STEC Inc. (STEC) finally started a rebound on Tuesday after the same analyst who warned of competition last week - knocking the stock down $9 - raised estimates and said to buy.
More importantly, I emailed back and forth with my technology expert and here are his latest comments on STEC.
I didn't see anything mentioning Pliant having any contracts, partnerships or even shipping drives yet. Pliant just looks like a startup company, there are hundreds of these because SSD is the next big thing. Their drives claim to offer better performance but they are publishing numbers for preproduction parts…STEC is publishing data for parts that actually exist, work and are being sold…STEC has preproduction parts that are much higher performance than what they are shipping but they don't need to advertise that, they are advertising real drives that are making money. There are going to be lots of companies claiming to be able to make SSD drives while STEC is already shipping product. Unless you see something that says "STEC recalls defective drives" or something saying that another company is shipping drives to a major server manufacturer at a lower cost, and that company shows a profit, STEC is the play.
As big funds search for growth stocks, I would not be surprised to see STEC rebound back to $40+ in the coming weeks.
Disclosure: Long STEC