STEC: Trading Near Cash Value, 140% Upside Potential By 2014

It's not often that I would bet against a company with a large cash position relative to its market price. In fact, one of my favorite metrics to look at when I begin a screen for underappreciated, deep value plays is the net cash relative to market capitalization. My view is that having a stockpile of cash to cushion several quarters of losses is a critical weapon against bankruptcy for a company that is executing a turnaround gambit. While some turnaround plays dilute their way out of a tight spot, this usually severely damages the holdings of current shareholders.

Let me introduce you to STEC (NASDAQ:STEC), a company with no debt, trading at 80% of net cash on its books and likely well below liquidation value, that is executing a turnaround play in an industry that is experiencing very high secular growth.

STEC's Rise (1990 - 2009)

STEC was founded in March, 1990 by Manouch and Mike Moshayedi as Simple Technology, Inc. A few years later, a third brother, Mark, joined the firm. The company began as a provider of computer memory modules. However, that business very rapidly became commoditized and it became next to impossible to make any significant profit margin by selling memory modules.

The company then made the shrewd move to purchase Cirrus Logic's (CRUS) flash controller business, which gave STEC's business new life as a supplier of flash solutions for consumer electronics. As momentum built, STEC managed to pick up flash card vendor SiliconTech in 1998 and soon thereafter launched a 1GB IDE solid state drive. Keep in mind that flash memory was incredibly expensive back then, so this was a niche, high end product.

After its 2000 IPO, STEC purchased Memtech SSD in 2005 and Gnutech in 2006. In 2007, STEC sold off its consumer flash business and became a pure-play enterprise solid state drive vendor. The focus would soon pay off as the company's release of the ZeusIOPS SSD, which was one of the, if not the, world's fastest enterprise-grade SSD in 2008. In 2009, EMC (EMC), a leading provider of enterprise storage systems, announced that it had chosen STEC's SSDs for some of its solutions. Investors, of course, believed that this was the beginning of further design win momentum rather than the short-term burst that it turned out to be.

STEC Revenue Quarterly YoY Growth data by YCharts

STEC's Fall (2009 - Present)

After the initial giddiness that the share price saw as a result of the multi-quarter acceleration of revenue growth, shares took a nosedive when it was clear that such high-octane growth was unsustainable. It wasn't just the revenue growth that fell by the wayside, as net income and gross margins tanked as well:

STEC Gross Profit Margin Quarterly data by YCharts

The Market Opportunity Is There...

While it may seem from these numbers that there may be a broader industry-wide slump, STEC's problems are uniquely attributable to STEC. For some context, Research and Markets projects that the market for SSDs will grow from 382,000 units in 2011 to 3.9 million units in 2016 (a CAGR of 59%). Correspondingly, revenues are expected to grow from $582M in 2011 to $3.5B in 2016. While many pure-play flash vendors are private (and thus revenue growth metrics are unavailable), the industry trend is clear:

• EMC, a leader in enterprise storage, has begun aggressively pushing flash solutions (such as its VFCache)
• NetApp (NTAP) has adopted flash caching solutions and has partnered with Fusion-io (FIO) for PCIe flash drives/accelerators
• IBM (IBM) recently picked up Texas Memory Systems in a bid to enhance its considerable server offerings with in-house flash memory solutions
• Intel (INTC) has been aggressively expanding its line of SATA enterprise SSDs and even rolled out a line of PCIe drives
• Micron (MU), a major provider of NAND flash and leader in the consumer SSD market, has also been expanding into the enterprise space with new offerings
• OCZ Technology Group (OCZ), despite its numerous woes, has even aggressively shifted gears in a bid to capture some of the enterprise SSD space (I am, if you are a follower of my coverage of OCZ, not particularly thrilled with this firm's prospects, but they nevertheless compete)
• SanDisk (SNDK) has expanded aggressively into the enterprise SSD market, especially with its acquisition of FlashSoft

In a market that is exhibiting clear secular growth, STEC was unable to maintain its previous revenue levels, let alone grow. What happened?

STEC Revenue Quarterly YoY Growth data by YCharts

Intense Competition & Inadequate Marketing Efforts

One of the major reasons that STEC has seen sub-par financial performance over the last year is that, despite the secular growth of the sector in which it plays, competition was able to catch up -- and then surpass -- the company's efforts. In a recent interview, STEC's interim CEO (the official CEO is still dealing with insider trading charges with the SEC) had the following to say:

Question: More than two years ago, STEC was the king of enterprise SSDs and it's not the case anymore. What happened?

