Feeds

FalconStor brings in bankers after ELEVEN crummy quarters

Liable to be broken up for parts

Combat fraud and increase customer satisfaction

Struggling data protection and virtualisation SW vendor FalconStor recorded more losses for its third 2012 quarter and has appointed Wells Fargo to look at "strategic alternatives" for the company; code for a possible break-up or outright sale.

Third quarter 2012 revenues were up 4 per cent sequentially at $17.1m, a 9 per cent decline on the third quarter a year ago. The net loss was $3.6m, better than the second quarter's $6.6m loss and the year-ago quarter's $5.4m loss but still a loss. So far this year FalconStor has lost $12.6m on revenues of $53m. It has made losses for the past 11 quarters and, frankly, there is little sign they will not continue despite the best efforts of CEO Jim McNiel and his team (background here).

It cannot go on and, no doubt, this lies behind the appointment of the Wells Fargo bank,

to assist the Company in exploring and evaluating strategic alternatives to maximise stockholder value. The Company intends to disclose developments regarding the process only when or if the Board has approved a specific transaction.

The investors are ready to bail out if they get a good offer. While this strategic advising takes place life goes on, and McNiel said this in the quarterly results release:

FalconStor Revenue history to Q32012

Click on image for larger view.

While our revenues fell short of our expectations, we are pleased that we were able to achieve sequential revenue growth during a difficult macro environment. The uncertainty surrounding the global marketplace continues to cause disruptions in our business, specifically with budget freezes, elongated sales cycles, or, in some cases, lost deals due to competitive pricing and sales strategies. Finally, we believe that the steps we took during the third quarter to reduce our operating expenses in response to the current environment have left us well-positioned to execute on our plan to invest in our existing and our new product initiatives.

The company closed the quarter with $25.8m in cash, cash equivalents, and marketable securities. That's enough to keep it going.

FalconStor shares rose $0.47 from $2.01 on 7 November to $2.48 on the Wells Fargo and quarterly results news. They were $3.80 in April this year and $13.90 in 2008. It seems glory days are long gone for some storage players. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
BOFH: Oh DO tell us what you think. *CLICK*
$%%&amp Oh dear, we've been cut *CLICK* Well hello *CLICK* You're breaking up...
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Amazon reveals its Google-killing 'R3' server instances
A mega-memory instance that never forgets
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.