SeeekinAlpha positive article is dated Jan 24, so he did not refer to the unexpected Shelf Offering which may or may not happen....and so does not really address a big factor to potential stock price and the reason it dropped hard yesterday. For now I remain conservative....sold all I bought yesterday at the EOD and more... still own 25% my original buy. I will trade this based on market moves and company news.
Noway they do shelf at these prices. They may do it later in the Summer after a strong June quarter They will make all they can do for that quarter..... will take price above $10..... . and then..if outlook still of growth for next year, they have all options open, including secondary taking price down to $8. Still, a good buy here.
I guess the positive pre announcement kind of worried me.....made me somewhat suspicious for what did happened.... for now it is bottom fishing buying and sell on "good news", but I have the feeling, streamlining the business that is being accomplished, the need of secure and trusted local compute , the addition of the 2 savvy and experienced board members could change this. Their guidance seems conservative for this quarter, they could issue another updated one, but the key test is the June quarter which should be near $180MM if 2016 guidance is materialized.
Well, quarterly results and outlook were not bad.... and the fear of demise of this category of business proved immature, if not wrong. Things do look better and the addition of two savvy women board members will probably improve things further. Too bad the shelf announcement at this time, but it is just a possibility at any time, I don't think they do it at these prices. they may decide to take additional loan for now just to support their increased deals. A buyout by Dell, NTAP or HPQ is a possibility too,as those guys gain high end computing and integration expertise.....
I sold 65% of my shares just before CC, buying some today.
Yes, I agree, stupid decision at this time. Too bad at time they seem to be doing much better at last. As I said before, to accomplish their minimum June 2016 $600MM , they should have a strong 4th quarter.... they could have waited for that time, stock price could have reached $12 by then..... I would not be surprise they reverse this shelf offering announcement and resort to another loan for now.
They will not use this Shelf authorization at these prices..... they can extend the loan and wait for 4th (June) quarter which will be a very strong one, in particular as orders are picking up. An opportunity to buy cheap.
At this point, once that German biotech fund took 26.8% (active) stack in the company, I would not trade it for small change. Most likely they will find a buyer for much higher prices.... my guess above $20 easy.
Sentiment: Strong Buy