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Fusion-io, Inc. Message Board

  • berzeck693 berzeck693 Feb 21, 2013 12:11 AM Flag

    Why FIO will tank ( no bashing)

    Let me expose my point. As you know Violin Memory filed for an IPO in October and its reported that they raised more money than estimated. In the next few weeks someone will spread the rumor that Facebook or Apple "are testing" violin memory for their datacenters, the validity of the rumor is irrelevant, this will tank the price 10 %; who will spread this rumor ? obviously the hedge funds that invested heavily in violin memory; its perfectly possible that this companies at some point test those products, this will tank the price another 10 %; they will "test" the products not because they are planning to switch but as a bargain tool because they know that FIO can't lose any of those accounts so they will fight for a better price which in turn reduces the margin.
    IF one of those companies buy a tiny batch of Violin memory to implement a "datacenter" of two computers just to make backups for the grandmother of the secretary thats it, this will tank another 10 % easily. All of this before next CC; if the guidance is as bad as this one this will tank to 7-9 range easily.
    My advise sincerely is to wait until next guidance there is no other way to see it.

    You will live the nightmare that i ( and many others ) lived with OCZ, its the same pattern. For the record i adquired a short position at 16.16. I don't want to bash because i know how frustrating is to be a long and being constantly bashed by shorts.

    PD: Sorry my bad english.

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    • FIO closed a huge round of funding previous to going public. Now, while both solutions utilize flash memory, Violin in not a solution that you would just substitute for FIO, they are not the same. FB has their datacenters planned out and configured, and normal operating procedure is using FIO cards in each box that they have specifically made to plug right in. They aren't going to make such a change. Maybe they would use Violin in certain circumstances, but they are not the same. In fact, FIO is actually a software company, and that is their IP. It's not about putting as much speed and storage on one card, but rather the right amount without going overboard or wasting IOPs and distributing it across multiple boxes. Not having an appliance filled with flash. I just wish those who invest understand that. And also understand that FIO is still the leader in flash based storage, have a ton of IP, and could license the software to run all flash based storage devices and would kill it. Spinning disk will soon only be for archiving. FIO stock may be in a slump due to their numbers, but they are much more valuable then their current market value, it will be fun to see when everyone else figures it out. The stock market has changed anyways...its for people who have no patience and just want to see quick returns. It's rigged and more like gambling then anything else. They will be bought out, their IP is just too valuable.

      So now that I have rambled....I guess what you say could happen, but that would be due to uneducated idiots who only hear the words "flash memory" and get erect.

      Sentiment: Strong Buy

      • 2 Replies to dickiev3
      • That is one of the most educated and savvy posts every put on this board. Read it a few times and the first few pages of products and the last few Investor conference presentations before selling out your stock at the current bottom.

      • I agree in all what you said, FIO's main product is Software not hardware, FIO has a great future, hedge funds know this too, the point is that they will take this bad momentum to maximize their winnings with Violin IPO , you can read every where that "analysts" agree that Violin is in fact a threat to FIO, that is the only thing that matters now before next CC. The market tumbling doesn't help, and the automatic insider sells doesn't help neither. I am just talking what will happen the next two months before the next CC. Hedge funds know that they can tank this pretty hard, it just take one low life analyst in North Korea to claim that Violin is the next king of the SSD market and that's it . Once the stock of Violin is extremely high ( as FIO's was once ) then they will sell and this will begin to rise again. This is clearly not normal sell pressure. And worst of all, what happens if next CC the margin lowers a little bit ? oh yeah, our low life analysts will say "FIO is feeling the pressure", "FIO's is feeling the heat", "Facebook is testing Violin SSD's" ( it doesn't matter that they will put one SSD in the bathroom , that will be the headline ) sadly these ·$"%$· funds operate this way. It's impossible to go against these.

    • At the same time, it could be conceivable, to market Violin Memory at its highest price point, to push FIO higher. Violin Memory is almost half FIO size, and going public at $B2. Shoulde't FIO at that time demand even higher market cap?

      Good luck to all

      • 2 Replies to rashtchi
      • Yes the market is huge, but realistically FIO's market is three or four companies that's it, the plan is to diversify, i think they will eventually succeed, but the fact is the guidance they announced for this quarter shows that this plan didn't materialize yet; will the next quarter will be a different story ? maybe , but we won't know in at least two months from now. Everybody knows that if FIO loses one of it's big accounts then things will get really ugly. Do you sincerely think that they will be able to maintain it's pretty high margins for the time being ? if the margins lower just 1 % next CC what do you think hedge funds will speculate ? Apple and Facebook can ( and will ) literally blackmail FIO to reduce its margins just because the perception is that Violin Memory is a serious threat ( again it doesn't matter the validity of this claim ). Just the slim chance that FIO can lose one of this accounts its hell for this stock and hedge funds will try to modify the market perception that this chance is in fact bigger than it really is ( they are succeeding )

        Sentiment: Sell

      • Think about it, you invested millions in Violin IPO, and you just need a rumor that you have a (slim) chance to win a big account for your soon to be archenemy, this will send the Violin stock to heaven ( and FIO longs to hell ) forget fundamentals, they only need rumors. The general perception is that Violin is a serious threat to FIO, it's irrelevant the validity of this claim, this is the general perception period. Hedge funds are positioning Violin as the new major player in the hot SSD market. The worst thing is that neither Apple nor Facebook will deny this rumors, in fact they will support them because they will fight fiercely for a better price and they have the tools now; hedges know this and the market knows this too. What hedge fund will buy this stock now ? there will be only small rebounds because of traders cashing gains that's it.

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