Looking some more into OCZ.
Let me start by saying the stock is very speculative and is in a steady downtrend. The CEO and CFO recently left (were forced out by the company's BOD). The strong rumor is that they botched a decent deal with STX, with the CEO demanding to be put on STX's BOD as the straw that broke the merger's back. I have no idea how this played out but no matter what transpired, the fact that they both are gone speaks volumes!!
Growth is being hampered by supply issues. They can't get enough NAND chips to create their SSDs. NAND is in high demand and it doesn't look like it will change in the near future. This is why a deal with a larger company would be ideal. WDC and STX are the strongest and best fits but OCZ could be worth a lot to many other similar companies.
It will be interesting to see how this plays out. Have their management poisoned the waters to the point of no return? Certainly, the stock's acting like this will be the case. I can help but think someone will want them, especially with their 50% growth rate. No that may come to a screeching halt if they can't get the components they need to build their drives!! However, if they can reach a supply deal, this company could be one of the most undervalued around....Big, big if with NAND supplies so tight!!
Revs past 4 years
156,145,190,365, 568E-cy, 800E-ny
EPS
-.56,-.64,-1.05,-.25E-cy, .46E-ny
Supply constraints are potentially their undoing. From the look of it, they probably have enough cash to proceed for the next 3 or 4 quarters. That's not much in the grand scheme of things. At the same time, their price is so cheap that it seems to be crying out to someone with deep pockets.
It will be very interesting to see how this plays out. $10/share would be a market cap around $700 Million.....
Strongly suggest to others that it will be best to wait until the next earnings report to see if the wheels are coming off. If not, then it is looking like a very solid growth story that's been derailed by the 2 key mgmt figures getting too greedy for the company's own good. My own speculations are all over the place. Did they pass on a supply deal, thinking that the merger would come through? If that was the case, now they are sitting on the outside, in the rain, looking in...thinking "coulda, shoulda, woulda"!! I certainly would have fired them (or let them resign) if something like this transpired!!
Also, as mentioned above, the stock trend is solidly down. No real bounces, only sideways for a day or 3 then back into the plunge. |
