wait until Monday when shares will be available for borrowing - this one will take a huge nosedive then
this no ATRM as the float is much higher and valuation already is 10x higher at above $100 mln at pre-market prices when calculating for the 12 million shares that will be issued to Baifen
stock already up nicely from Wednesday's after hours lows despite being downgraded by Jefferies this morning - very nice gain already - looking to exit at around $3.25
$189 mln in cash
$410 mln in term deposits
$310 mln in short term investments
$129 mln in long term investments
$160 mln cash from Baidu for 59% of Nuomi (paid in Q4)
this calculates to a liquidation value of around $3.20 per share and doesn't account for any other assets like customers etc.
calculating using the 12 mln shares which will be issued to Baifen the current market cap is approaching $100 mln - this looks like a great short
the end result is that the shares will end up being worthless, there's no other way. Toshiba pays a few million dollars for the assets and that's all. If Toshiba would have been willing to pay enough to cover ALL liabilities and some money for the shareholders there would have been no need to file for bankruptcy. The company would have been liquidated in an ordinary way instead, just like e.g. Sycamore Networks some time ago.
actually those were pretty much usual terms and covenants for a distressed company like OCZ. And it was the best offer available at that point. As a beggar you don't dictate the conditions. You can't blame current management for the mess Petersen created by cooking the books. You should rather ask yourself why you are still long the stock here.
unless they shares stop trading which they will at some time in the future. Just like the old EK shares a few weeks ago.
So WHAT should I do now ?
Realize your losses and learn your lesson from this mess. Then move on and delete OCZ from your watchlist.
So OCZ files for bankruptcy and is selling its remaining assets to Toshiba - will there be anything left for shareholders ?
No. Major creditor Hercules seized the remaining cash balances and will most likely get the money from Toshiba also to reclaim as much from its loan as possible.
But I understand there will be an auction process supervised by the bankruptcy court ?
Yes. But remember the company already underwent a lengthy review of strategic alternatives before entering the deal with Toshiba. Obviously this was the best possible outcome. So there won't be any other bidders and Toshiba will get its deal.
So - what will Toshiba pay - isn't it likely that they pay a huge amount so that shareholders will get at least some money ?
No. They are buying the assets out of bankruptcy on the cheap - most likely for just a few millon dollars if at all. If Toshiba would have been willing to pay a huge amount of money the company wouldn't have had to file for bankruptcy at all and Hercules wouldn't have seized the remaining cash balances.
What happens to the shares - will they continue trading on the Nasdaq ?
No. Nasdaq doesn't allow companies undergoing bankruptcy procedures to remain listed - the shares will be quoted on the pink sheets most likely as early as next week.
Is there any chance the shares will go back up ?
Yes. Shortsellers might line up to realize their giant gains - this might bring in some demand which might cause the share price to rise for a short span. You should sell remaining positions into spikes initiated by covering shortsellers and unfounded rumours.
Is there any chance my shares will go back up to my purchase price ?
No. This will vegetate on the pink sheets with price and volume approaching zero asymptoticaly until trading of the shares will cease completely. From time to time there will be some spikes but the shares will come back ultimately.
So would should I do now ?
Realize your losses and learn your lesson from this mess.
next trading day. Ask why ?
with the after hours decline the stock is trading very close to the value of its cash, short and long term investments and despite huge quarterly losses these assets remained almost unchanged qoq.
and while results and guidance were truly underwhelming it is hard to imagine that the share price will fall below liquidation value.
the forecasted big qoq revenue decline is most likely almost solely tied to the gaming business which will undergo a major restructuring meaning that the company obviously decided to cease commercial operations on most of its current underperforming games starting this quarter. The restructuring of the gaming division was already rumoured some days ago and some high level executives already left the company. So this does not come as a big surprise.
and don't forget the Baidu deal regarding Nuomi which will close during Q4. This will give RENN another $160 mln in cash and eliminate most of the losses from this subsidiary from the p&l statement as Nuomi will be separated from RENN following the completion of the Baidu investment. So the guidance might not include any Nuomi revenues at all.
The company's business seems challenged on all fronts - gaming, advertising and even Nuomi are all very weak and will get even weaker going into Q4. On the other hand the company is trading at cash value and has managed to strike a big deal with Bidu for its tiny loss making Nuomi unit.
I don't see much downside from current levels but there might be some upside based on hopes that the company might consider to sell itself given the dismal state of the business.
cash and long term investments are barely down from last quarter and amount to more than $1 bln - this won't go down within the next few years
lol - pure nonsense - if someone would be interested they would have made a deal. Remember that they were evaluating ALL strategic opportunities for many months. And bankruptcy coupled with an asset sale to Toshiba. This deal actually saves the jobs of most OCZ employees and therefore looks like the best possible outcome.
sure the stock is up tenfold since then in part because of some new product orders but mostly because of the momentum traders.
But at $12 mln market cap I wouldn't still call the shares overvalued here. They have just skyrocketed because of huge demand created by the momentum crowd which might persist at least one more day.
investors will ask questions about the next CFO leaving here
miniscule free float after the company just executed a reverse stock split last month (only around 1,000,000 shares outstanding altogether)
miniscule market cap (just $12 mln even after today's stellar rise)
great close on giant volume
I have to admit this one might gap up big time on Friday as all the right ingredients are added here
your broker doesn't guarantee for anything - the complete order book will be deleted when a security gets halted for trading.