Ashraf Eassa
Long/short equity, contrarian, independent research, tech

Violin Memory's Structural Issues Persist, But Not Much To Play For On The Short Side

Violin Memory (NYSE:VMEM) went public on Sept. 27, 2013 at an offering price of $9/share. On the first day of trading, the company's shares lost 22% of their value to close at $7.02. In a rather bold (but prescient) call, I suggested that the shares - despite a steep post-IPO drop - were fundamentally a short. Indeed, with the company burning cash at an alarming rate (and at levels from which reaching a cash-flow positive state would require unrealistic levels of Q/Q growth), it was difficult to be anything but negative on the stock.

Following the company's most recent earnings report, the shares lost 48% of their value in a single session as the company disappointed both for...

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