Article: Balch believes STEC is mismanaged & spending too much money on R&D
Balch believes that STEC has been mismanaged, is spending too much money on research and development and should return cash to the shareholders. It has previously called for STEC to explore strategic options such as selling the company.
Balch's filing asserts:
[We] believe that [STEC] has lost the trust of its key constituents, including its customers, shareholders, potential strategic partners and potential employees. [We] believe that this lost of trust originates at the top, necessitating meaningful change to the Board and executive management team.
One of its board nominees is Adam Leventhal, the chief technology officer for Delphix, previously of Oracle and Sun, where he was involved with the development of the DTrace diagnostic tool and Sun's 7000 storage system. It's a small world.
Another nominee is Clark Singer, SVP of HANA cloud computing at SAP. Nominees such as these lend credibility, Balch no doubt hopes, to its directorial slate. El Reg notes that none of the nominees is listed as having any experience of running a solid state storage products company.
Balch says it remains "willing to engage in constructive discussions with management and the Board regarding the nomination of directors at the Annual Meeting and the composition of [STEC's] Board in order to avoid a protracted and costly proxy contest."
BH is right to believe that competitors feel their lack of STEC IP/technology and would pay a premium to book value if only BH would shake it loose and permit them to cherry pick.
If the market desires the product of STEC R&D, why criticize spending on it? Perhaps Mr. Singer's ability to compete with his employers storage partners is falling behind and needs the kind of boost only STEC can deliver. Perhaps there is a better way to a technology partnership than a proxy fight.
Why do you think competitors wish they had STEC IP? Is there something their products lack? Is there something they could not engineer and create if they do think they lack something? STEC's competitors are already creating and selling products. Some of those products are in former STEC customer hands. The time for IP licensing was two years ago. It's to late now. No one would license the IP because it's to hard to change the architecture and design from what they have now to something new. And expensive.
And nominating two tech people to the board when BH says they don't like R&D spending just further proves how stupid BH is.
If you are going to continue posting old articles, please at least post the DATES. You are acting as though no one who reads this board has access to the Internet on a daily basis. I have no problem with you posting, but at least be accurate.