I have a very minor ownership of Syquest, but am seriously considering rebuying at the .50 or under level. My reasoning is based on a couple of information items.
1) SyQuest recently hired a consulting firm with the specific purpose of advising them on the right tactics and direction for the longterm future.The recent layoffs, etc. mau be the first advised movesby this consulting company.
2) Syquest probably has no future independently, but could regenerate through a purchase by another. Best candidate, Iomega. Where possible Iomega can benefit by eliminating other players,and adding new product lines which they can sell through their established base, even though their share in removable storage is so huge.It is quicker and often less expensive to buy and existing company with established products, than begin the "new product category process internally.
3) A Vice-president of Syquest, as recent as this week, was meeting with Sr. Management at Iomega. Albeit this could for either merger talks, or his own future employment, or something unrelated.
4) The letting go of 50% of workforce is comparable to Iomega letting go 35% of their workforce and consolidating, albeit Iomega stock is in no great position, currently too.
5) If a merger opportunity were imminent, it would make sense to eliminate, in advance, any potetnially duplicate production and staffing in view of potential future buyer's facilities and staff.
As a stockholder in both, I am betting Iomega will acquire Syquest, probably at somewhere between $2. & $5. a share
Finally, Iomega has been restructuring their Sales Channels internally to operate in product category divisions instead of by customer-type and geographic divisions.
This would facilitate the melding of product sales for categories that Iomega is not currently involved, in a quick and rifle targeted manner, rather than having to train a great number of people across multiple divisions on new products.
Obviously, much of this is hypothetical, but a lot is based on fact and experience.
I'm buying Syquest & sitting on Iomega at this time. |
