Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Why Are Fusion-io Shares Up So Much Today? Flash Madness, Naturally.

flash_madness-featureShares of the flash memory technology company Fusion-io are up by nearly 20 percent today on a boatload of good news.

As of 3:05 pm ET today, Fusion shares were trading at $19.89, up $3.26 (or 19.6 percent) from a $16.63 closing price Wednesday. For one thing, the company reported quarterly results yesterday, and gave forward guidance for the current quarter that was better than anyone expected.

Another thing? There’s a new Facebook data center going up in Iowa. And as everyone who follows Fusion-io knows, Facebook and Apple are its marquee customers. A new data center means that a lot of new Fusion-io products are selling.

As CEO David Flynn pointed out in an interview this morning, that can be a blessing and a bit of a curse. Earlier this year, Facebook and Apple trimmed orders and Fusion was forced to trim its outlook. Now, with Facebook building again on a site that’s big enough to accommodate at least two more facilities just like it, there’s a brighter outlook. But if you take out the up-and-down side of Fusion’s business that caters to Apple and Facebook growth, Flynn said, there has been a nice, steady, predictable ramp.

There are also new customers to report: Box, the fast-growing enterprise cloud services company, has started adding Fusion-io products to its servers. So has music service Spotify.

Then there’s the matter of the $119 million acquisition of NexGen, a Louisville-based company that specializes in taking traditional hard-drive-based storage products aimed at mid-range companies and combining them with Fusion-io’s flash-based technology. The combination gives Fusion access to a base of customers it wasn’t previously reaching. “We started out reaching the companies at the top of the pyramid, and the fact is the size of the market opportunity in the middle market is bigger,” Flynn said.

The deal has Fusion paying $114 million in cash and $5 million in stock. It’s Fusion’s second acquisition this year. Last month, it acquired ID7, a British software firm.

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald