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  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    Wasn't surprised that there were no additional bids.

    On 12/3/13, the CEO sold his entire position at 20 cents / share. Not a good smoke signal, as he simply could have just sat on them.

    BTW, management could have made some really easy money and received a $1.275M bonus, had they been able to secure an overbid of only $5M higher than the Toshiba $35M stalking horse offer.

    Additionally, Toshiba provided up to $25M of debtor-in-possession financing (DIP) need to keep the doors open and lights on until now.

    This reduces the net cash received from the asset sale, to only about $10M, so the secured creditors will get pennies on the dollar.

    Sadly the bag holders (e.g. shareholders, unsecured creditors , vendors etc.) will get nothing.
    Jan 15 04:02 PM | Likes Like |Link to Comment
  • Over 1M affected as extended unemployment benefits expire [View news story]
    I know of several people who were 99ers.

    The benefit in our state is $675/week ($35,100/year) plus paying their COBRA preinums or a free PPO health insurance. That benefit was for a single person with no dependents. All they had to do each week was to state that they contacted (e.g. phone, email etc.) at least 3 potential employers to seek employment (none of those people were ever asked for verification).

    The Federal Government only lends the Sates the money needed to extend their unemployment benefits beyond the typical 26 weeks. In order to eventually pay the money back, my State increased the taxes on employers.

    IMHO, the dome and gloom of 2008/2009 is history and anyone who wants a job, can find one.
    Dec 29 11:58 AM | 12 Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    Actually your comment "Fact of the matter is, a company could probably form from scratch with less money than that and sell commodity SandForce parts to datacenters (pretty much what OCZ was doing)" is spot on.

    To this day, 95%+ of the OCZ SSDs are put together like tinker toys, using commonly available off the shelf parts, using controllers from LSI/Sanforce and Marvell.

    For example, even their latest and greatest, ZD-XL SQL Accelerator- Z-Drive R4 - PCIe SSDPCIe SSD uses 4 or 8 Sanforce controllers and the Intrepid 3000 Series, launched this week, uses a Marvell controller.

    It's been nearly 3 years since OCZ acquired Indilinx and the only SSDs using the BF3 are a couple of Vector drives. The the performance of the just launched Vector 150 SSD is middle of the among competitors.

    See AnandTech review at http://bit.ly/18J2zfc

    In a well research/documented Copperfield Research article, titled OCZ - The Master of SSD (Shady, Suspect, Deceitful), it was pointed out that Indilink was near bankruptcy when the company purchased it for $32M. This was during a time-frame when other SSD controller companies were being sold for $250M to $400M. OCZ then carried the Indilink acquisition, on it's balance sheet, as $36M asset classified as Goodwill and Intangible Assets (until the recent 10Q/10K restatements, when that asset pretty much vanished).

    Go figure.

    BTW, last month LSI/Sanforce launched their 3rd generation SF3700 (SATA and PCIe on 1 Silicon) controller.
    Dec 13 12:00 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    I don't feel that management should get any additional bonus for doing their job well (and for what they were already incented and paid well to do).

    That said, the bonus structure is askew.

    It promotes/rewards low achievement with easy money (e.g. $1.275M bonus w/ only a $5M overbid), while working to attain a much more significant overbid, pays little more (e.g. $1.7M for a $15M overbid and $2.36M for a $35M overbid).

    Pretty much tells me that management does not foresee a much higher bid, if any. Additionally, on 12/3, the CEO sold his entire position at 20 cents / share. Not a good smoke signal, as he simply could have just sat on them.
    Dec 12 04:34 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    Thank you for the clarification of where you read this filing.

    While it's clear that management has shopping the company for some time now, without any success, given Toshiba served as the only stalking horse, speaks volumes.

    As sneaky as the KEIP - Key Employee Incentive Plan was slipped in as part of a bankruptcy document, it seems to me that given the carrot on the end of the stick, there is not much, if any, expectation for a higher bid (e.g. 1.275 million with a 5 mm overbid, 1.7 million with a 15 mm overbid and 2.36 mm with a 35 mm overbid).
    Dec 12 02:59 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    What recently filed KEIP - Key Employee Incentive Plan?

