Tomahawk, WI 12/02/2013 (BasicsMedia) – OCZ Technology Group Inc. (NASDAQ:OCZ) is grinding to a halt and everyone can see that. This was always going to happen but unsuspecting investors kept piling the stock hoping that it would have a miraculous turnaround as did Ford Motor Company (NYSE:F) or Apple Inc (NASDAQ:AAPL) when the company was still very much into PC business. Unfortunately, for OCZ the decay is ending in bankruptcy.

A lot is at stake as the memory producer tumbles. Investors are facing possible loss of investment in the stock. This is going to happen regardless of whether the company seals a deal with Toshiba Corp. (TOSYY, 6502.TO) or chooses to liquidate its assets.

Payout priority favors creditors

Now that it is almost certain that OCZ Technology Group Inc. (NASDAQ:OCZ) is bidding goodbye to business as usual, the proceeds generated from the sale of the company will go into clearing any government dues in form of taxes and related expenses. Then the next in line will be the financial institutions acting as the company’s creditors. Then other creditors will be considered after which the focus can now turn to preferred shareholders. Whatever remains after this layer is what common stock shareholders can contend with.

Looking at how OCZ Technology Group Inc. (NASDAQ:OCZ) has decayed in value as it struggled to please investors with hard-to-verify financial statements, it doesn’t look like there will be much to squeeze from the company in sale or liquidation of assets. This is to say that chances of common shareholders getting something significant from their hold are very remote.

Perhaps the source of consolation is the investor action lawsuit in which investors are seeking compensation for damages resulting from the alleged cooking of figures by OCZ to win their confidence. This push for compensation is in the courts and decision regarding it can either be approved or declined by the court. If the court approves of the claim, then common shareholders can get some additional payout on top of what they fetch from the normal withdrawal settlement. However, if the court objects, then bad for common investors, it would be lost.

Sell out or liquidation

OCZ Technology Group Inc. (NASDAQ:OCZ) is in talks with Toshiba for asset acquisition. Toshiba will not be the first company to buy failing business. Micron Technology, Inc. (NASDAQ:MU) did it recently by taking Elpida when the company was at its worst state. Microsoft Corporation (NASDAQ: MSFT) has also just purchase the loss making unit of Nokia Corporation (ADR) (NYSE:NOK). The only difference is that OCZ has now turned into a big burden considering how it has lost its market share and valuation.

If the deal with Toshiba doesn’t bear fruits, OCZ Technology Group Inc. (NASDAQ:OCZ) is carrying on with bankruptcy filing that would allow it to liquidate its assets and salvage whatever value is left in them.

Given that talks have now shifted from turnaround to bankruptcy filing, it is only prudent that longs still holding the stock give up their hold when they can still fetch some pennies from their hold. The best time to do so is this week and no later than this Friday because OCZ Technology Group Inc. (NASDAQ:OCZ) doesn’t seem to be rising from the ashes like the proverbial phoenix.

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