Wal-Mart Stores, Inc. (WMT): Okay, This Stock Fell, but Why Did My Stock Just Die?

The not-so-great and wonderful OCZ
There was no company-specific news that caused solid-state-drive maker OCZ Technology Group Inc. (NASDAQ:OCZ) to fall almost 8% Wednesday. But an article that appeared on Seeking Alpha questioning whether the company had six months or less to live before it filed for bankruptcy seemed to coincide with its fall.

OCZ Technology Group Inc. (NASDAQ:OCZ) began spinning out of control last year after problems surrounding certain customer incentive programs arose that led to significant quarterly losses and the abrupt resignation of its CEO. It has yet to file its financial reports for several periods and that has put its Nasdaq listing in question, though it has received extensions from the exchange. Notably though it was supposed to file them by April 8 and that deadline came and went after which OCZ said it expects to get that delisting notice, though it will appeal it and ultimately regain compliance.

Fortunately, OCZ previously secured a $30 million loan and security agreement with Hercules Technology Growth Capital, which not only shored up its dwindling financial base for the time being but likely puts to bed the question of whether it will actually have to file for bankruptcy. Payments aren’t due till November and by then it should have picked up and dusted itself off.

One of the hopes has always been that Seagate Technology PLC (NASDAQ:STX) would step in to buy OCZ out. That remains a possibility, particularly in its weakened state, but I wouldn’t expect anything until it straightens out its financial mess. With its SEC filings still a big question mark, it would be a big, risky move to make. Yet, if Seagate Technology PLC (NASDAQ:STX) were interested, it would want to move before a bankruptcy, since there might be many more buyers interested in picking over the carcass of OCZ then.

The most likely outcome is that investors will have to patiently wait while the drive maker limps along on its own for some time to come.

The article Okay, Wal-Mart’s Stock Fell, but Why Did My Stock Just Die? originally appeared on Fool.com.

Motley Fool contributor Rich Duprey owns shares of Seagate Technology. The Motley Fool has no position in any of the stocks mentioned.

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