OCZ shares dived again yesterday, they lost 11.27% in value when the NASDAQ closed yesterday. The financial situation of the SSD manufacturer is worrying and the situation isn't encouraging which is why we'll keep monitoring it. Analysts all advise against buying OCZ shares because of the structural nature of the problems.
The $0.63 the shares are worth now isn't the lowest point ever, shares have been as low as $0.39. Recently shares went up after the announcement of OCZ's latest consumer SSD, the Vector 150 series. Slightly after the shares went 30% up. Reviews of the SSDs all indicate that the latest Vector 150 series SSDs are winners which might benefit OCZ in retail.
Unfortunately former financial disclosures have learned us that exactly their consumer division is the troublesome part of the company.The troubles started as the company had difficulties to publish their results over previous quarters which was required to remain listed on the NASDAQ. Due bad financial management caused by the former CEO, the company had trouble to meet the these requirements.
Last month the company was finally able to post the results and they weren’t encouraging. However, the last quarter showed the company is working hard to get their results up again. The new CEO of the company, Ralph Schmitt, is trying to clean up the mess that was left.Unfortunately it wasn’t the only issue the company was facing.
Growth capital provider Hercules would also supply a $20 million cash injection if OCZ would meet certain conditions. Unfortunately the company was unable to meet these conditions and had to amend a loan and security agreement with Hercules which also cancelled 3.9 million in warrants.OCZ also has to payback the loan to Hercules by June 2014, together with a $6.5 million loan fee. OCZ seems to be doing well on the enterprise side, but has difficulties on the consumer markets, mainly due issues with NAND supplies. Clearing the inventories impacted margins but the company hopes that it will benefit from that on the long term.
The Vector 150 series SSDs use NAND from Toshiba, which is rumored to be a possible candidate to purchase OCZ’s consumer division.
