Serious business operations should be predictable to some degree. Giving investors more information helps with that predictability. This makes me wonder why solid-state storage specialist STEC
Last night's second-quarter report showed a strong rebound from the first quarter, when boffo customer EMC
The burning question on every investor's mind at this point should be, "What's up with EMC?" Unfortunately, CEO Manouch Moshayedi addressed the recent past of that relationship like this: "As anticipated, the inventory carryover situation at our largest customer was resolved during the second quarter."
And that's it. There was no mention of how EMC's ordering patterns are shaping up for the next quarter -- or for the long haul. You may infer a positive trend from revenue guidance some 29% above the results of this quarter, but even that is an unqualified leap of faith.
And the earnings call, where analysts like to hash out these kinds of thorny issues with management, was another disappointment. The prepared remarks were short and sweet and all about numbers. Then CFO Raymond Cook issued a chilling decree: "Please note that during the Q&A section of our call, we will not address customer-specific questions." Translation: Please don't ask us about EMC. Pretty please?
Cook and Moshayedi then stuck to their guns, and analysts didn't press their luck too hard. EMC's name did come up in passing once or twice when discussing general industry trends like automated data storage software. But STEC ended up discussing International Business Machines
So what is it that you're not telling us, STEC? I get this creepy sense of impending doom, though it could just as easily be some huge, game-changing deal coming down the pipeline. Either way, I really expect more transparency out of company leaders and would not be comfortable buying (or short-selling) STEC until these guys change their tune a bit. How can we invest in a business that doesn't want to be understood?
Short and sweet is all right. Sweeping major questions under the rug is not. That's my take, but what's yours? Share your thoughts in the comments below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.