RE: SyQuest Financial Situation
I believe that they'll need to find considerably more than the $24.5 million in fairly short order. According to my calculations, the $24.5 million puts their equity at about $20 million, and I would be surprised to see them losing less than $20 to $30 million per quarter for the next couple quarters.
[Calculation: $9.7M equity as of last quarter, minus $33.7M loss this quarter, plus $14M, $5M, and $24.5M in new investments and debt conversions = $19.5M.]
With increased competition with Iomega (by way of Jaz price reductions), they'll be hurting even worse. Unfortunately, I think that SyQuest's only hope is to be acquired, and I think it'll have to happen very soon.
Also, I don't think that the Rocket will help. It's already factored into the stock price, and I think it'll have a very limited audience. Most people just don't need that kind of capacity and speed, nor can they afford it. It's a good niche market, but not a big one.
[I'm long on IOM and have no position in SYQT.]
- Michael Coley
- i1.net |
