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Can Aviza do a Tegal?

08 January 2009 | By Mark Osborne | Editor's Blog

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With the seemingly endless downward revenue guidance adjustments being made by large and small companies within the semiconductor industry, news that Aviza Technology also gave an update to its next quarterly results shouldn’t have surprised anyone. Expecting the obvious, the pleasant surprise was that Aviza said that it expects to exceed guidance.

Apparently, the cost-cutting measures, which seemed to have been a long-running affair at the loss-making equipment supplier, were proving a ‘success’ of sorts and that meant losses would be less than expected.

Since becoming a public listed company a few years ago, Aviza has never returned a profit. It now faces delisting from the NASDAQ exchange as its share price has been below $1 dollar for more than six months.

There is a host of parallels here with the fate of Tegal Corp. in the last major downturn at the beginning of the decade. Tegal fell foul of the $1 rule but eventually turned the company around, primarily going after niche markets with its core technology and left the mainstream semi biz to the bigger rivals.

Aviza has been attempting a similar course of action, made more difficult in the current economic mess. It is hanging on by its fingertips to stop falling into the bottomless pit known as OTC trading.

The news of reduced losses saw Aviza’s share price rise 200% so far today, so investors must be thinking that the company may yet survive to fight another day. There is still much do be done at Aviza, not least with the share price needing to climb 3x its current position to achieve the $1+ level. 

Here’s hoping!

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Reader comments

Editor's response: Thanks Dwayne, NASDAQ postponed delisting rulings for 3 months, starting on October, 2008. That said, they could extend it given the number of companies below the $1 ruling. However, companies like Aviza, went below the $1 level way before the market sell-off in September, 2008.
By Mark Osborne on 12 January 2009
Uh, Mark, hasn't NASDAQ suspended any delisting indefinitely?
By Dwayne on 09 January 2009

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