Mark Moshayedi (Interim CEO): The competition. We started the enterprise SSD business in 2006. We engaged EMC in 2007 and by January 2008 we made the announcement that flash drive was now qualified for the EMC system. That was the start of the whole enterprise SSD market. It wasn't until October 2011, I believe, that competition was able to create a product that was competitive to our SSDs. As a result, there is a lot of competition, people are now engaged in selling SSDs to the major OEMs which used to be our major customers.

The competition was not only able to release competitive products, but one particularly fierce enterprise SSD competitor -- Fusion-io -- was notably able to out-market STEC (in addition to having a "better" product). The following excerpt from the aforementioned interview speaks volumes:

Mark Moshayedi (Interim CEO): When we started, the only place where people could really use SSDs was the enterprise storage, not server side. It required a lot of hooks for the server side to pick up. And that may be one of the mistake that we've made. We focused so much on enterprise storage that we didn't pay much attention to the enterprise server side. Fusion-io came in and they purely focused on the server side. These accounts require a lot of hand-holding. From what I understand today, Fusion-io has 180 sales people that just sell to enterprises. We have today less than 10. We're adding a lot of sales and marketing people to be able to engage with those customers. We have the products, we need to go to those customers now.

These statements are confirmed as we look at the trend in SG&A over the last several quarters:

STEC SG&A Expense Quarterly data by YCharts

A little concerning, however, is that management actually seems to be cutting a bit into R&D to fund the sales team expansion:

Mark Moshayedi (Interim CEO): Over the last three years, STEC has been building its engineer organization. As you hire you get a lot of good people. Over the next few quarters we're looking at reducing that. It's a normal business practice, right-sizing your business for the amount of sales that you have.

This has not yet manifested itself in the R&D numbers as of the most recently reported quarter, but this number should be eyed in the upcoming earnings release (and questions should be asked if R&D doesn't stabilize/come down):

STEC R&D Expense Quarterly data by YCharts

The tricky part of this circus act, though, is that if a company cuts into R&D too deeply, the products become uncompetitive, and no matter how great of a sales team it has, the products simply won't sell (unless they are offered at significantly lower gross margins than those of peers). Interestingly enough, compared to PCIe leader Fusion-io, STEC's R&D isn't too far behind in dollar terms. The catch, though, is that Fusion-io is a pure-play PCIe/software focused group while STEC is trying to offer alternatives to Fusion-io's software solutions in addition to numerous SATA/SAS solutions, which could dilute the competitiveness of the offerings.

Further, Fusion-io's sales are growing and its gross margins are much healthier than STEC's, so it is also not clear if STEC could maintain a long-term competitive position at current revenue/margin levels.

FIO R&D Expense Quarterly data by YCharts

FIO Gross Profit Margin Quarterly data by YCharts

STEC Is Tweaking Its Business Model

Despite intense competition in this field, I believe that STEC's product line-up is finally where it needs to be in order to be competitive. The firm now has a PCIe flash caching solution (that is currently being tested by customers), its next generation of SATA/SAS drives qualified with its key customers, and, as noted above, is operating in a market that is undergoing explosive secular growth.

One thing that is critical to point out is that STEC has fundamentally changed its business model. Previously, STEC only supplied products purely to OEMs. That meant that companies such as EMC, NetApp, IBM, and the like bought STEC's products for inclusion in their own products. The problems with this business model are fairly clear:

• What if a customer wants to build his/her own storage system and simply wants to buy drives, rather than a full package from the aforementioned storage solution OEMs? This leaves a significant amount of business on the table.
• What if one of the OEMs decides to move to a competitor's solution (or build one in house)? This dependence on OEMs (~70% in the most recent quarter) is a source of non-trivial vulnerability.

Management has very clearly expressed its desire to have a 50/50 mix shift of OEM/direct enterprise customers, and on the most recent call, interim CEO Mark Moshayedi was actually optimistic that the mix could be even more skewed to direct customers than half of the business by 2H 2013:

Rich Kugele - Needham & Company

Okay. And, then just lastly, how long do you think it will take for this transition to be, call it, half your business?

Mark Moshayedi

We hope that by second half of next year it's actually larger than half of our business.

