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OCZ Technology Group Inc Message Board

  • lombardcae lombardcae Nov 16, 2012 6:44 PM Flag

    what are the chances of OCZ going to zero

    forget the cute responses just a straight question

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    • From my weekly channel check, I can say with some confidence that they are selling lots and lots of drives. There was definitely a channel clearing action for the EOL product over the past few weeks, but now the top ten lists only show Vector 4 and Agility 4 drives in various sizes. Assuming that they are making money on these drives, I think the chances of a BK are near 0. They don't have a demand problem, they have an execution problem and that can be fixed.

    • If OCZ goes under $1, they'll probably be delisted from the NASDAQ. That happened to a company I used to work for. The company had to do a reverse split to prevent delisting.

    • 0% chance of going to 0

    • Just replayed the Needham presentation, looking for a reason to keep
      the gun cabinet locked.

      RS said OCS’s sweet spot could be high end consumer and low end
      enterprise. Ie small banks etc. Sounds like a plan! Capitalize on the
      consumer success with some software tweaks, and deliver a commodity
      to a huge market. While this approach may lack the drama of a MSFT
      type win, Walmart has proven satisfying the needs of the less discriminate
      can be very profitable.

      OCZ needs a nuts and bolts solution. RS gets it. Give “business” an off
      the shelf swap out, and generate cash. Seems line of sight to me.

      I also took heart in his remarks about imminent pr’s about Bf3.

      I expect some of the carnage of the financials will be diminished by
      very upbeat forecasts with their release.

    • All you longs, shorts, holds, fake longs, fake shorts and fake holds are all funny. I think you are reading way to much into this.Yes, they had a problem with Qtr2 and the new CEO is fixing it and the process. The "one" customer issue is a "GOOD" thing and not a bad thing. That tells me it's very fixable. When OCZ reports before mid-Dec, and yes that was telegraphed by the CEO at the Nov. 14th conference, they will have cash on had (20M is my guess) and accumulated debt (5M is my guess) from the bank loan. The need for capital will happen soon and they won't have a problem getting it.

      There are TWO things missing in everybodies thinking:
      1) Their IP/technology is worth lots of money and that is know in the industry.
      2) Once they file buyout/takeout/hostile will be in play; either real or speculation. At these depressed prices a STX/LSI/INTC/WDC/Samsung/etc. could come in for a great bargin.

      I also believe the CFO (retired, not fired) will be around much longer. If he F--up he would have been out the door when the other 2? VP's were dumped last month. And as for RP being signed of for a year, that has nothing to do with the potential lawsuits. Any suits, if they happen, will take years.

      • 1 Reply to tvtman
      • I agree that ‘one small customer’ is a good thing – I’ve said so in previous posts. My issue is simple: why on god’s green earth would a public entity delay a Q for a rebate program issue related to ‘one small customer’ – it couldn’t be material. How does that comment scan against the CC where RS was taking ‘negative GM’, ‘significant revenue shortfall’, ‘inventory write-down’, and duck the question of restatement? The point is – it doesn’t. That’s my issue.

        As for the previous administration, I’ve never seen the details of their separation agreements… Have you?

        As for IP – what exactly is their IP? OCZ has some patents and the Indilinx acquisition, but that’s a long way from a technology play. Their business model is assembling other’s components for at least a Q or so until BF3 proves itself in the market.... While BF3 may become a revenue stream through licensing, it remains a distinct ‘maybe’ until the reviews come out. Indilinx was purchased for $30MM, doesn't have the long-term sourcing agreements of SF, etc. Despite what the delusional maintain, the Indilinx acquisition is not worth $250MM – sorry. Don’t say, ‘enterprise’ – they have no enterprise ‘technology’.

        As for the $20MM in cash, I get a number in that range as well – until I factor in the CC comments about inventory write-downs and negative GM… That’s the point where everyone doing ‘back-of-the-envelopes’ gets to... The question is how much of the $100MM inventory is convertible, how much is E/O? What will the Q2 rebate program cost them and what will the Q3 inventory write-down cost? They could have as much as $20MM going-in to Jan or as little as $5MM depending on how you run the numbers. We just don’t know, and we don’t have the numbers one way or another. If they are delaying the Q for this long over a ‘single small customer’, then something more fundamental is wrong.

