I vowed not to blog this weekend until I finished my grading (which has a hard deadline of Monday). Alas I happened to visit the NYT website (to test the ad-blocking feature I just found in Camino) and found in Sunday’s paper what is the most hilarious business story of the week if not the year.
What makes it so effective is writer Danny Hakim’s dry treatment of a business absurdity:
The New York TimesRecognizing the absurdity, the Waveoids even have a habit of drinking Kool-Aid. There seems to be a bitter humor among the foolish speculators, some of whom tragically invested all their savings in a single stock. However, I would quibble with the characterization of the stock’s plunge as a “sheer cliff face”: it looks more like a landslide to me.
March 4, 2007
That Ship Will Come in, Right?
by Danny Hakim
Wave Systems has never had a profitable quarter. Ever. In nearly 20 years.
“We’re pursuing an opportunity, we have been for a long time, it’s much closer and we can actually now see the light at the end of the tunnel,” Steven K. Sprague, the company’s chief executive, told shareholders at its annual meeting last summer at the Grand Hyatt Hotel in Midtown Manhattan. “It probably fills the tunnel, actually, pretty strongly.”
That flickering light has been enough to attract one of the most devoted bands of investors this side of Berkshire Hathaway. But how do people keep faith in a company that has lost roughly $300 million since its inception in 1988 and has had nearly 50 consecutive quarters in the red since going public?
For the rest of us, Hakim offers a cautionary tale of huge financial losses by a company that helped create value (through the “open” standards of the Trusted Computing Group) but couldn’t capture enough of that value. As with many other technologies, it may be that Wave’s security software isn’t important enough (or protectable enough) to work as a stand-alone business model in an industry full of integrated giants like IBM, Microsoft and Cisco.