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OCZ Technology Group AŞ Message Board

formersmallcap 69 posts  |  Last Activity: Dec 17, 2012 11:32 PM Member since: Oct 22, 2012
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  • Reply to

    One small customer....

    by formersmallcap Dec 17, 2012 10:36 PM
    formersmallcap formersmallcap Dec 17, 2012 11:32 PM Flag

    btw, if you read my posts, i use formersmallcap because i spent several decades as a Sr. Exec in several former small cap firms that made it to mid-cap while creating several $B in shareholder value... I made my $$ in growing publicly-traded entities... this is all just play $ for me...

  • Reply to

    One small customer....

    by formersmallcap Dec 17, 2012 10:36 PM
    formersmallcap formersmallcap Dec 17, 2012 11:27 PM Flag

    Wonder where the auditors were during all this? Anyone know?

    If they were deriving revenue from value-added services beyond simple auditing services (ex. systems implementations, secondary filings, etc) then we have a whole new ball game…

  • Reply to

    One small customer....

    by formersmallcap Dec 17, 2012 10:36 PM
    formersmallcap formersmallcap Dec 17, 2012 11:08 PM Flag

    Sorry dude.... I don't post that often... But I've been right at every step...

    If you look at my posts, I've been predicting this exact scenario for months. Just pull my ID and read my posts. I've been clear and consistent....

    'single small customer' didn't tie-out
    possible restatement
    inventory issues
    cash issues

    So read it and weep...

    The scale does take me by surprise, because it's gone WAY beyond control/governance issues. The SEC is looking at fraud at this point... Not 'single small customer', not minor control issues or governance oversight, but fraud... That's what the lawyers will argue... Someone had to know... The current CEO was on the board at the time... It's may not be fair, but that's the way it's going to play...

    It's obvious to anyone who has followed companies that restated full-year and have such steep cash issues. OCZ is in serious trouble. It's not game-over right now, but slow death.

  • Reply to

    One small customer....

    by formersmallcap Dec 17, 2012 10:36 PM
    formersmallcap formersmallcap Dec 17, 2012 10:50 PM Flag

    I don’t think the fan-boys get it at all…

    Most companies simply don’t survive restatements of this size. Lawyers cream their pants for this… I bet forty more lawsuits are filed by tomorrow night…

    OCZ will have to tie-up assets just to cover the exposure… And what’s even worse, RS was on the board during the restatement period and came-out with that ‘single small customer’ statement…

    Hope he enjoys his $700K…

  • formersmallcap by formersmallcap Dec 17, 2012 10:36 PM Flag


  • formersmallcap by formersmallcap Dec 17, 2012 10:29 PM Flag

    The next round of layoffs will be right around xMas.

    Regardless of all the mindless pumpers on this board, only a small percentage of companies survive the scope of restatement outlined in the press release. Until today, the lawsuits were just a distraction to be handled at arm's length over the next 12 months. Now, there is now no question that today the lawsuits have received enough ammunition to fell the beast. This is a dying animal that will liquidate assets to survive and the lawyers will pick at the carcass for months to come until it simply goes under.…

  • Reply to

    Shorts are in trouble &

    by joelwilson46 Dec 17, 2012 9:51 PM
    formersmallcap formersmallcap Dec 17, 2012 10:09 PM Flag

    Are you insane? This is going straight to $0.89 or lower...

  • formersmallcap by formersmallcap Dec 17, 2012 9:57 PM Flag

    Why the delay?

    Clearly, the numbers have been crunched so that’s not what going on.

    Some folks have posited that the delay is a play to line-up some good news to offset the bad news of the release. The Q2 numbers and compliance are material events to the SEC. Sitting on the numbers for weeks/months to line-up some good news would be akin inviting the SEC to just set-up camp in your offices. Wishful thinking, but don’t think so…

    For my $0.02 (and over a decade’s experience preparing closings/filings), OCZ hasn’t [yet] crafted a set of position statements around Q1/Q2 activities that the auditors/legal will bless. From post-Q2 statements, the activities around revenue recognition, inventory valuation, plant absorption and GM are being explored. OCZ is walking a tightrope – anything they release will be scrutinized by the lawyers, SEC, analysts, etc. Their release has to be squeaky clean – and paint a picture that is plausible. The story has to hang together to not add liability to D/Os, reduce SEC risk and not add fuel to the lawsuits… This is a tall order.

    If the plan was to pump sales in Q2 as part of an m/a play (as having been widely reported), then the auditors may take issue with Q1 GM and E/O because the sales didn't materialize – remember there was a ‘significant sales shortfall’, ‘inventory write-down’ and ‘negative GM’ attached to Q2... All this is REALLY hard to accomplish in a single quarter. We don’t know if the auditors will let the Q2 numbers go without a restatement.

