This page has been archived and commenting is disabled.

Copperfield Research Discloses Another Potential Stock Scam, This Time Fully Domestic: OCZ Technology Group

Tyler Durden's picture




 

And now for a little variety from the now daily Chinese fraud exposes. Copperfield Research, in taking a break from the spate of unmasking of locally listed reverse merger frauds which how now locked up the Nasdaq halt list, has decided to focus on some potential home grown fraud, exposing what it believes is some local fraud in the form of Nasdaq-listed OCZ Technology Group. From the just released report: "OCZ has parlayed investor and market excitement for solid state drives (SSDs) into an amazing story. From a low of $1.79 last summer, OCZ's stock has steadily climbed more than 350% on a feel good tale told by its CEO. But there is a much darker and sinister side that has been well hidden. It is our opinion that OCZ has misrepresented its SSD growth and has financial irregularities that are nearly impossible to reconcile. We believe that some form of a restatement may be required and that the auditors tick and tie review has some substantial inconsistencies. As such, we have sent our findings to the Securities and Exchange Commission asking for clarification on the multiple sets of numbers that we have uncovered. We believe OCZ's Board has the fiduciary responsibility to form a special committee to examine these discrepancies." The bottom line for those curious where this short-seller sees the stock: "If OCZ trades in-line with the comp group, a generous assumption given OCZ's limited asset value, differentiation, and minimal profitability, a reasonable price target would be between $2.58 and $4.98 per share."

Full Copperfield Research report:

OCZ - The Master of SSD (Shady, Suspect, Deceitful)

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 04/20/2011 - 11:56 | 1188445 Temporalist
Temporalist's picture

Well I hope OCZ is doing alright as I use and trust their products.  Their lines of memory and such have really displaced a lot of industry leaders in a short amount of time.  Not sure about their SSDs yet though as that market is still young.

Sucks if they are committing fraud.  It is always important to have a good CEO; one that doesn't commit fraud is pretty important too.

Wed, 04/20/2011 - 12:08 | 1188486 TheGreatPonzi
TheGreatPonzi's picture

OCZ is a good company, which makes fine products: but every publicly-traded company is once tempted by accounting fraud. 

The hot story of SSDs was too hot. Not saying they're not the future of data storage (they are), just that the stock gains went too far away from the sales. 

Classic bubble on the dot-com model. 

Wed, 04/20/2011 - 12:10 | 1188509 zaphod
zaphod's picture

These are the same asshats that wrote that hit piece on EBIX a few weeks ago. I don't know anything about OCZ, but I do about EBIX, and the stuff they wrote on EBIX was pure nonsense. It was nothing but emotional drivel mixed with 50% facts to paint the most unbalanced/crazy aruguments I've ever seen. 

These Copperfield monkeys are simple short scamers trying to make a few bucks by hitting smaller cap firms.

ZH I've just lost a lot of respect for you for posting their crap.

Wed, 04/20/2011 - 12:25 | 1188558 DFCtomm
DFCtomm's picture

Have you seen those PCI-express SSDs? If they ever get the bugs worked out they will be amazing. Nearly 1GB/s transfer speeds. I'm dying to get one, once they're stable. It's a shame to hear their accounting is so iffy, since their products are exciting.

Wed, 04/20/2011 - 14:41 | 1189194 PuppetRepubl1c
PuppetRepubl1c's picture

OCZ recently brought their Vertex 3 SSD to market, it is the clear market leader and will bring in a lot of money for them.  The 120gb drive which uses sata 6g goes for $300 right now.  (faster and cheaper than the intel alternative)  Every PC enthusiast is going to buy one in the coming year as they upgrade their pcs (to sandybridge), in fact i already have 1 as does several of my friends.

 

I don't know if they fudged their numbers or not, it is certainly possible, but from someone who knows the SSD market and their RAM products i can tell you they are a legitimate leader in the market.  Hopefully their ethical issues don't lead to their products being hurt because currently they are pretty good.

 

 

 

 

Thu, 04/21/2011 - 01:03 | 1191311 Hephasteus
Hephasteus's picture

Let me show you where OCZ learned to forecast from.

http://www.techfocusmedia.net/archives/articles/20110309-itanium/?printV...

Now those SSD drives. They are in that same forecasting blender. Huge projection, little actual.

You want to know how I know OCZ is full of shit. Because the memory industry is doing what it always does. Its' trying to come out with a DDR4 standard which nobody wants nobody needs and it brings precisely nothing to the plate other than forcing people to buy something that nobody wants nobody needs and if it's adopted nobody will upgrade.

There's no leader in the ram market. There's no good bad and ugly. It's the easiest process to do. Every process shrink they make ram chip after ram chip after ram chip till they work out kinks then finally go on to bigger harder things.

