Msystems denies sales rumors

MANHASSET, N.Y. — Israel-based personal storage company Msystems said it would not comment on recent rumors the company is for sale.

In addition, Msystems also said the company's position concerning prior stock options grants is contained in its annual Form 20-F filed with the Securities and Exchange Commission. The company earlier confirmed there were a "variety of deficiencies and irregularities" in its stock-option practices (see July 17 story).

Dov Moran, chief executive officer and president of msystems, commented: "The Form 20-F contains a detailed discussion of this matter. While we are proud of our core business and values, our board has adopted a variety of important corrective measures, we are implementing them to ensure that we do things right and are a stronger company for it." Other legal issues could also be facing Msystems. In a recent report, analyst Satya Chillara of American Technology Research Inc. said msystems "has recently launched its X4 technology. After reviewing the details, we believe [msystems] will have to address the legal issues surrounding Sandisk's IP."

Chillara added, "If the technology has the merits to go to the production phase, we believe Sandisk could be knocking on [msystems'] door for royalties," he said. "The X4 technology is based on NAND implementation, as opposed to Saifun's nitride-based NROM technology, which also has a similar 4 bits/cell technology. Sandisk has a strong hold on NAND MLC technology and it does not stop at 2 bits/cell."