        As for m/a – agree. They will be in play.

        Sentiment: Hold

    • The $64 question is cash… Without the Q, the picture is getting sketchier and the share price will continue to drift down as the uncertainty grows. Folks have been ‘back-of-the-enveloping’ on-hand cash and burn rate for a while with mixed results. The comments made at the CC don’t help and actually raise more red flags then answers: ‘significant revenue shortfall’, ‘inventory write-off’, ‘negative GM’, etc all have cash implications….

      The recent comment about ‘1 small customer’ is perhaps the most worrying of all… Delaying a Q has huge implications for a public entity – if you've never been an officer of a public entity, I can tell you that it’s one of the worst places you can be… There is no-way you delay a Q for a rebate-program limited to a single small customer – doesn't happen – ever... The ‘incomplete’ explanation of the Q-delay, reticence to give a date for the Q, soft comment on potential restatement along with the oblique reference to the SEC are all very concerning. Something has happened. We get that. It may be small or it may be huge. The issue is no-one knows – maybe not even OCZ at this point. In listening to RS, I got the sense that OCZ is not being deliberately obtuse, nor trying to time the Q with good news (as many have naively suggested). I got the distinct impression that he is struggling with something nasty and working through it. The reticence on dates could be genuine, and if so, that is very very concerning. If you don’t know when you are going to file, then you haven’t gotten to the bottom of the issue.

      To answer the question on b/k. It’s a crap shoot. Anyone who proclaims one way or another is just blowing smoke. I suspect the second round of layoffs will occur around mid-December with the final round in late-Jan/early-Feb. That should bring the company to around 400 employees and a much more manageable burn rate. They will identify a bridge funding transaction quickly, but won’t be able to consummate until they regain compliance. Any funding transaction will probably be linked to the existing loan instrument to keep everything copacetic. If all goes well, the quick infusion of cash from inventory conversion, the belt-tightening and existing on-hand cash will get them to the bridge funding transaction.

      Sentiment: Hold

      • 2 Replies to formersmallcap
      • 400 employees translates to a $200 - $220M company which would be a 50% haircut. They have a load of components for the SSD's they did a Stop loss on. NAND can find a home in a hoast of gadgets. We don't know what we don't know but as fast as they were growing I would be pretty sure they lost control of inventory as well as what was in the pipeline. I would think they would take the loss mostly in the 2Nd Q for the rebates but will have to choke down the inventory in the 3rd...could be a big bite. I believe we will see the 10Q's in Mid January...if not then longevity of the company will be in doubt.

        Sentiment: Hold

      • I appreciate your consistent and informative posts.

        What is your response to RS stating that he believes/hopes that he will have much more than a plan, and actually report numbers by the middle of December when the NASDAQ 60-day late-filing period expires.

        When he stated this on the Needham CC his tone (and this just my opinion) sounded as if he was implying, "We will get this done, I even can't believe it has taken this long".

    • $360M company with real cutting edge products, with a CEO who has turned lemons into lemon-aid if only for a while and a new entry into the enterprise ring with a hardware and software offering is not going to ZERO. Stock or Warrents to get the materials to build enterprise orders is not a bad deal or to bridge a shortfall of a few quarters is not a killer. A RS??? WHy? They have about 360 days to turn the corner before delisting and much better done on 120M shares than 70M. OCZ has: Preferred stock, $0.0025 par value, 20,000,000 shares authorized; No shares issued or outstanding at fiscal years ended February 29, 2012 and February 28, 2011.
      — —
      Common stock, $0.0025 par value; 120,000,000 shares authorized; 66,581,428 and 35,401,908 shares issued and outstanding as of February 29, 2012 and February 28, 2011, respectively.

      "Based on latest financial disclosure OCZ Technology Group Inc. has 67.65 M of shares currently outstending. This is 86.07% lower than that of Technology sector, and 80.21% lower than that of Data Storage Devices industry, The Shares Outstanding for all stocks is 79.23% higher than the company."

      Sentiment: Hold

    • there is a chance of every company going to zero. it sure don't take a lot to wipe out a stock. IF the sec revokes them it instantly goes to zero.

    • Small IMO. But I think the chances of a RS and significant dilution are high.

 
OCZ
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