    This next release will be a fun read – I’m not even bothering with the numbers… I know they will be bad and that is already in the pps… I’m going for the narrative sections… The Story, if you will…. I’m going to enjoy the carefully crafted narrative to see exactly how they paint RP's legacy…

    If the Q’s don’t provide enough enjoyment on this amusement park ride, just consider:

    We don’t know exactly what the SEC is looking at. We just don’t know… At a minimum, issues of control/governance. At a maximum, who knows?

    Based on post-Q2 statements, much of the revenue-line corrections will be recognized in Q2 and restructuring /inventory costs were in Q3. Unfortunately, we now need Q2 and Q3 to get a baseline. So we now need to wait until ??? for Q3 to see just how deep the hole is…

    We don’t know where cash is. The statements around ‘significant revenue shortfall’, ‘negative GM’, ‘rebate program’ and ‘inventory write-off’ are all ominous in a cash-strapped environment. Even a 50% conversion of existing inventory combined with 200 headcount reduction and max credit line means that OCZ is running on vapors. Cash must be the big-ticket agenda item at the moment. OCZ will not survive Q4 without a deal. And they must be in compliance for a deal to be consummated…. The concept of cash infusion sans dilution is just a pipe-dream by Kool-Aid drinkers. There will be dilution – the only question is how much.

    We don’t know how the activities of the auditors and SEC will influence the lawsuits. The statements around ‘significant revenue shortfall’ ,‘negative GM’, ‘rebate program’ and ‘inventory write-off’ don’t tie to ‘single small customer’. Whatever narratives the SEC/legal consultants are constructing now have to encompass that unfortunate missive. If the rumors are true that Q1/Q2 activities were all geared toward m/a and the whole thing imploded, then the lawyers will have a great deal to pick-apart.

    There is just so much wrong with this picture…. On the flip side, BF3 has lots of potential and could be the spring-board for something quite valuable – just maybe not in OCZ’s hands…

    So much is baked into the pps at this point, that it’s impossible to know if this thing is going to tank or fly. It’s pure B S to post definitively one way or another.

    This is going to be a ride… Some folks are going to be happy and some are not…

    Sentiment: Hold

  • Reply to

    Why the spike?

    by hokiestock Dec 17, 2012 9:56 AM
    formersmallcap formersmallcap Dec 17, 2012 10:11 AM Flag

    Considering the SEC is already sniffing around, I would strongly suspect someone would not be stupid enough to trade on non-public info.... although, you never know -- there is a lot of stupidity going around these days... If they are, then they can use the profits for the lawyers’ fees…

    It’s probably a short squeeze or something similar… It may trigger more trading at the higher level, but lacking info on a Q or plan, the pps should drift back down…

    Sentiment: Hold

  • formersmallcap formersmallcap Dec 6, 2012 12:14 PM Flag

    that's the point of blackout -- they know and you can only guess...

    Sentiment: Hold

  • formersmallcap formersmallcap Dec 6, 2012 11:22 AM Flag

    unless they are on a program, then it's a blackout until the Q2/3 are released.

    Sentiment: Hold

  • Reply to

    How does the Class Action Lawsuit Affect OCZ?

    by awdip55 Dec 5, 2012 5:05 PM
    formersmallcap formersmallcap Dec 5, 2012 5:28 PM Flag

    Without something material emerging, these lawsuits typically run out of gas after 6-12 months while costing OCZ time/$$ filing paperwork and depos.… Nothing serious… Just cost of business...

    The real risk is if there is a restatement, some material info revealed related to Q1/Q2 or something material in the SEC investigation. Any one (or all) of these things would transform the lawsuits from a simple pain-in-the#$%$ to a real issue…

    The risk is directly on OCZ, not their insurers (D&O, BC, etc doesn’t cover fraud).

    Sentiment: Hold

  • formersmallcap formersmallcap Dec 3, 2012 1:12 PM Flag

    There was a lot of bad news baked in at $1.15 (up to and including a $40MM loss), but not something as bad as a $80MM loss or a restatement… Positive reviews of Vector can’t possible overcome that…

    Folks clearly want to jump in with both feet, but want the numbers to limit the downside… Just that simple. If you want a small nibble, then go for it -- just remember, without numbers, this is really a flyer...

    Sentiment: Hold

  • Reply to

    New GM Profile?

    by josephjpeters Dec 1, 2012 9:39 AM
    formersmallcap formersmallcap Dec 1, 2012 9:40 PM Flag

    Too many moving parts to figure GM without STD cost, BOM, fixed/variable breakdown, etc. Of course, different GM per product line, so need unit mix as well…

    Some factors to consider:

    Discontinuing value-products = Lower volume = higher unit absorption = higher unit cost = lower GM

    Internal BF3 = No licensing fees, but at a fab transfer cost = lower cost (probably) = higher GM

    ASP pressure = lower unit revenue = lower GM

    Non-incentivised sales volume = lower volume = higher unit absorption = lower GM


    Some factors will improve GM, some push the other way. We’ll need to wait until Q4/Q1 numbers.. to get a handle.

