their progress been more uniform and less of the one step forward two steps back and had their statements been more reliable, the market would be more receptive.

Neither is the case.

I expect 2012 to move back towards SP 2-3. Obviously if *mil comes through with north of $10m, folks may reconsider, and allow the more robust 6-10x sales valuations it has historically enjoyed.

My lowball revs $35-40m = SP 2-3
A decent *.mil taking that to $50-55m = SP 3-5 (PS 6-10x).

The two 8-10m deals not happening? ugh. .3-.6

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