    You state that " If you read the language carefully, OCZ states that while several parties have conducted due diligence over the past 6 months, only Toshiba was willing to serve as stalking horse."

    Can you please supply a reference source and link to this filing?

    Are your referring to the S-8, recently filed on 10/15/13?

    That is just finally registering the option shares of the 2012 Equity Compensation Plan, which was adopted by the BoD 6/24/12 and approved by shareholders 8/13/12 and has nothing to do with Toshiba's purchase of assets. See Exhibit 10.1 in that filing for details of the 2012 plan.

    Specifically, in the event of 'change of control', the plan shall becomes fully vested. Given that this is a purchase of assets vs. a stock but-out/merger, the expected benefits, on a plan written more than 1 1/2 years ago, is null.
    Dec 12 02:18 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    >>Umm, the risk of loss with both common stock and options has a limit - 100% in both cases

    Sure, in terms of percentage, an option or equity could only lose 100%.

    However, in terms of out of pocket money, an options position mitigates loss, while the underlying equity does not.

    For example, everyone who bought 100 shares for $1/share, has lost 95% of their investment and only has $1 left.

    At the same time, anyone who bought a Put option for the same 100 shares, made a sinful amount of money, with only pennies at risk.

    There is a huge difference between buying a call option and an equity.

    Options provide control of underlying stock with 100:1 leverage, mitigate risk and have guaranteed contract performance.
    Dec 12 12:57 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    There is a huge difference between buying a call option and an equity.

    Options provide control of underlying stock with 100:1 leverage, mitigate risk and have guaranteed contract performance.

    For the last 2 years, the only OCZ investors that made money, where those who shorted the equity (100% ROI) and those who bought puts, scored a 100X that ROI.

    As example, over the last several months, while OCZ traded for plus/minis $1, one could buy out of the money Puts for a nickel.

    Unlike buying the equity, where the risks of loss has no limit, an option buyer could not lose more than cheap option premiums, yet score huge.

    Buying OCZ stock today, even at a dime a share, is only for the die hard gamblers, who know nothing about risk management and usually walk away from the table busted.

    The dime you have today, could just as easily turn to a nickel (a 50% loss), a penny (a 90% loss) or zero (a 100% loss).
    Dec 12 11:59 AM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    Do you truly think management hasn't already knocked on all the doors searching for a better deal, but coming up with none?

    That was pretty much confirmed, earlier this week, when the CEO sold his entire position, for 20 cents a share.

    There will be nothing for the bag holders either.

    OCZ entered into a Material Definitive Agreement to sell substantially all it's assets to Toshiba for $35M, less a $23.5M lifeline financing, provided by Toshiba for OCZ to operate it's businesses for the 60 days or so expected to finalize the bankruptcy proceeding. Additionally, any additional liabilities, in excess of $500,000, over the liabilities reflected on the balance sheet as of October 31, 2013, will be deducted from the sales price of $35M.

    The most OCZ will net from the asset sale will be $11.5M and perhaps less.

    The company also said that as of the date it filed for bankruptcy, the secured debt owed several PIPE lenders and vendors, was in excess of $60M (e.g. more than 5X the proceeds received after selling it's assets).

    Additionally, the Agreement also provides for a $1,050,000 break-up fee payable to Toshiba, as well the reimbursement of Toshiba’s expenses of up to $750,000.

    Like most options, the stock will be worthless, marked down to zero and cease to exist.
    Dec 11 05:58 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    Now you know why Hercules seized the company's bank accounts.

    1. The $35M asset sale to Toshiba is only half of what the company owed creditors and vendors on 8/31/13 (see 10Q).

    2. The debtor-in-possession financing (DIP) that Toshsiba is providing, will not not only reduce the monies received from the asset sale, but has priority over prebankruptcy secured creditors.