Not only does this mix shift reduce the risk profile of the business, but it also leads to significantly shorter qualification times, which leads to a shortening of the time between a design win to sales and recognition of the revenue from said sale. This will lead to a more consistent business with better visibility.

However, despite these restructuring plans to position the business more in-line with the realities of the market, the compelling "buy" case comes from the relative safety of this speculative play as afforded by the company's tangible assets.

Trading Near Cash Value, Below Liquidation Value

STEC's market capitalization as of the most recent close came out to $242M. The net cash on STEC's books (the company has no debt) comes out to $186M. While the company has been posting net loss after net loss, cash burn has actually been fairly modest.

STEC Cash from Operations Quarterly data by YCharts

With the company's new product cycle, coupled with its business model changes, I believe that we will see perhaps another quarter or two of cash burn at the ~$20M level before the company is able to get back to a cash-flow neutral-or-better state.

More importantly, this does not include any property or patent assets, which could be worth considerably more than the current market valuation suggests. In fact, according to the interview with the interim CEO, the company, in addition to its $187M in cash, has $200M in other assets. Even if he is exaggerating the value of the "other" assets by a factor of 2, the company is still trading far below liquidation value, and certainly very close to tangible book.

Insider Buying

Another truly stand-out positive is the insider buying over the last several months:

The insider purchases signal management's confidence that the business could actually turn around and succeed. As the old saying goes, there are many reasons for an insider to sell, but only one reason for an insider to buy: because he/she thinks there's money to be made.

The Upside Drivers & Price Target

While I believe the case for strong valuation support at the $4-$5 level, the stock still needs an upside catalyst. For the current year, analysts estimate that STEC will lose $1.00/share (which means a $0.32 dent into the $3.99/share in cash the company has), and then in 2013, analysts estimate the losses widen to $1.05/share.

These estimates seem far too pessimistic, and any indication that the current fiscal year will be better will likely relieve the downward pressure on the shares. For instance, the revenue growth for the next year is expected to come in at $17M, or a mere 9% from 2012 levels.

My belief is that, in addition to the structural changes noted above, the following major upside drivers will allow STEC to grow much more in line with the broader enterprise flash industry as a whole.

PCIe Solution Can More Than Account For Projected Growth

STEC, as noted previously, has a viable PCIe flash accelerator hardware + software stack is now available and in the hands of customers for testing and/or qualification. Given that Fusion-io alone is projected to see ~$425M/yr in sales for CY2013 (there are other players here too, such as OCZ, LSI, and Intel), it is possible that the company may recognize ~$30M in high margin sales as soon as CY2013, assuming very modest market share (~10%) goals, that are purely incremental to the existing revenue base from this product offering alone. Sales of this product are purely incremental as STEC does not offer a PCIe solution today.

Quantifying The Direct-To-Enterprise Opportunity

The company expects non-OEM sales to comprise ~50% of sales by 2H 2013. Assuming even a conservative view that sales to OEM partners sees no growth, this would imply that the OEM sales would increase from the ~$51M/yr that we see today to more along the lines of a $119M/yr run rate, which would help push estimates far past the $188M/yr that analysts expect for the year ending in December 2013.

Margin Expansion More Than Likely

The growth areas are particularly focused on software as a differentiator, which means that ~10% market share in PCIe, assuming all other areas fixed and further assuming a 50% GM (below FIO's ~55-60%) could contribute as much as 200bps to the blended gross margin line. The long-term target of 40% gross margins are quite reasonably achieved as the business adds higher gross margin products to the lineup. A ramp in volumes will also dilute the impact of the various fixed costs that exist, which should further prove to be a tailwind during this recovery.

Wider Loss For 2013 Seems Pessimistic

If we see a cutback in R&D spend, and if we don't see too much more expansion on the SG&A line, then improving GMs coupled with improving sales make the analyst estimates of a $1.05/share net loss for 2013 seem unrealistic in light of the $1.00/share loss for 2012.

More broadly, according to management, STEC needs a ~$70M/quarter run rate at ~40% gross margin to achieve breakeven. On one hand, this is a near doubling of revenues from the current $35M - $40M base, but the broader market is growing at ~40% CAGR and, more importantly, STEC has had to "sit out" with outdated products. This is no longer a problem, and it seems very plausible that by the fiscal year starting in 2014, the company will meet/exceed the breakeven level.

