Re: New direction
I found the following to be the most interesting part of today's earnings press release:
>>>''We have made a management decision to focus resources on the opportunities created by SparQ, with a strategic transition to this product as the backbone of our corporate future,'' Harper said.<<<
This is a clear change of corporate direction from their primary focus on the high-performance end of the removable market ever since the EZ135 disaster.
I think they've made a wise move.
While the SyJet and Quest appear to be excellent products, it was hard to imagine that they could ever generate the level of sales needed to keep the company from staying a small niche player.
The SparQ, with its very attractive cost per MB feature, has the potential to grab a much larger portion of the growing removable market. For those who are not concerned with compatibility, the SparQ makes a lot of sense and has the potential to turn around the company.
SyQuest still has a tough road ahead. They need to move fast to get a jump on Castlewood's Orb and any other potential competition. This will be difficult with their immediate ramp-up needs, component shortages and limited resources. Castlewood is probably facing the same obstacles however.
While I continue to remain bearish on the stock, and was surprised at how terrible the earnings report was, I don't believe SyQuest is dead and buried quite yet.
Regards - Dale
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