Trouble ahead at OCZ?

[Hellhammer]

How could a huge stock drop and terrible news not affect a sale? If nothing else, they could be sold for a lot less money, perhaps even pennies on the dollar.

Because if negotiations are already underway, there is most likely some idea of the sale price. Sure it depends on how far the negotiations are but it's not like the price is going to change dramatically.

Believe it or not but OCZ is a company that many want to acquire. They have their own controllers and firmwares, which is actually a quite unique situation since there aren't too many consumer-grade SSD controllers. On top of that they have plenty of visibility. Some of that may be negative but it's still visibility. OCZ also sells quite a few SSDs despite all the hate; look up the top sellers in NewEgg and Amazon for instance. Out of the 30 SSDs in NewEgg's top sellers list, 14 are OCZ. For Amazon the same number is 5.

Seagate is interested. Western Digital is interested. Even Micron is in the game. Seagate and WD share the same motives because they both lack a viable SSD lineup and if they want to succeed, they will need more than a SandForce based SSD. Developing their own controller is a possibility but that one needs to happen fast, they are already late. The reason why OCZ would be a good buy for them is because they would get right into the game. No waiting and possibly years of development as OCZ already has products in the market.

Furthermore, if we look at controller companies, quite a few of them have been acquired by bigger companies. Hynix acquired LAMD, Apple acquired Anobit, LSI acquired SandForce, SanDisk acquired Pliant... OCZ is one of the few companies with their own controller tech, yet they are "affordable" (the estimation for OCZ sale price was around $1 billion). That's why companies have interest in them.

Of course I don't know if it's going to happen but what I'm saying is that some of you aren't looking at all the facts. There is more than brand image involved.

 

[blastingcap]

Believe it or not but OCZ is a company that many want to acquire.

I don't believe it. I think any would-be acquirer would stay clear just for the legal problems, aside from the horrible economics. Better to let OCZ fail and then acquire the assets after it fails, like NV let 3DFX fail and then picked over the dead company for assets.

 

[thestrangebrew1]

This thread and the information linked are all interesting to read. My 1st ssd is still going strong, just a little ocz vertex 2 60gb ssd i've had for about 2 yrs now with no problems whatsoever. I never bought any of their other products however. One question I have about all this is why has it taken manufacturers like Seagate & WD so long to develop and manufacture their own ssds? I imagine ssds have been around for probably the last decade, with steady traction from at least the last 3 years going up. Did they feel that ssds were just a fad or was it more of a development/R&D/manufacturing process? If a "Small" Co. like OCZ could manufacture these, why not jump in the market as well?

 

[Yellowbeard]

My impression is that large companies like Seagate or WD want to deal in high volume commodity drives. NAND pricing is only recently reaching the level where that is feasible for anyone to do. And, they don't have NAND fabs nor do they have any IP in the controller area.......yet.

 

[Remobz]

I will not buy from OCZ in the near future. Just to be on the safe side.

 

[Puffnstuff]

Have you seen the price drops for their drives on the egg? Fireside sale prices on an email flyer I got from newegg.

 

[ViRGE]

Have you seen the price drops for their drives on the egg? Fireside sale prices on an email flyer I got from newegg.

The irony is that those price drops would appear to be part of the reason they're in trouble in the first place.

 

[bradley]

It now looks as though the "Indilinx Infused" ruse was to make a so-far bust venture seem viable to investors. The first true Indilinx controller (Barefoot 3) will delayed till next quarter... if OCZ is around by then.

A likely scenario would be that a specialized company such as would OCZ file for bankruptcy and their intellectual property and employees are acquired by either Seagate or Western Digital.

 

[VirtualLarry]

Can we get this thread a sticky? To prevent new users from falling into the OCZ "trap"?

 

[ViRGE]

Can we get this thread a sticky? To prevent new users from falling into the OCZ "trap"?

This is a financial thread full of speculation. So the short answer is going to be "no".

 

[Puffnstuff]

I just got a new sale add from compusa and once again ocz drives are low balling the competition.

 

[Meghan54]

From an OCZ 8-K filing today:

As part of the Company’s transformation, it has taken initial steps to make its business more efficient and profitable by initiating the EOL procedures to discontinue approximately 150 product variations, including reducing the value category by approximately 80 percent. This streamlines OCZ’s product offerings to address the mainstream and higher-end consumer products, as well as enterprise and OEM solutions. The Company has also evaluated its inventory and is in the process of making the necessary adjustments, including monetizing some inventory to better align its product offerings and to free-up cash for
the business. Excluding production personnel, the Company has reduced its global workforce by approximately 28 percent. Total personnel at the Taiwan production facility, including outside contractors, has been reduced by approximately 32 percent. This facility continues to increase
overall efficiency and production levels. The Company will continue to take further actions aimed at reducing overall costs and improving operating results.

Seems the death spiral quickens..........

 

[Zap]

TBH OCZ could really use a simplification of their lower end. I think there are a lot of fixed costs involved in SSDs such as the PCB, casing and to some extent the NAND. Then there are the controllers. I don't know what the BOM is on typical SSDs, but my thought is that there really isn't that huge of a spread between a cheap SSD and an expensive one.

What I'm getting at is that OCZ's product stack is super compressed at the lower end. Heck, count just their mainstream to performance models using the Sandforce 2281 controller. How many distinctly different model lines?

Solid 3
Agility 3
Vertex 3
Vertex 3 Max IOPS

At the lower end they have a stack of SATA II drives.

Vertex Plus
Onyx
Petrol
Octane

Okay, some of those are SATA 6G, but by interface only. Then there are the latest fake Indilinx drives.

Agility 4
Vertex 4

Then there are all the older models still in stock here and there. This isn't counting all the random 3.5" models or the niche 1.8", mSATA, caching and PCIe drives.

On Newegg they have more than twice as many drives listed as any other brand. Their pricing doesn't even always match performance and capacity. It is a total mess.

 

[bradley]

Can't wait to finally see their 10-q release, if they don't liquidate everything first.

 

[exar333]

Didn't OCZ buy PCP&C a while back? I wonder how this will affect their PSU business, which IMHO has been pretty decent over the years.

 

[Puffnstuff]

Yep they picked them up like 5 years ago.