Adaptec's November 10th AGM runup has been bespoiled by dreadful quarterly results and the company is facing the likely ejection of its CEO from the board. The results for its second 2010 quarter showed a 42 per cent revenue decline year-on-year and a $3.8m loss, compared to a $3.3m profit a year ago. To increase Adaptec …
Who are Adaptec?
Oh yes, people who used to do SCSI cards when that was popular in the 1990s.
Do they have any products? if so they're certainly not in the news. Nothing to interest the consumer.
It never ceased to irritate me..
That investment companies want to see money now, now, now! They put a quid in and want 5 out of you by tomorrow.
They don't seem to give a rat's behind about whether that quid now will sustainably give them 4 back every year ad infinitum, they just want the 5 now!
Ah, the return of the raiding investor
You know, I'd given steel the benefit of the doubt, but gloating juvenilely at every little setback when apparently the board does its best to turn the tide, regardless of whether that is effective, loses them, and not adaptec, enough face as to find them uncompelling. Apparently they just want to gut a company that's been at it for a while and with a lot of tech know-how that isn't going out of business soon even if they're not "leading the field" just right now. I don't think that's best long term for creating wealth for everyone, employee, customer, or shareholder alike.
Nothing but a finance crisis to bring out the most despicable in money obsessed financal raiders.
A rock and a hard place?
These days Adaptec makes multi-SATA RAID controllers for small servers and large workstations.
Their problem may well be that Intel started putting 6 x SATA ports on all their southbridges and motherboards, and CPUs got so fast that software RAID ceased to be a significant system overhead, and disks got huge. Instead of buying a separate controller, just connect a few SATA drives to your motherboard. If using Linux, use Linux software RAID. On Windows, use Intel's (fake)RAID driver.
Which leaves an ever-shrinking gap between >6 disks, and entry-level NAS, for Adaptec, 3Ware and others to fight over.
The raiding investor ????
To the AC who complains about raiding investors - normally I'd agree with you but Steel Partners can hardly be called raiders in this case. Steel first invested in Adaptec in around the time Sundi became CEO, several years ago.
At that time, Adaptec might have been a basket case but it was posting revenues in the region of $120M per quarter.
When Steel invested in Adaptec many insiders hoped that it was the start of a turn around. Instead, Steel had an extended fight to get representation on the Adaptec board and Adaptec senior management has always done the opposite of what Steel wanted. This has continued right up to the current crisis as evidenced by the Adaptec proposals to effectively remove the board positions occupied by Steel.
During the time that Steel have been major investors in Adaptec they have watched Sundi take the quarterly revenue from that $120M (which was considered disappointing at the time) all the way down to $18M. The head count has gone from about 2000 to 350. It doesn't take much knowledge of downsizing to know that the senior management and bean counters are safe and that the axe falls on those who actually do and produce things. I.e. Adaptec don't have any major R&D capabilities any more.
I don't know anyone who has come across Sundi who doesn't think at best that he's out of his depth. Most just consider him to be an expensive idiot. It does take a special genius to under perform the sector by 100%.
When the news came out that Steel had the requisite proxy votes the news was greeted with cheers by the vast majority of former Adaptec insiders.
Over several years Steel have invested a considerable amount of money and seen the value of the inevestment p****d against the wall by Sundi, Mark Lowe et al. If my pension included shares locked in such a poor performing company I'd become an activist investor, too.
Sadly, the time to realise value from Adaptec was some 5 years ago. What might be realised now may be enough for the likes of Steel to break even, but I'd doubt it. Sundi's reign at Adaptec has been like Gordon Brown's reign here - an incompetent disaster.
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