    Sadly, shareholders will get nothing.
    Dec 2 08:29 PM | 2 Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    If you check further, Toshiba's new Q series SSDs use a jointly designed Marvell / Toshiba controller, with both names printed on the part.
    Nov 30 02:44 PM | Likes Like |Link to Comment
  • OCZ: Beware The Message Board Pumpers [View article]
    Do they really think management and Deutsche Bank hasn't already knocked on a lot of doors searching for a better deal?

    At 11 cents a share, the Street and smart money thinks otherwise.

    http://bit.ly/199oARd
    Nov 29 02:13 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    No doubt the company's NAND supply issue was only about them operating with borrowed money and being of credit watch.

    For the period ending August 31, their total current liabilities were $59.33M, which consisted of an accounts payable of $36.80M and short term debt of $22.53M. Note: also that their accounts receivables were only about $9M and their current cash position is all borrowed money.

    Perhaps you recall that a year after the company acquired Indilink, they announced the Everest controller that was actually a re-branded Marvell controller.

    http://engt.co/1c1uqVq

    Maybe it is only coincidence, but the company's highly taunted R5 drive (Marvell based), announced late 2011 and shown at CES 2012, has yet to be shipped.

    Additionally, I remember the company buying a ton of wafers from MU and trying to turn it into finished NAND chips. At the time, I also recall hearing some gossip/rumors, in regard to an issue with the branding of the finished NAND chips.
    Nov 29 01:55 PM | Likes Like |Link to Comment
  • OCZ Technology - Dead And Done But With A Silver Lining [View article]
    Don't foresee any silver lining.

    1. The terms of the shareholder derivative suits were predicated on the company instituting a 'get well' plan, therefore unlikely to be approved / paid.

    2. Even when the company believed that it was an on-going concern, it's total liabilities were more than it's assets (see 10Q for period ending 8/31/2013). Now add in subsequent cash burn, OpEx etc..

    3. Why is Hercules forcing the issue now? What scared them?

    Now we know why Hercules no longer wanted cheap Warrants and instead opted for a Warrant conversion fee of $6.5M cash payment.

    The monies owed Hercules in June, are around $20M (e.g. return of $10M principle, interest and all fees) and they are 1st in line, secured by any and all company assets.

    What do they know about the Toshiba offer?

    4. Per all the SEC filings, conference calls etc., for the last 4 years, the company's stated strategy has been to sell higher value products to the Enterprise, but with no joy (read the filings and CC transcripts).

    Sales has been flat lined at 15% to 20% of revenue or about $20M / quarter.

    Additionally, all of their Enterprise high value products are low value add by the company, assembled Lego style, using commonly available off the shelf components (including LSI/Sanforce or Marvell controllers).

    Easy to say they could have, should have, but what changed that leads you to the 100% Enterprise conclusion?
    Nov 29 10:38 AM | Likes Like |Link to Comment
  • OCZ Technology - A Gambler's Delight [View article]
    Companies don't just announce they are going bankrupt out of the blue; they are always many warning signs

    The most important value that shorts provide is that they are real time financial detectives and ferret out management's wrong doings.

    Had Bernie Madoff been a publicly traded company, the shorts would have found him out a long time ago.

    The regulators had no idea of what he was doing.

    All they do, when a wrong doing is discovered, is look backward and shift through the rubble of a lot of lost money.

    In this matter, two things really struck me about the short interest.

    1. Although they were already already up huge on their short positions, with the stock is trading for pennies, their resolve has remained steadfast.

    2. In the end, they will not buy to cover their open short positions. The company will be delisted, try to sell assets off to pay off it's creditors (lenders, vendors etc.) and just disappear. Eventually, the stock brokers will mark the position down to zero (meaning that the value of the common stock in their eyes is nothing) and they will be able to cover their short position for a 100% gain.
    Nov 28 01:33 PM | 1 Like Like |Link to Comment
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