Rumor: Seagate May Acquire OCZ; Stocks Soar
According to the Fudzilla report, "industry sources" claim that Seagate is one of many looking into a possible acquisition of OCZ. The HDD company reportedly plans to offer much more than the $308.5 million that Nasdaq currently values OCZ, which seems like mere chump change compared to Seagate's Nasdaq value of $11.71 billion.
If true, the rumored move would certainly accelerate Seagate's progression into the SSD market which has thus far been slow at best and rather late to the game. OCZ, which considers itself as the SSD expert, is somewhat years ahead of where Seagate needs to be. It realized the market shift years ago and quickly transformed itself from a core RAM company to one of today's premier SSD manufacturers.
For Seagate, this acquisition would make sense, even more so as the industry shifts away from platter-based storage solutions. Experts claim the OCZ acquisition will boost Seagate's margins and help it establish a firmer foothold in the lucrative enterprise segment. Meanwhile, OCZ would benefit from Seagate's massive capital that would enable the SSD company to meet consumer demand, a problem OCZ has reportedly encountered in the past.
It's also believed that Seagate will likely keep the OCZ brand if the SSD company is brought in-house. Yet there's a possibility that OCZ could continue on as a separate company -- yet still owned by Seagate -- in order to prevent disrupting its current momentum on the SSD market.
"It is plausible for Seagate or Micron to buy an SSD company," Benchmark Capital analyst Gary Mobley said. "Seagate has been late to address the flash storage market and needs to hedge its aging HDD business. Micron would benefit from owning OCZ by selling more NAND flash."
The Fudzilla report claimed that Micron is one of the companies considering an OCZ acquisition.
According to Reuters, shares of OCZ, which was valued at $308 million as of Wednesday's close, were trading up 22-percent at $5.57 on the Nasdaq. Thursday's gains added about $68 million to its market capitalization.
My guess would be that they would continue to run as a subsidiary of Seagate.
I really don't want to see the SSD market turn into another Seagate vs. Western Digital.
My guess would be that they would continue to run as a subsidiary of Seagate.
Use of Segate's distribution channels, manufacturing expansion and resulting increased sales may lead to lower prices.
I wish them luck.
I really don't want to see the SSD market turn into another Seagate vs. Western Digital.
PS: might wanna look into buying stocks of other SSD manufacturers, like Kingston, Sandisk, Crucial...etc.
http://www.hgst.com/solid-state-drives/
With a little engineering work they should be able to change the interface from a SAS interface to a SATA interface and have a pretty good desktop/laptop SSD in their lineup.
OCZ is better off running as a separate company then merging with seagate, as saagate will just slow down progress and innovation.
It's likely the stock will dive if the rumor turns out to be false....
True, but OCZ is an interesting and innovative company, I would love to see what would come if they had some real money to play with on research. This is not a consolidation as Seagate does not have an SSD branch yet, but I am with you... the last thing I would want to see is Seagate vs Corsair/Intel/Crucial... that would be as bad as things are now in the HDD market where everyone has recovered, and yet they are all pacing with eachother on price so that they all make a killing.
Keep in mind though that Seagate has been the first to lower prices after the floods, so they are not entirely evil.
Sammy's quality was going to go down regardless as they were hit bad by the flood. While they were down Seagate bought them up, it was just good business. Sammy's quality has sense returned to almost what it use to be, while their warranty will go back up after they are sure all the kinks are out of their manufacturing process. Keep in mind that for a little while there ALL major HDD manufacturers when down to 1 year warranty on consumer drives, and where 3-5 years use to be normal, we are now only seeing 2-3 year warranties.
I agree completely with the sentiment of having more funds for R&D, I would love to see the result of it.
Anyway, what I'm replying to is the reduction of price after the floods. Seagate/WD would have had to do that at some point regardless; they would face a price fixing class-action lawsuit if they didn't.