Barron's financial analysis on SGI: "circumstances dire"

It’s interesting to me when broader communities peek into our little corner of the world. Today’s morsel is a story from Barron’s on SGI. It’s titled “Don’t Be Tempted by SGI”, so you probably know where the article is headed (tip to HPCwire for the pointer)

The stock (ticker: SGIC) is down 59% this year, and its valuation — it trades at less than one-third its trailing sales — may tempt some investors. But the history of the business shows that sales of big, expensive supercomputers are rarely profitable.

…The circumstances now are dire for SGI. It had just $40 million in cash, as of its most recent quarter, and it must begin principal payments on $12.75 million of the Morgan Stanley loan next year. It has incurred an operating cash loss of $65 million over the past four quarters. And on its most recent conference call, its chief financial officer warned of further indebtedness.