SSD is nothing new. In 1984 people sold floppy drive boards that allowed you load dos onto the ram chips and boot quickly. In 1988 people sold small hard drive boards that allowed you to set up ram disks on non volatile and throw database indexes on it etc etc. It's the same thing over and over. SSD is not without it's uses. They just can't even package the damn stuff correctly.

http://www.fusionio.com/products/

Ram doesn't follow cpu's and gpu's. It requires 3 shrinks to get a significant jump in performance. It goes up in speed at 5 percent versus the cpu's 15 percent rate. The fastest ddr3 on the market can barely beat an old worn out set of ddr 400 sticks. It's got a bit less latency and a huge jump in theoretical throughput but for real transfers it's only about 10 to 15 percent better because it represents the difference between 90nm ram and 50 35 30 nm ram.

And OCZ is simply playing the same fraud game that intel is playing. And you can bet your ass apple is in the same boat. And thinking it's going to blow up the little guys and leave the biggest fraudsters is rediculous. Because people are not going to upgrade to sandy bridge, ivy bridge, bridge over troubled water. They are going to fix into the past and stay there till the shephards get tired.

Thu, 04/21/2011 - 15:17 | 1193495 PuppetRepubl1c
PuppetRepubl1c's picture

I don't necessarily disagree with everything you are saying but SSDs are a real and massive performance increase over platter based hard drives.  I would encourage you to browse any of the thousands of enthusiast based computer hardware sites on the net and find even 1 that disputes this performance gain.  In fact i challenge you put a new SSD in your notebook and not be impressed with how fast things load and how snappy the operating system is.  Personally after using an SSD as my operating drive i would never even consider using a standard hard drive for anything other than mass storage. 

 

Now their predictions may be overly optomistic in terms of sales (in fact this is quite possible), but every notebook sold in 3 years time (when the SSD prices fall) will have an SSD instead of a platter based hard drive.  

Wed, 04/20/2011 - 12:02 | 1188472 firstdivision
firstdivision's picture

Is anyone else getting gaps/incomplete lines in the d/l report or is that just me? 

 

Wed, 04/20/2011 - 12:29 | 1188583 Zero Govt
Zero Govt's picture

CR Discloses Another Potential Stock Scam, This Time Fully Domestic:

General Motors?

Wed, 04/20/2011 - 12:35 | 1188619 zver
zver's picture

How is this even legal?

These clowns have no clue what they're talking about but it doesn't matter because by the time that this article is disproved they will have already covered their short position. Thats a very nice strategy Copperfield Research has..

1) go short

2) write an article filled with half-truths to create panic 

3) profit

 

i hope in some ironic turn of events the SEC turns around and investigates Copperfield Research instead... that would be hilarious

Wed, 04/20/2011 - 13:01 | 1188782 Tyler Durden
Tyler Durden's picture

Well, alternatively, to those who are certain the report is bogus, this presents an amazing buying opportunity no? Ultimately, since the report is wrong the stock will normalize in a manner of days.

Wed, 04/20/2011 - 13:38 | 1188963 zver
zver's picture

i agree with you 100%. I think its great that you posted the article because the zerohedge community (which generally has a lot of smart investors) has shed more light on this article.

Wed, 04/20/2011 - 12:39 | 1188643 redpill
redpill's picture

Well this made the rounds quick, they are off 27%.  Expect it fall farther if the company doesn't come out with a strong statement fast.

Wed, 04/20/2011 - 12:44 | 1188678 NidStyles
NidStyles's picture

Absolute nonsense. I will tell Tony about this. I grew up with the guy.

Wed, 04/20/2011 - 12:55 | 1188738 redpill
redpill's picture

I think he probably knows by now.

Wed, 04/20/2011 - 13:20 | 1188873 cornedmutton
cornedmutton's picture

Tony who?

Wed, 04/20/2011 - 13:01 | 1188773 Forgiven
Forgiven's picture

Copperfield should look into Sulphco (SUF).  Why they are still listed blows my mind.

Wed, 04/20/2011 - 13:04 | 1188805 Godisanhftbot
Godisanhftbot's picture

 I predict there will be more fraud in the shortandbash space than the fraudspace.

 

too easy. in fact, you can probably hire a Bangladeshi to write one of these for $5

Wed, 04/20/2011 - 13:19 | 1188862 cornedmutton
cornedmutton's picture

I'm not surprised in the least at these serious accusations.

I used to write product reviews for OCZ samples sent to me while I worked for one of the world's largest, most well-known, and respected hardware review sites (no need to mention names as this time) and I can assure you that bait-and-switch was modus operandi for these guys. It was no uncommon for me to review one product, and then find it in retail a few weeks later using completely different memory ICs than were included on my sample.  They have no product version control and are absolutely unapologetic when it comes to their standard practice.

