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Hutchinson Technology Inc. Message Board

  • longtimefollower longtimefollower Nov 6, 2011 9:25 PM Flag

    Could the flood be an opportunity...

    ...for the industry to "rationalize" excess capacity, and/or trigger a consolidation transaction that might reduce three players to two? It would seem like the industry desperately needs more pricing power, and I just don't know why either of the other two players wouldn't be interested in " buying" HTCH's technological capability, at a fair premium to the current absurdly low price. I can't speak for the other large shareholders, but to the degree financial risk may go up considerably for HTCH, in the intermediate term, because of the flood, I certainly would be interested, as a 2% owner of the company, in exploring the possibility of getting a "bird in the hand," rather than risking dilutive PIPEs, or other crazy situations, if their LOC should end up being due in October of 2012.

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    • ltf, pj,

      I think any 'consolidation' wont happen till after the insurance issues are settled...and that probablhy wont be for a while.

      On the one hand it makes great sense for the industry to consolidate. On the other hand, which of the other two players is gonna fork over big cash and add a lot of debt to get capacity, which they dont need. Do the other two players really want a foothold on US soil? I dont know.

      As for the big drive guys, WDC could make a play for HTCH. But there getting the suspension systems so cheaply right now due to the competition amongs HTCH and competitors, that it may make more sense for WDC to just let these guys continue to fight it out.

      best.

    • 10:24 p.m. Sunday 6 November 2011

      After taking 15% (10,000) shares of HTCH off the table for a $10,000 loss, I am reviewing my sizable commitment to this stock....

      Of concern is the Needham review of last week which raised the projected losses for the fiscal year ending 30 September 2012 ($4,000,000 = -$0.15) by a factor of 20 ($80,000,000 = -$3.90). And yet, Needham repeats their rating of a "hold". How shaky is that....

      My mentor's review is that HTCH could lose $15,000,000 to $25,000,000 through 31 December 2011 quarter due to:

      1. 50% customer (WDC) has reduced DEMAND for HTCH products by 30% due to severe flooding in Thailand...

      2. Yearend Tax Selling could amount to an additional depression...

      Hardly scientific is the fact that this stock could easily trade down an additional 50% from current price to $1.00 by 1/1/2012....

      I reserve the right to reduce my position further without notice....

      Stock Network News (Coach Mathis)

      PS This message will be posted on the Finance.Yahoo.com HTCH message board....

    • speaking of desperate needs........... throw me a round life ring device..

 
HTCH
3.34+0.02(+0.60%)Mar 5 4:00 PMEST

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