Finding A Price Target

At that point, STEC would be doing ~$280M+/yr in sales, which, even assuming a full $1.05 loss in 2013, would value the company at $3/share in cash + $2-$4/share in "other assets" + EV = 1x sales ($6/share using a share count of $46M) = $11 - $13/share. This implies 140% potential upside with worst-case downside to $3/share in the next 12 months, assuming the market values the business at $0 and the company truly ends up burning $1/share in cash during CY2013. This further excludes the value of any patents, property, plant, and equipment that could be liquidated and returned to shareholders.

The Risks

Of course there are risks. This is very much a turnaround play that hinges on three major factors:

• STEC's ability to put out competitive products
• STEC's ability to market said products in an environment of fierce competition
• STEC's ability to keep cash burn at a minimum during this transition period

Should the situation not play out as expected, STEC could conceivably keep burning cash as its patents become less and less relevant by the day, ultimately resulting in bankruptcy. I do expect that if the turnaround effort doesn't look like it's going to succeed from organic growth, the company will throw shareholders a line and announce that it is looking into "strategic alternatives." This could very well include the outright sale of the company or a sale of critical patents and then the subsequent liquidation of the company and return of cash to shareholders.

Conclusion

The reason this story is so compelling is that the company could choose to shut everything down, return the cash to shareholders, sell its patents, buildings, and such and then shareholders at today's price would end up ahead. I believe that there's a lot of growth to be had in enterprise storage solutions, especially as in this space, the primary differentiators are in the software.

The risk/reward for STEC is nearly the best available in this market with ~$1-$2 of downside for $6-$7 of upside. It is very difficult to say no to such a rare opportunity, and as such plan to pick up shares immediately.

Disclosure: I am long INTC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I may initiate a long position in STEC over the next 72 hours.

Comments

[Robert Vasquez]

any thoughts on the dissident board of directors battle? Sounds like its unstable.

[Rhinoish]

Great article Ash. I'm looking to make a move into one of the enterprise ssd players, haven't decided who yet because I haven't had a chance to evaluate the actual products each company is selling (stupid day job). You laid out your case based on the fundamentals and the upside, curious what you know about the tech. Anything on anandtech, benchmarks out there somewhere, maybe something interesting at open compute summit last month?

[Ashraf Eassa]

Rhinoish,

My thoughts are that the company has talented technical staff, but hadn't focused them correctly until recently. They now have caching/virtualization software, PCIe drives that seem to be up to spec, SATA/SAS drives that are competitive, and in general a much stronger lineup than before.

Make no mistake: I like this stock because its valuation makes it a spec play that has good risk/reward :)

Glad you enjoyed the article :)

[Aricool]

while not a pure play, SNDK is the only SSD related play I've made very good $ on so far.

[scinvestor]

"the company could choose to shut everything down, return the cash to shareholders, sell its patents, buildings, and such and then shareholders at today's price would end up ahead"

Hard to fathom that the CEO would walk from $530k cash compensation, plus his (up to) 200% cash bonus, plus stock options, plus perks. (His brother doesn't do too badly either)

[StreetEconomist]

Keep up the outstanding work. I learn something every time I read one of your pieces.

[Russell Lane]

Management is everything, and I have zero confidence in these guys, sad to say. Not for my investment money.

[David/David]

Is their R&D expensed or capitalized? If the former, it's going to be a big hit to the bottom line short term. Of course, with this company right now, short term is all that matters. If it's capitalized, there's the question of where the money to hire the sales force and support the R&D effort is going to come from. Either way, I see lots of downside and not nearly as much upside as projected. Just because they are hiring a sales force doesn't mean they can generate sales immediately. It takes time to develop the relationships leading to sales, and 200 persons have many more established relationships than 8. Of course, if it's a commodity business, it's a different story--low cost producer wins. STEC doesn't sound like the low-cost producer. Am I missing something here?

[South Gent]

Ashraf: I may have missed it in your article, but it looks to me like some of STEC's cash is about to be used to fund a class action settlement, assuming it is finalized:

Page 8 10-Q for the Q/E 9/30/12

"As previously disclosed in the Company’s Form 10-Q filed on August 7, 2012, the Company had recorded as of June 30, 2012 an estimated settlement accrual of $35 million and an insurance claim receivable of $20 million, resulting in a net charge of $15 million recorded as a component of other expense. On October 18, 2012, the Company’s insurance carriers agreed to contribute $562,500 of the additional settlement cost of $750,000. As a result, the Company has recorded an additional settlement accrual of $750,000 and an additional insurance claim receivable of $562,500, resulting in a net charge of $187,500 recorded as a component of other expense for the quarterly period ended September 30, 2012. The Settlement Agreement remains subject to court approval and certain other conditions, including notice to class members and an opportunity for class members to object to or opt out of the settlement. At this time, there can be no assurance that the conditions to effect the settlement will be met, that the Settlement Agreement will receive the required court and other approvals or that the settlement will become final."

http://1.usa.gov/VeEI0b

I do not see any reference to the $65.8M in debt mentioned by ATX above in the 10-Q. I do not see any long term debt on the balance sheet (page 1). I do not see anything in subsequent filings to show the incurrence of any long term debt.

