Opinion

posted on 30 May 2008 00:20

SmallCapInvestor.com has an article discussing STEC's fortunes and has interesting points and observations, culminating in a suggestion that Seagate should simply buy STEC, as has been suggested elsewhere.

Points made in the piece:-

- The EMC restriction on STEC not selling its Zeus IOPS SSDs (solid state drives) runs out at the end of September. At that point it can sell its SSDs to EMC competitors.

- IBM and HDS have SSD plans for their high-end arrays.

- Seagate's lawsuit against STEC is thought to have a low chance of success. It's not clear though that the article author understands Seagate itself is going to get into the SSD business.

- Seagate could just buy STEC to cope with the looming cannibalisation of high-end drive sales (and a high proportion of Seagate profits) by SSD incursion.

- Some analysts expect a hard disk drive maker to try and buy STEC soon. The company was founded by three brothers who own a controlling interest. They have already, apparently, had four offers to buy their company.

- A buy price of $30/share is suggested.

- The key STEC technology is thought to be in its controllers and include wear-leveling algorithms.

^{[Chris Mellor.]}