May they all go down in flames.

Wed, 04/20/2011 - 14:36 | 1189258 PuppetRepubl1c
PuppetRepubl1c's picture

if you are talking about the 32nm ram vs 25 nm ram issue that was uncovered i agree they screwed up doing that.  They advertised speeds based on the 32nm ram but shipped some customers drives based on the newer and slower 25nm ram.  After getting some much deserved bad press for this they started swapping out drives for free to those who know/care about this issue.  

I agree it was a very foolish thing for them to do but they seem to have their act together regarding that specific issue.  They source ram from intel as well as other relaible manufacturers, they should have just been upfront about the performance impact between the 32nm/25nm ram.

With all of that said, i still don't see anyone competing with their Vertex 3 SSD in terms of speed and price.  While i personally think the intel SSDs are great they are overpriced for the performance they are offering.  Unless another manufacturer comes to market asap OCZ is going to completely dominate the 120gb SSD marketplace for the next year or more.

 

Thu, 04/21/2011 - 01:34 | 1191354 Hephasteus
Hephasteus's picture

"They source ram from intel as well as other relaible manufacturers, they should have just been upfront about the performance impact between the 32nm/25nm ram."

Intel is a reliable supplier. Uh the p55 is a pci-e 2.0 board. Then years later people find out it can only do pci-e 1.0.

Intel "Asia is a huge market and we are doing very strongly there."

Meet intels asia pacific distribution channel. Esys.

http://teledataesys.wordpress.com/

Intel is probably about 10 times higher on the fraud scale than OCZ. Since OCZ is probably only taking a very small part in the fraud. Government's actually giving you land and buildings and shit to set up fraud shop. You don't think this is going to generate a huge pissed off field? All that crap about cheap laptops for india students and it's a facade for a couple billion in intel chip sales fakes a year.

Intel is going to pull a total Lenny Dykstra sooner or later.

http://www.youtube.com/watch?v=k8-TU3vxrYM

Wed, 04/20/2011 - 13:39 | 1188959 WilliamShatner
WilliamShatner's picture

I had a big LOL session when I saw this article.

Believe it or not, I interviewed for a job at this company about a year ago.

Got a weird vibe from the people I talked to, they were not very good about answering my questions about the company in a straightforward manner.  I also remember saying things like "you should never embellish or overstate the capabilities and performance of your product, you need to be very honest with your customers or they'll never buy from you again".

I guess that's why I never got a callback from them.

 

Wed, 04/20/2011 - 14:29 | 1189225 jmc8888
jmc8888's picture

Wow they used to make good ram, had some in my old computer.  Sad to see they might be scammers, but not surprised in this bizarro world.

Lots of bad reviews of the quality of their ram led me down another path for my i7 ram.  But then again the whole ram market was scam-ish a year ago. Huge downturn, yet 50 percent more for the same products they sold in late 2008.  Only now have they come back down.

 

Wed, 04/20/2011 - 14:46 | 1189319 SwingForce
SwingForce's picture

Hey, watch out here because OCZ's products KICK ASS. 

Wed, 04/20/2011 - 15:04 | 1189399 rumblefish
rumblefish's picture

Would this be why I never recieved my rebate for the OCZ SSD drive I bought in January?

Wed, 04/20/2011 - 15:30 | 1189530 DrFever
DrFever's picture

Can you please not post this kind of stuff TD. It really takes away from your credibility when you post a report that was obviously prepared to benefit their (probably massive) short position.  Here's how the scam works.  You build a massive short.  You come out with a very long report that on the surface looks to have a lot of meat attached to it....stock dives, you cover, nothing happens and the stock's damage is usually over with in a week or two.

This stuff bothers me.  "alleged" is one thing....calling them outright fraudulent as Copperfield does is another and is obviously out to suit their own agenda.  Maybe the SEC should look into Copperfield.

Wed, 04/20/2011 - 15:51 | 1189630 MonsterZero
MonsterZero's picture

Boo to you, let him post, tons of people read his shit without really understanding.  This isn't the first fraudulent hit piece reposted here on ZH and I hope to god it's not the last.  The only thing safer and more profitable than shorting and posting a hit piece is buying into it after it's run its course.  We all know this whole market complex is a big scam, play the game already.

Thu, 04/21/2011 - 00:21 | 1191248 dark pools of soros
dark pools of soros's picture

If Tyler wants to short and shit on a company he can.. this is new market dynamics

Thu, 04/21/2011 - 00:17 | 1191245 dark pools of soros
dark pools of soros's picture

the company is legit but the products are more sizzle than solid...   but they did replace a bad memory stick with little fuss the other day

Do NOT follow this link or you will be banned from the site!