This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: OCZ's Going Nowhere Fast

NEW YORK ( The Deal) -- If it were only about making computers rev faster, then OCZ Technology Group (OCZ) wouldn't be facing its current problems.

But as the publicly listed solid state drive manufacturer continues to promise, and fail, to produce financial returns, industry watchers wonder if a quiet sale or restructuring process might not be going on, especially in a sector that has seen recent consolidation.

The San Jose, Calif.-based company is considered a leader in consumer SSD products beloved especially of the gaming world--the company's name is a mash-up of overclocking, which means resetting a computer's clock to run faster so that all those beautiful game images that take up so much memory render more quickly. And its 2011 $32.3 million stock and cash acquisition of South Korea-headquartered Indilinx, which manufactures the controller component of the SSD, gave OCZ an ability to control the quality and durability of its products, according to Jim Handy, a director with semiconductor market research firm Objective Analysis.

"People spend gobs of money to make their computers run faster," he says. "So that's what OCZ caters to."

But so do scores of other small companies, Handy explains. "Most of them try to differentiate on cost. Anything that OCZ produced that went head-to-head against cost-concerned companies, they would lose money."

And lose money the company does, turning in net losses every quarter, except one, since it went public on the Nasdaq in 2010. (The company had previously listed on the London Stock Exchange Alternative Investment Market in 2002.)

For a while, the company's financial health seemed to be improving. Under the leadership of its founder and CEO, Ryan Petersen, OCZ had managed to finally cut its year-over-year losses in 2012, down 41% to a loss of $17.7 million in its fiscal year ending in February, on revenue that had shot up 92% from $190.1 million to $365.8 million.

Fiscal 2013's first quarter revenue was reported at $113.6 million, up from $73.8 million year-over-year. And the company said it expected the second quarter to come in between $130 million and $140 million.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
OCZ $0.00 0.00%
PLXT $6.50 0.31%
CY $6.60 0.00%
EXAR $5.21 0.00%
IDTI $17.33 0.00%


Chart of I:DJI
DOW 16,014.38 -12.67 -0.08%
S&P 500 1,852.21 -1.23 -0.07%
NASDAQ 4,268.7630 -14.99 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs