Executives Are Selling at STEC. Should You?

• Report this Comment On August 05, 2009, at 4:55 PM, mightymo2 wrote:

  NO, bluntly speaking. STEC is a strong buy.Of course, this is after the 7.5 shares selling have run it course.

  Please note that the brothers have been selling their STEC stock for several years now. They sold at 4 per share, 7 per share, 10 per share, etc etc, Get the picture..has nothing to do with the Company.

  Here's the deal.........

  It has been stated that it would be easier to purchase the company with less insider ownership.

  There was a speculative rumor about Intel buying out STEC instead of developing it's own. However, a more plausable case can be made for Seagate. Seagate filed a suit againt STEC in regard to the SSD product last year. It was widely viewed as a delaying tactic move. That ligitation has now been dismissed.

  Per Richard Shannon at Northland Secuirites "That makes Seagate’s suit look like a desperation move. “Seagate makes 80% of its money on the 5% of its sales that go to the enterprise market. That Seagate business is going to disappear.” Another analyst, Richard Kugele at Needham & Co and Shannon both think Seagate could just buy STEC. Both analysts expect someone to do so. STEC was founded by three brothers who own a controlling share of the stock. They’ve already had four offers (per these analysts).

  I think the selling of the 7.5 mil shares pertain to some type of an arragement made (for wahtever reasons I do not know) prior to a friendly buyout.

  After the offering sale, the brothers will have only 20% ownership of STEC

• Report this Comment On August 05, 2009, at 5:26 PM, bizassistsa wrote:

  "But perhaps the backdraft should have been a little bit stronger. STEC is trading near all-time record levels, while direct competitors like SMART Modular and SanDisk (Nasdaq: SNDK) are nowhere near back to full health after the recent Flash memory price wars."

  I believe that you missed the boat on this statement. SMART and SNDK are not direct competitors, as they are in the "retail" segment, whereas STEC is the only game in town for the SSD enterprise segment. This near monopoly, coupled with the fact that the enterprise SSD segment is on fire, means that STEC is indeed an investment that should be very closely looked at and considered. Strong income statement+ stronger balance sheet+ near monopoly+ growing market = a buy or strong buy in my book. Just my opinion.

• Report this Comment On August 06, 2009, at 5:19 PM, dcesano wrote:

  I may agree with the two opinions above. However, we shouldn't forget that:

  1. We are just getting out of a recession where people reacted quiet irrationaly and we could have some residues of this behaviour somewhere in the system.

  2. Nasdaq today went down because of kind of bad news on the unemployment side.

  3. Senior executives sold a big portuion of their shares that may push a few people think it s time to sell

  4. I am buying from Europe and the $ is dropping so even though the share is rising, I have been loosing share values for over a month

  2 + 3 + 4 + 1 may maean a sell for a few people. I predict a stagnant price or even a small contraction over the short term. Depending on your time horizon you may be thinking of relocating a portion of your STEC asset partially somewhere else...

• Report this Comment On September 11, 2009, at 10:35 AM, rick24245 wrote:

  I THINK YOU MISS THE BOAT $42.00 I BET YOU IT WILL GO OVER $70!YOU WANT TOO BET

• Report this Comment On February 22, 2010, at 12:31 PM, wobatus wrote:

  Looks suspicious in retrospect, eh? Almost like they knew the channel at emc was stuffed. And I say this as a person interested in buying some now, but with earnings a day away I'd love to see some more color on the inventory overhang and any movement re: IBM. Best of luck to longs.

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