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OCZ Technology (OCZ +2.9%) has spiked in afternoon trading, apparently on new M&A rumors....

OCZ Technology (OCZ +2.9%) has spiked in afternoon trading, apparently on new M&A rumors. With 40.3% of OCZ's float shorted as of July 31, it doesn't take much to cause a squeeze. (Seagate rumors: the rise, the fall)
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Comments (10)
  • osty
    , contributor
    Comments (24) | Send Message
     
    If OCZ technology has any new rumors, than the cat is already out of the bag.Stay far away,it's another bluff.
    20 Aug 2012, 04:09 PM Reply Like
  • serndipity
    , contributor
    Comments (193) | Send Message
     
    Seagate's Chief financial officer Pat O'Malley said the company would be interested in buying an SSD maker that has a "significant" share of the enterprise market.

     

    "We look at all technology product providers (for M&A) but what I would say is that on the enterprise SSDs, there's probably only one of them that really makes any significant money".

     

    Can't be OCZ Technology....they assemble consumer grade SSDs using common off the shelf parts, has never made a profit (e.g. per 10-K) and according to it's management, for the last 2 years, only about 20% of its products have been purchased for Enterprise applications (e.g. conference call transcripts and/or 10-K mention that about/almost/nearly 20% Enterprise usage).
    20 Aug 2012, 07:38 PM Reply Like
  • Bohsie
    , contributor
    Comments (929) | Send Message
     
    Serendipity,

     

    The reason they havent made a profit is that they are pushing growth aggressively these last couple years. With all the shorting, this is one stock that has a $10 a share or more potential before the end of the year. With or without a merger!
    21 Aug 2012, 06:15 PM Reply Like
  • Stratag
    , contributor
    Comments (5) | Send Message
     
    Bohsie, I just bought 1000 shares at 5.36 the other day. If you and the analysts are correct, I will be buying more before it hits $6.00 again.
    22 Aug 2012, 10:29 PM Reply Like
  • osty
    , contributor
    Comments (24) | Send Message
     
    Strat,You just don't get it. OCZ is not traded it's manipulated by its short traders.Ask any OCZ investor,especially the employees with share benefits.They are not very happy campers.
    23 Aug 2012, 10:27 AM Reply Like
  • Bohsie
    , contributor
    Comments (929) | Send Message
     
    Osty,

     

    I actually feel quite good that there is a huge amount of short sellers of OCZ stock. There is currently 23,921,210 short sellers that need to buy OCZ stock by some time period. With ~ 2 million shares traded on average per day, that would mean (if it was only the short sellers buying stocks), it would take 12 days for all those sellers to get out of this stock and stop the bleeding. Moreso, with trading numbers down immensely, it would take even longer. This means that any good news (or large jump in revenue growth, which is expected), you will have what is termed a Short Squeeze, where all these Short Sellers scramble to stop the bleeding and buy some OCZ stock. This in itself shoots the stock price up, as they are now competing with your Bull Investors also looking to buy some shares. The numbers that OCZ are showing in growth, and the massive amount of short sellers, coupled with the drop in investor activity, tells me that this stock is ready to pop, along with the US economy, which is currently showing all the investors out on the sidelines. in bonds and other safer vehicles, and so when the economy or any good news comes out, and the market shoots up, many of these sideline investors will rush to get back in.
    4 Sep 2012, 05:15 PM Reply Like
  • osty
    , contributor
    Comments (24) | Send Message
     
    Bohsie, Your logic is correct and very convincing.But OCZ has been up time and time again and usually comes crashing like an elevator plunging from the 60th floor.I think OCZ should be trading at $15-20 level.The stock is manipulated and never is given a chance to fly.I cannot explain this behavior.But for sure, it is a buy under $6.Just keep your eyes open when it takes off.
    5 Sep 2012, 10:53 AM Reply Like
  • Bohsie
    , contributor
    Comments (929) | Send Message
     
    I believe that right now, many investors are on the sidelines (if not the majority). Therefore, stocks with solid numbers, good sustained growth, and investor favorites such as Chipotle, Apple, Google, Lululemon are the ones that are receiving the majority of the interest. However, once the economy starts moving forward, and starts to heat up, many of these sideline investors will watch the market/stocks start to rise, and they will in turn start moving their money back into stocks so that they in turn do not miss the train, causing it to move up even more. I see some resemblances of OCZ with Lulu back in 2008/09, when they continued to show good growth, but continued to fall all the way down to $4 a share before investors realized that their growth was real, and sustainable. They are now ~$130 a share (adjusted for splits). I think this will be the same for OCZ.
    5 Sep 2012, 12:54 PM Reply Like
  • osty
    , contributor
    Comments (24) | Send Message
     
    Bohsie,
    `This is what I meant about OCZ.There is no reason it should be selling off like Nokia.Nokia was trashed today by an analyst who claims buying the shares is like throwing a "hail Mary" pass.So why is OCZ getting trashed the same way?Imagine if these comments were attributed to OCZ?
    5 Sep 2012, 03:08 PM Reply Like
  • Bohsie
    , contributor
    Comments (929) | Send Message
     
    Osty,

     

    Too funny! I saw the same stuff with Lululemon in 2007-2009. OCZ restates their Q2 revenue down to $110 - 120M instead of $130 - 140M, and everyone sells off. That's fine, I will pick up more shares at that price! Last year's Q2 Revenue was ~79M. That's still an estimated 45% growth in one year. They made numerous acquisitions in 2011, they are revamping their processes, and ramping up production, and that costs money. Do you think they are going belly up tomorrow? Seagate or some company would buy them up before that happened and the company has $40mm in net cash on its balance sheets. They have a 1-Year Projected Earnings Per Share of 763.64%! That's amazing growth, for a $5 dollar, no wait, no $4 dollar stock! The reason they are lowering their revenue is due to component shortages, which would effect the entire industry. There will always be ups and downs, however, I am extremely confident that OCZ will be much higher than $6 or 7 a share by this time next year, if not higher than $10 a share. If they are even 1/2 of their expected revenue next year, they will have a PE of 10.53. This year they will most likely have a PE ratio of 50 (if not closer to 40). Not sure what you are missing here, but just comparing OCZ to Nokia to me, isn't a savvy investment strategy. The only advice I could give OCZ would be to use Lululemon's underestimate, and over deliver strategy in their earnings forecasting, though it eventually gets built into the price anyways.
    5 Sep 2012, 06:15 PM Reply Like
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