OCZ's competitors are diversified companies with many product lines, while OCZ makes just SSDs, so it doesn't have a more profitable product line on which to fall back. But it's also a matter of management. OCZ has had a tremendous cash burn rate. Even though it raised more than $200 million in cash from their IPO and other offerings, they have burned through it all.
The company has just $10 million in the bank, and that's after taking out a $30 million loan from Hercules Technology Growth Capital with what one writer on Seeking Alpha called "loanshark-like terms." The interest rate is higher than 15%, and if OCZ can't pay it back, then Hercules gets the entire company for $30 million, because OCZ put itself up as collateral.
Schmitt said the company's break-even point was about $110 million. The company just reported $33 million in revenue last quarter. The math is not in OCZ's favour. Plus it's being sued by investors over its past accounting practices, which some felt hid how much money it was losing.