It's difficult to get a pulse on what's going on at OCZ Technology, though the fact that it still has one is at least a little bit encouraging. What investors didn't find encouraging is OCZ's warning that its customer incentive program will result in a "significant" quarterly loss and "materially lower" revenue than what was previously forecast. On the bright side, there's a new chief in town, and he doesn't seem much into sugar coating the situation.
OCZ appointed Ralph Schmitt as its new president and chief executive officer, effectively immediately. Previous to accepting his new role at OCZ, Schmitt served in the same capacity at PLX Technologies, a provider of semiconductor-based connectivity solutions aimed mostly at enterprise and consumer markets.
The press release announcing his hiring is filled with the usual optimism that accompany such things, though Schmitt is quoted as saying there are some "near-term tactical challenges" facing OCZ. He was even more candid during a conference call with investors.
"We are here to generate value for shareholders, and we've failed at that mission," Schmitt said, according to Mercury News. "We've lost credibility, but we'll gain it back with consistent execution that will achieve effective results."
Honest assessment notwithstanding, investors didn't react all that positively to the news, promptly sending shares of OCZ's stock down 40 percent to $1.88. According to Bloomberg, that's the biggest drop since at least February 2010. Overall, shares of OCZ stock are down 72 percent this year.
"There was such an emphasis in the second quarter from management to grow market share at all costs," Schmitt added. "Hence extraordinary incentives were undertaken."
Those incentives occurred under the leadership of Ryan Peterson, company founder and former CEO of OCZ. Peterson stepped down last month, handing the reins over to Executive Vice President and Chief Marketing Officer, Alex Mei, on an interim basis. At the time, there were reports OCZ might consider selling off its assets versus trying to relaunch the company. It appears with the hiring of Schmitt that it decided to go with the latter.