    Sentiment: Hold

  • Reply to

    Q4 Positive Operating Profit?

    by mwhummel Nov 28, 2012 11:29 AM
    formersmallcap formersmallcap Nov 30, 2012 1:09 PM Flag

    Would be nice, but IP-based debt transactions are few-and-far-between....

    This will be a standard bridge transaction with preferred/convertible equity. Enough cash to successfully bridge and in-line with bleeding-down the lower-GM products and pivoting to the high-end. Perfectly valid strategy, very common and understood by the market, but not the completely dilution-free strategy some dream of...

    Sentiment: Hold

  • Reply to

    will ocz be profitable next quarter?

    by maverick421x Nov 29, 2012 2:44 PM
    formersmallcap formersmallcap Nov 30, 2012 12:25 PM Flag

    break-even. not profitable until Q1.

    Sentiment: Hold

  • formersmallcap formersmallcap Nov 29, 2012 10:23 AM Flag

    Not short myself, I’m holding for m/a sometime in mid FY14.

    Restatement of Q1 – moderate risk.
    Restatement of FY12 – low risk.
    SEC finding regarding controls/accounting treatments - likely.
    SEC finding of fraud – low risk.
    Planned rebates in Q2 drove artificial MFG volume variance in Q1 - moderate risk.
    Rebates in Q2 with Q1/Q2 volume variance and E/O position drives negative GM in Q2 – likely
    Volume variance not treated correctly in Q1, drives Q1 restatement – moderate risk.
    Q2/Q3 inventory adjustments much worse than expected – moderate risk.
    Cash position much worse than expected – moderate risk.
    Bridge transaction not on favorable terms -- likely.
    Executing bridge transaction would pops pps and largely offsets dilution – likely.
    Probability of BK - low

    Absolute worst case in the moderate risk arena: planned Q2 sales rebate program driving artificial volume variance in Q1/Q2 resulting in high E/O with favorable GM impact booked. Accounting treatment not correctly applied in Q1 or prelim-Q2 and now captured in Q2/Q3 with significant unfavorable GM and one-off charges against inventory. OCZ can’t convince auditors about Q1 volume treatment or STDs variance, forcing a Q1 restatement. SEC finds controls lacking and OCZ quickly responds with tighter audit committee review. SEC investigation dies-down. Restatement of Q1 lends credibility to lawsuits..

    Sentiment: Hold

  • Reply to


    by antioquenodemiami Nov 23, 2012 7:13 PM
    formersmallcap formersmallcap Nov 23, 2012 8:07 PM Flag

    OCZ’s recent comments about GM, the plan to convert excess inventory to cash and the rapidly declining unit ASP makes it difficult to interpret retail sales. Without the underlying data, it’s hard to divine whether these units are simply generating cash to fund operations and/or actual profit.

    Another issue is transparency – the Q2 date-slip has received explanations over the past 6 weeks that don’t completely satisfy the market. The most recent explanation that a sales rebate program related to a single small customer doesn't fit the data set. Unfortunately, recent comments suggesting that issues identified in Q2 will also be reflected in Q3’s filing have extended the ‘event horizon’ beyond the Q2 filing. Having the SEC snooping around does not help. Until the data for both Q2 and Q3 are released and OCZ regains compliance, the share price will most likely continue a slow decline until the data is made available.

    Sentiment: Hold

  • formersmallcap formersmallcap Nov 22, 2012 12:55 PM Flag

    Suspect the list is more like –

    Q2 filing and (maybe) restated Q1/FY
    Regain compliance
    Vector hits store shelves
    Execute bridge funding
    Q3 filing with inventory write-downs and restructuring costs from Q2
    Response to NASDQ warning for sub $1 price
    2nd Round of Layoffs
    File K
    Final round of Layoffs - Employee count down to about 400
    CC -- forward looking break-even in Q1
    Share price drifts back above $1.
    Licence agreement executed for BF3
    Board shops-around leaner-meaner OCZ
    Q1 posted near break-even
    OCZ acquired in late Q2 for around $5/share

    Sentiment: Hold

  • Reply to

    Expect Friday AM news release...Record OCZ Sales.

    by tvtman Nov 22, 2012 8:37 AM
    formersmallcap formersmallcap Nov 22, 2012 9:41 AM Flag

    Just what part of 'significant revenue shortfall' don't you understand? Maybe in your OCZ Fan-Boy universe this somehow translates to Record OCZ Sales, but I think the far more likely next press release will be the Q with 'Record OCZ Loss' and OCZ Restates FY12 ans Q1.

    Please stop these ridiculous posts -- they waste everyone's time...

    Sentiment: Hold