Violin Memory: Interesting, Tempting... But Not Quite Worth The Risk
Vince Martin • 69 Comments
Vince Martin • 69 Comments
Turnaround Should Tune Up Violin Memory's Sound And Make It Sing; A Buyout Is The Coda
Contrarian Analysis • 35 Comments
Contrarian Analysis • 35 Comments
Violin Memory Is A Good Buy On The Pullback
Violin Memory's Collapse Continues, But How Does This End?
Ashraf Eassa • 49 Comments
Ashraf Eassa • 49 Comments
Fri, Jun. 24, 3:00 PM
Fri, Jun. 24, 9:11 AM
- Gainers: AAU +20%. VGZ +18%. MUX +13%. AKG +12%. GPL +13%. GORO +12%. GFI +12%. EMES +12%. GOLD +12%. AU +12%. SBGL +11%. EXK +11%. KGC +10%. HMY +11%. SAND +10%. ABX +10%. EGO +9%. SA +7%. IAG +9%. AUY +9%. CDE 9%. NGD 9%. AEM 8%. NEM 8%. GG 8%. NG 8%. FSM 7%.
- Losers: LYG -27%. BCS -26%. SAN -24%. RBS -23%. AV -23%. BBVA -22%. DB -18%. ING -18%. BT -18%. VNR -11%. TEF -17%. CS -16%. PUK -15%. MT -15%. AEG -14%. RYAAY -13%. UBS -12%. FCAU -12%. GNCA -12%. NOK -12%. BBL -11%. IPI -11%. TOT -11%. ANFI -11%. MNKD -10%. BCEI -8%. VMEM -10%.
Wed, Jun. 22, 3:00 PM
Fri, Jun. 17, 3:00 PM
Fri, Jun. 17, 12:47 PM
Tue, May 31, 3:40 PM
- Violin Memory (VMEM +24.8%) has risen above $0.50 on volume of 7M shares, far above a 3-month daily average of 1M. No news explaining the move has hit the wires yet.
- The struggling flash storage array vendor is up 41% since posting mixed FQ1 results on May 24. However, shares are still down 42% YTD and trade at a small fraction of their $9 2013 IPO price. A strategic review ended in March without a sale.
Tue, May 24, 5:16 PM
- Violin Memory (NYSE:VMEM) beat expectations with a narrower net loss and despite revenues that fell again Y/Y and sequentially, though less steeply Y/Y than last quarter.
- Net loss on a non-GAAP basis was $0.16, vs. a year-ago loss of $0.22. Gross margin was 42% (non-GAAP basis), vs. 48% in Q4 and a year ago.
- Revenue breakout: Product revenue, $4.16 (down 39%); Service revenue, $5.56M (up 5.3%).
- Cash and equivalents, restricted cash and short-term investments came to $49.2M at quarter's end.
- Shares had gained 14.2% today to their highest point in a month.
- Press Release
Fri, Mar. 11, 12:11 PM
- With fears about the company's long-term survival running high, Violin Memory (VMEM -25.9%) has fallen towards $0.50 after missing FQ4 sales estimates (while slightly beating on EPS due to cost cuts), stating it has ended its strategic review (without selling the company), and disclosing it has laid off another 25% of its workforce. The company's market cap is now at $50M.
- Violin once more declined to provide formal revenue guidance on its earnings call (transcript). However, it did forecast a sales pickup. CEO Kevin DeNuccio: "[W]e believe that our revenues have now bottomed from our difficult product transition, and believe we can increasingly grow quarterly revenues to a view at yearend that can produce 25% to 35% annual growth in FY 2017."
- DeNuccio admitted several factors created "challenges" for Violin's strategic review. Among them: "Industry disruptions" such as cloud storage, de-duplication, and storage virtualization adoption, the face Violin's Flash Storage Platform (FSP) is still "new and maturing in many new accounts around the world," and the fact Violin's "financial cost structure and losses were significantly out of balance with our current revenues."
