Ryan Petersen, CEO of OCZ Technology Group Inc. (NASDAQ:OCZ) has resigned his position, according to a report from Reuters. This comes only a month behind the company's CFO, Arthur Knapp, announcing his retirement. OCZ's stock responded promptly to the announcement, by dropping 5% to $4.23 today.
Piper Jaffray's analyst, Andrew Nowinski shed a little light on the matter, when he said, "investor pressure and loss of credibility with the management, because of under performance in the last three quarters, made the company's board go for this transition."
Petersen has served as CEO for a decade, as he brought the company up from $10 million in revenue in 2002, to the $365.8 million they saw last year. Peterson was one of the firms co-founders, and much of the company's proprietary technology is accredited to his work.
FBN Securities' analyst, Shelby Seyrafi said, OCZ Technology Group Inc. (NASDAQ:OCZ) has seen worsening balance sheets, increasing inventory, and negative free cash flow, all of which reflects a weaker than expected demand for its products.
This statement rings true of the last few quarters. OCZ Technology Group Inc. (NASDAQ:OCZ) specializes in making storage media, which is known as solid state drives. However, the demand for their high end products has dropped in recent months, and they have struggled to keep an even keel. Many analysts believe that this is mainly due to a lack of planning on the part of the company.
One of the biggest factors analyst point to, when referencing the flailing company, is that there are no long term supply contracts with its suppliers. They say that this contributes to many of the company's problems. OCZ has recently faced a NAND shortage, as its only supplier of the components is Micron. Micron ran out of its 25nm supply near the end of the quarter, due to the fact that the company used them in their own SSDs.
Another factor which hurt their supply chain, is the fact that Apple is actively seeking suppliers of NAND components as well. The tech giant will most likely overload suppliers with orders in its next line of devices, and this could hurt companies like OCZ, as far as being able to purchase the pieces needed for its products.
OCZ Technology Group Inc. (NASDAQ:OCZ) has announced plans to increase its product's ability to operate and be more desirable to consumers. They're developing a 20nm NAND, which will work much more rapidly, as well as cutting down on costs for the company. OCZ Technology Group Inc. (NASDAQ:OCZ) hopes to be the first company to offer the new technology, once it's developed, and by doing so, they should be able to once again turn the tables of fortune, and save the company from further debilitating disasters.