I understand the ARS Issue. However, current stock price drop suggest major liquidity issues. As I understand it, DIOD's liquidity is as follows:
$ 82 million cash $13.5 million in a revovler that expries 12/1/08 Diodes borrowed 165 million with UBS against 300+ million that used in ARS. Worse case - the ARS offset by the 165 million debt is lost. $230 million in convertable notes not due for another 18 years.
Worse case, over $68 million in net cash to weather the worst of storms in the next 18 years.
What I understand from the Q&A of the CC was that part of the lower guidance for Q4 was due to cost reduction measures that would not become fully effective until the end of the quarter, therefore margins should be better next FY. When and how much revenue will pick up is anyones guess.
Here is where most of your loss was recorded last quarter.
"Although we are uncertain as to when the liquidity issues relating to these investments will improve, we consider these issues to be only temporary, and thus reduced the carrying value of the ARS to $284.8 million by recording a $22.7 million unrealized loss (net of $13.1 million tax effect) in other comprehensive loss."
It is a paper loss to mark to market the ARS. As long as they hold it they will recoup the unrealized loss in the future.
What you aren't missing is equally perplexed investors. There are a number of semiconductor houses with stocks down more than 50%, but I haven't run across any small-/midcap houses suffering as badly as DIOD. One significant negative was DIOD's next quarter guidance, which was lower than the estimates of some/all of DIOD's analysts, with obvious implications for the next FY - and there was not much clarification as to why the guidance was so low. Perhaps that was just DIOD's reading of the world economy. Anyone have any thoughts about that?