Wave Systems Corp. (NASDAQ:WAVX) Jumps Back Up in an Upward Correction

[[tagnumber 0]] [[tagnumber 1]] [[tagnumber 2]]Wave Systems Corp. (NASDAQ:WAVX) shares dropped to an all–time low this week after the company announced the extended stock option plan at the end of last month. With a successful shares offering in May WAVX just managed to cover its huge working capital gap, yet as seen at a very high price.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 5]][[tagnumber 1]] [[tagnumber 2]]Yesterday, WAVX made an attempt to rebound, jumping 17.53% to a closing price of $0.40. Although the trading activity was very high with a total number of traded shares exceeding one million, or five times the average, the stock could not jump much higher within the recent trading range.[[tagnumber 1]] [[tagnumber 2]]Technical indicators remain bearish yet the accumulated pressure from the last session could make WAVX jump more at the open, especially if there are more short positions to be covered. Longer–term, outlooks do not seem optimistic for WAVX which looks overvalued even with a market cap of under $20 million.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]WAVX 10–Q for the first quarter shows the company‘s sales have dropped to less than half of the sales for the same period of last year. As operating expenses stay high, the net loss grew up this year. The lack of sufficient cash is also a huge problem, and given that the company has no hard assets to secure a loan, only intangibles and goodwill, it is no wonder that the stock market is the only option.[[tagnumber 14]][[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]In its public offering in May, WAVX sold 8,395,000 units, including the executed over–allotment option for the underwriter. In total, 8,395,000 shares were issued plus warrants to purchase another 4,197,500. Pricing was $0.65 per unit and WAVX says it raised $5.1 million in total proceeds, that amount being just enough to cover its working capital gap as of the end of March.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]It took some time for the stock market to adjust WAVX market price to the one suggested by the offering, yet it looks like the company is to dilute further its shareholders. In June, WAVX registered another over 6.3 million shares after it raised the number of shares issuable under the stock option plan and expanded the list of employees eligible to participate.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]]