There is a large increase in the balance sheet item for current liabilities, consisting of "accrued and other liabilities" ($53.330M from $14.309M as of 12/31/11). That $53+M amount includes $35.75M in the "accrued settlement" and $3.118M in "accrued legal" (page 8).

It does look a proxy battle is shaping up between STEC and twp hedge funds: Balch Hill and Potomac.

I recall that Balch filed a 13D in connection with PLXT shortly before that firm announced an agreement to be acquired.
http://1.usa.gov/YpKn0Q

PLXT was one of Lottery Tickets which I sold after the merger announcement.

Item # 5 " Sold 70 PLXT at $6.66"
http://bit.ly/VeEI0e

Link to recent STEC 13 D filing by Balch Hill:

http://1.usa.gov/YpKn0S

I have no position in STEC. At most, I would buy it under my Lottery Ticket strategy:

Lottery Ticket Strategy:
http://bit.ly/TkDIoK

[David Alton Clark]

"The reason this story is so compelling is that the company could choose to shut everything down, return the cash to shareholders, sell its patents, buildings, and such and then shareholders at today's price would end up ahead."

Thats not how it goes Ash. Name one company in history that has done that. I would be interested to hear about it. They usually declare chapter 11 bankruptcy reorg and the shareholders get nada. Then they get bought out for pennies on the dollar by someone.

" I believe that there's a lot of growth to be had in enterprise storage solutions, especially as in this space, the primary differentiators are in the software."

The sector is comoditized and the competition is steep. STEC is losing market share while revenues are down, expenses up and profits non existent. Their only hope is a buy out. But most have already passed. DAC

[serndipity]

Nice article, well researched and documented.

STEC has terrific technology......not so good management, sales and marketing.

They have had their own proprietary controller and firmware for at least 4 years. Initially FPGA based, migrated to ASIC (a.k.a SoC) in 2011. They also pioneered best of breed adaptive DSP flash technology, vs. a solution utilizing increased ECC to leverage more endurance), as well as delivering EnhanceIO SSD Cache Software for Linux and Windows environments.

As formentioned, STEC has never been good at Sales and Marketing, instead relied solely on Enterprise OEM partners (e.g. IBM, HP, EMC, Cisco, Dell, NepApps, Fujitsu, Hitachi etc.).

However, in last reporting period, they said they now shipping to a large (10%) direct Enterprise account.

Last month, Balch Hill Capital, which holds 9 percent of STEC,urged STEC to consider strategic alternatives. Craig-Hallum Capital analyst Richard Shannon suggested that.Seagate Technology, Western Digital Corp, Samsung Electronic Co, Micron Technology, Toshiba Corp and SanDisk Corp could be the potential buyers

As you point out, when you back out the $186M cash from current market cap it's the the most compelling value available.

Very likely to happen.

[Ashraf Eassa]

Thank you, serendipity.

[Aricool]

"STEC has terrific technology"
how so? FIO claims they can get better performance than STEC with cheaper, retail grade FLASH. Also, FIO claims to have better pricing and long-term contracts on FLASH supply. That issue has hurt OCZ really bad lately. What about STEC?

[dougcp]

Sorry, but virtually every company who could buy STEC has passed on STEC. Seagate has passed three times. They are now with Virident and DenseBytes and I think their Pulsar SSD line was with Micron or someone. I don't remember. WDC bough Hitachi HDD which came with the HTC SSD group. The HTC SSD groups works with Intel. Samsung used to supply NAND to STEC (STEC has switched over quite a bit to Toshiba NAND). Samsung is also a competitor. SanDisk bought Pliant so they have no need for STEC.

