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nStor nTertains nTicement

Struggling storage subsystem player
nStor Technologies Inc. (Amex: NSO)
has been thrown a lifeline, or at least offered one, in the shape of $12 million offer by an undisclosed private investor that wants 45 percent of the company in return.
The offer, announced today by nStor, also requires nStor to convert all its preferred stock into common stock, as well as other conditions not disclosed (see NStor Fields an Offer). nStor, a spinoff from Seagate Technology Inc. back in 1996, has until 25 July to respond to the proposal.

And thats not all that’s been going on at nStor this week. The company's CEO, Larry Hemmerich, stepped down on Tuesday, and his deputy, Thomas Makmann, was named president and chief operating officer. Additionally, the board of directors elected its chairman, H. Irwin Levy, as acting CEO. According to a statement issued by nStor, Hemmerich left for personal reasons but has agreed to remain on as a consultant.

So why all the fuss about nStor?

Frankly, the company could be doing a lot better. Perhaps, with a fresh injection of cash (if they accept it) and new management, it stands a chance. At the end of March, nStor reported a first-quarter 2001 net loss of $3.6 million on revenues of $6.2 million, compared with net income of $2.4 million on revenues of $12.5 million for the same quarter a year ago. nStor’s stock closed Wednesday at 0.51 a share, down 8.93% from the previous day's close.

Hemmerich blamed the company’s poor first-quarter earnings on the overall economic slowdown and delayed purchasing cycles, a common complaint of late.