Re: There's no price war
It will have to drop more to get acquired. And it will drop more, as you said it is a victim of long term decline and commoditization of storage, servers, flash, etc. This was happening with or without cloud, and with cloud it was game-over for an independent company like this eventually. HCI is also a factor but in my opinion a smaller one for Pure because HCI is really just VMware and Nutanix, not a really big market. Pure is in a death spiral ending in an acquisition but not yet.
Why not yet? I don't watch their stock but the numbers are something like 220M losses on a billion and a half in revs. Brutal. Forward multiple is low now but that is with Pure still forecasting growth and others forecasting decline. The are not going to take meaningful share. They are still overspending like crazy for revenue, as they always have, and actually accelerating this; other acquirers can sustain that and so would experience greater decline after an acquisition.And no acquirer needs their product. It is not differentiated now, the file pipeline is a non event and flashblade wasn't all that.
What's good? 7000 customers, strong gross margins, Product that works. That's all I see. At 4 beeellion+ market cap it would have to drop more to get bought and it will but I am not sure who needs it and would go through the hell of dealing with the field and HQ expense. Of course, private equity is eating the world...
To give them credit they got out fatrest on the flash trend, built a slick product and an effective and strong (if a bit weird) culture. They had a couple great technical founders. Bringing Delane in was good. But the management team is too insular and the current CEO was a huge mistake. They really flubbed the earning announcement blaming it on NTAP/Dell price war.
Biting the hand that feeds IT