The brothers laughed at Balch Hill because BH was such a joke. BH actually thought that some other shareholders were going to join them and pressure the brothers. Well, that didn't happen. So BH is left with 9% and no leverage (and apparently no guts to go forward). The brothers are not going to sell this company anytime soon. I can assure you.

[Matt Little]

I am always looking for good risk/reward situations like this one to consider. Thanks.

[winicks]

After close on Wednesday NetApp (NTAP) should provide insight on the state of information technology, and data storage, spending when it releases its fiscal Q3 earnings. I will listen to that conference call because they have recently tested STEC products. STEC went down a little after EMC earnings so if NTAP stock does well that may balance EMC info.

[winicks]

The entire story will change on 2-28-13 when they release #'s. They meet last time but gave a poor forcast which caused stock to be over sold but they may be able to beat which will push stock higher. Not sure why stories are written prior to earnings. Poor forcast then insiders buy lots of shares stock rises, then earnings are good but always the key is do they beat but if they do future.

[cyrano13]

STEC still has over 15% short interest for a reason. The moment play is long past and technology leadership once lost is seldom regained.

[Halukcan]

This company has been in business for more than 20 years, They have the technology, I dont think there is a big difference between FIO and STEC, what sets them apart is FIO does marketing much more better, its pure hype.

Mark mosyahedi mentioned that they had 8 sales people while FIO had 200, now they are increasing their sales people count, look at the vacancies page of STEC, theyre hiring bunch of sales and marketing guys, they know their weakness.

[ATX]

I did not read this article, but I can not agree with the title. STEC trading near cash value? absolutely not, btw, I have no interest in this company, I don't even know what they do, I'm just using simple math.

These are information provided by Macroaxis, although they are not completely current, they are a good estimation:

Market Cap: 239.24M
Cash: 186.2 M - Debt: 64.58M = Total Cash: 121.62
Current Valuation 53.04 M Divided by: Shares Outstanding 46.73 M
$1.14/share
Shares Outstanding 46.73 M
Number of Shares Shorted 7.96 M
7.98x100/46.73=17%

Short interest: 17%, that's pretty high, this means that many people thinks it's gonna crash, normally when a stock is really cheap at rock bottom price, the short interest is less than 5%, which means most people are scared to short that stock, for example ZNGA has a short interest of 2%, meaning nobody got the guts to short ZNGA at such low level, but there's 17% short interest on STEC meaning alot of people thinks it's gonna tank. I have no idea who STEC is, but according to my simple math calculation, you don't wanna put your money in on a stock that has such high amount of short interest.

[Halukcan]

Netflix had over 30% short before that massive squeeze which led to the stock running up 80% in a week lol

[Tony Pow]

Most likely it is a short squeeze. Recently I bought DECK with about 50% short and then it gains about 50% in about 2 months - from my memory.

[meridian6]

Too late for STEC. The problem is with the management. Their reputation in the industry is bad. They're in death mode with employee cuts. PCIe is a commodity now - everyone is making it. Why would a customer buy from a company they think will go out of business?

Margins are bad as OEMS cut prices - STEC can take it or leave it since they're so many suppliers out there. Bad position to be in.

I don't think they have any tech that would make them a buyout target.

[Tony Pow]

It is up by 3.5% this morning. Does this article influence the price?

I'm in.

The company is losing money, bottom rating from analysts, about 15% short... It does not look good, but it seems a good bet for turnaround.

The huge cash could allow the company to come back in n years (= Avail. Cash / Burn rate per year). It seems it has a good chance to come back.

What is the chance of being acquired by other company?

Thanks for the article.

---
I had the company's external hard disk a long while ago. I dropped and it never recovered and I hope the stock price will.

[pharmitnow]

Ashraf, interesting article!

Any management changes anticipated?

[Ashraf Eassa]

None that I can think of...although I wouldn't be surprised.

Glad you found the article interesting!

[Akram's Razor]

upside...not necessarily big....65mln ev is maybe half what someone like seagate would pay...but their position is real weak so tough call

[PSalerno]

I never saw a company shutting down the business and returning cash to shareholder. But I see the point, if the company will stop burning cash and return to profit, there is big upside.

[Aricool]

years ago I had a nano-cap (digital newspaper printing plates) stock self dissolve and return cash, stating the same reason the author says. It must be pretty rare though. likely needs high insider ownership for them to seriously consider it, and their technology would have to be darn near obsolete to not get any buyout above tangible book value.

[PSalerno]

Yes, exceptional conditions can make possible this exceptional outcome.