Feeds

Bolshy Balch Hill blasts STEC bosses after talks break down

Increase in ops spend = NO profits - activist investor

HP ProLiant Gen8: Integrated lifecycle automation

Activist investor Balch Hill has told STEC's shareholders that they should consider putting up a For Sale sign on the fallen flash leader's lawn and booting out the CEO and former CEO, the Moshayedi brothers.

Balch Hill, which holds 9 per cent of shares, and its partner Potomac Capital have issued a letter to STEC shareholders and the world at large over their "concerns" that the company had lost a huge amount of shareholder value.

Choice bits from the letter include the activist investors' contentions that:

  • "The current Board and executive management team have presided over a massive loss of revenue and market share in the Company's core OEM enterprise SSD market, even as that market grows strongly ... "
  • "Manouch Moshayedi's [Former CEO and founder who resigned last year after the SEC filed insider trading charges against him] continued presence at the Company is detrimental to STEC and [current CEO] Mark Moshayedi is too closely aligned with his brother to rebuild the trust that has been lost"
  • The investors also contend that both Mark and founder Manouch Moshayedi should resign from the company's board of directors.
  • A new board, including Potomac's Eric Singer, should "explore all strategic alternatives, including a possible sale of the Company if the Company cannot remain a stand-alone entity."

Amazingly, Balch Hill claims that in previous discussions with STEC's board:

We were close to a settlement that would result in the immediate resignation of Manouch Moshayedi from all positions with the Company ... We also had a verbal agreement with the Company that Mark Moshayedi would step down as a director at the Annual Meeting and as CEO following a search for a new CEO to be headed by a special committee of the Board composed of four (4) independent directors, including Eric Singer. Unfortunately, the Company was unwilling to reflect their verbal agreement in writing and we were forced to pursue a proxy contest.

STEC had this to say about the break down in talks: "We are disappointed that the dissidents have decided to pursue this wasteful course of action. The Board and management team remain fully committed to creating value for all shareholders, and that remains our focus."

Current CEO Mark Moshayedi said at the recent earnings call that STEC would "continue to reach out to the activist investors and as a result, this proxy contest, and we’re hoping that we could get to a mutually agreeable resolution." ®

Reducing security risks from open source software

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.