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Longbow Reiterates Neutral on OCZ Technology as Dilutive Deal is Likely

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In a report published Wednesday, Longbow Research analyst Joe Wittine reiterated a Neutral rating on OCZ Technology Group (NASDAQ: OCZ).

In the report, Longbow Research noted, “We continue to rate the shares of OCZ NEUTRAL. Despite some green shoots in enterprise SSDs, in its current state OCZ is a going concern with enough cash and credit to last two quarters, and NAND supply bottlenecks are preventing OCZ from reaching profitability on its own. Therefore the focus shifts to the strategic alternatives OCZ has been evaluating since August, which include (1) an outright sale of the company, (2) a divestiture/closure of the dragging client SSD business that could loosen the NAND bottleneck, or (3) a more significant capital infusion. We believe a deal is likely in the next 90 days, since there is value in OCZ's enterprise SSD business and potentially in OCZ's controller IP. However, with any deal we expect existing shareholders to be diluted substantially given the risk in the story, leading to our continued NEUTRAL rating.”

OCZ Technology Group closed on Tuesday at $1.31.

Latest Ratings for OCZ

DateFirmActionFromTo
Mar 2013Longbow ResearchInitiates Coverage onNeutral
Oct 2012FBN SecuritiesTerminates
Sep 2012Stifel NicolausDowngradesBuyHold

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