- FQ1 cash burn is expected to total $16M-$18M. Violin, which had $76M in cash at the end of FQ4, is counting on its job cuts to help lower cash burn to less than $10M in subsequent quarters. Non-GAAP operating expenses are expected to drop to $18.5M-$19.5M in FQ1 from FQ4's $22.8M, and $16M-$17M in FQ2.
- Violin's FQ4 results, details
Fri, Jan. 22, 3:30 PM
- Plenty of tech names crushed over the first 20 days or so of January are sharply higher as the Nasdaq (up 2.4%) continues rebounding from Wednesday's intraday lows. Many still have sizable YTD losses.
- Big gainers among telecom equipment/component firms: Optical component vendors Oclaro (OCLR +9.5%) and NeoPhotonics (NPTN +6%), mobile infrastructure/services giant Ericsson (ERIC +6.2%), optical networking hardware vendor Infinera (INFN +5.2%), and microcap RF backhaul hardware firms DragonWave (DRWI +24.3%) and Ceragon (CRNT +10%). Ericsson underperformed yesterday following a pre-earnings Goldman downgrade.
- Among enterprise tech firms: Threat-prevention technology and services provider FireEye (FEYE +7.7%), big data software provider Hortonworks (HDP +16.1%), security software/services firm Rapid7 (RPD +9.1%), data governance software firm Varonis (VRNS +5.6%), and flash storage array vendor Violin Memory (VMEM +13.6%). FireEye fell slightly yesterday after making a Q4 pre-announcement and announcing a $200M+ acquisition. Hortonworks was crushed on Tuesday after a Q4 pre-announcement and stock offering shelf registration.
- Among chip industry firms: RF chipmaker Skyworks (SWKS +6%), audio codec developer Cirrus Logic (CRUS +7.3%), smart TV/home automation chipmaker Sigma Designs (SIGM +6.5%), FPGA/sensor hub maker QuickLogic (QUIK +9.2%), and chip equipment firms Axcelis (ACLS +4.9%) and Aixtron (AIXG +4.9%). Major Cirrus/Skyworks client Apple reports on Tuesday afternoon.
- Also up big: 3D printer maker 3D Systems (DDD +7.1%), Russian search leader Yandex (YNDX +7.5%), mortgage origination software firm Ellie Mae (ELLI +6.4%), Chinese solar firm Yingli (YGE +11.4%), and SMB Web services provider Wix.com (WIX +5.3%).
- Previously covered: Rosetta Stone, Live Ventures, HP Enterprise, Mitel, Mobileye, Qorvo, SunPower, SolarCity
Thu, Jan. 7, 2:56 PM
- The Nasdaq is down 2.4%, and the S&P down 2%, as investors continue fleeing to safety amid ongoing Chinese worries. Not surprisingly, many high-beta tech names are seeing much steeper losses.
- 5%+ decliners include action camera leader GoPro (GPRO -7.9%), fitness band leader Fitbit (FIT -7.6%), threat-protection hardware/software provider FireEye (FEYE -7.2%), video processor developer/GoPro supplier Ambarella (AMBA -8.6%), flash storage array vendor Violin Memory (VMEM -12.7%), capacitor maker Kemet (KEM -14.6%), and cloud healthcare software firms Castlight (CSLT -8.3%) and Veeva (VEEV -6.4%).
- Others include Russian search leader Yandex (YNDX -5.9%), 3D measurement/scanning hardware firm FARO Technologies (FARO -7.5%), ultracapacitor maker Maxwell (MXWL -9.1%), car-buying site TrueCar (TRUE -8.8%), analog/mixed-signal chipmaker ON Semi (ON -5.4%), online ad platform Rocket Fuel (FUEL -6.3%), and LED/chip equipment maker Aixtron (AIXG -6.8%).
- Previously covered: Chinese tech stocks, solar stocks, Everyday Health, SunEdison, Atmel
Dec. 23, 2015, 12:06 PM
- Hard-luck Violin Memory (VMEM +6.5%) has rallied towards $1 during a week that has seen NetApp announce it's buying flash array vendor/Violin rival SolidFire for $870M. The deal could be fueling hopes Violin, which currently sports a $98M market cap, will also find a suitor.
- Violin announced three weeks ago (along with an FQ3 miss) it has launched a strategic review. Maxim Group later estimated Violin's IP is worth ~$2/share, while adding Hitachi is the most logical acquirer.
- Shares still -79% YTD.
Dec. 4, 2015, 12:45 PM
- Two days after Violin Memory (VMEM -10.5%) posted an FQ3 miss, declined to provide sales guidance, and stated it has begun a strategic review, Maxim Group's Nehal Chokshi estimates the flash array vendor's IP is worth ~$2/share (for reference, Violin currently trades below $0.90). However, he also thinks Cisco and SanDisk, two firms seen as potential suitors, "have probably moved on by now," leaving Hitachi as the most likely buyer.
- Chokshi: "[W]e continue to believe there is value in Violin’s IP, as it is the only flash-optimized asset that has: 1) logical unit number (LUN)-selectable data-efficiency capabilities; and 2) high-end array data availability/durability capable of continuous data protection and stretch clusters ... the customer set between Violin and Hitachi meshes well, and the spend for Hitachi would be easily manageable."
- Shares are now down 34% since the FQ3 report came out, and 82% YTD.
Dec. 3, 2015, 12:59 PM
Dec. 2, 2015, 5:27 PM
- Clobbered three months ago after posting mixed FQ2 results and issuing light FQ3 guidance, Violin Memory (NYSE:VMEM) has fallen to $1.17 today after missing FQ3 estimates.
- The flash array vendor states its board has "authorized the exploration of strategic alternatives to enhance shareholder value and has retained the services of an investment banking firm to assist with the evaluation process." With Violin currently sporting a $117M market cap, the company wouldn't be hard for a bigger fish to digest, should one be interested.
- FQ3 details: Product revenue fell 63% Y/Y to $6.3M; services revenue rose 28% to $6.2M. Gross margin rose 900 bps Q/Q and 200 bps Y/Y to 56%. GAAP operating expenses fell 17% Y/Y to $27.6M. Violin ended FQ3 with $95.9M in cash, and $134M in debt.
- FQ3 results, PR
Nov. 23, 2015, 11:47 AM
- Pure Storage (PSTG -3.7%) is now down 19% since hybrid array vendor Nimble Storage posted an FQ3 miss and issued soft FQ4 guidance last Thursday afternoon. Enterprise all-flash array peer Violin Memory (VMEM -9.2%) is down 14% over the same time.
- Nimble was hit with nearly a dozen downgrades following the numbers, which the company (much more SMB-dependent than Pure and Violin) blamed on a delayed payoff for enterprise investments and the impact of its recent enterprise focus on SMB sales. Potentially relevant to Pure/Violin: Analysts raised concerns about incumbent storage vendors (EMC, NetApp, etc.) competing more aggressively over deals as public cloud adoption shrinks their addressable market.
- Both companies have made new post-IPO lows; Pure is now nearly $3 below its $17 October IPO price. Violin reports on Dec. 2, and Pure on Dec. 3.
Nov. 20, 2015, 10:19 AM
- Violin Memory (NYSE:VMEM) has joined Pure Storage (previously covered) in selling off after Nimble Storage (down 46.7%) missed FQ3 (October quarter) estimates and provided weak FQ4 guidance.
- Like Pure, Violin differs from Nimble (a hybrid flash/disk array vendor that depends heavily on SMB sales) in that it's an all-flash array provider that focuses heavily on enterprise clients. Nimble blamed its numbers on slower-than-expected traction for its efforts to grow enterprise sales, and the impact of its shift from commercial (SMB) to enterprise investments on the former business.
- The selloff comes ahead of Violin's Dec. 2 FQ3 report. Shares -75% YTD.
Violin Memory, Inc. provides persistent flash-based storage solutions, which is designed to bring storage performance in line with high-speed applications, servers and networks. The company was founded by Jon C. R. Bennett and Donpaul C. Stephens on March 9, 2005 and is headquartered in Santa... More
Country: United States
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