SiliconBeat

You have to forgive Silicon Storage Technology (ticker:SSTI) if it’s feeling a bit down in the dumps lately. The Sunnyvale maker of flash storage products for consumer devices could use a friend right about now. It’s struggling to sort out its potential backdated options problems, it’s fighting delisting by Nasdaq because it hasn’t filed financial statements in about a year, and its stock price has been hovering around $3 per share for the past few months.

On Thursday, SST got a big hug, but not necessarily the kind it wanted.

Los Angeles-based Riley Investment Partners filed a schedule 13-D indicating it now held about 6.1 percent of the company’s stock after going on a stock buying binge starting in late July. At the end, the fund attached a love letter of sorts explaining its interests:

“RIM believes the shares of the Issuer to be significantly undervalued…In fact, when one backs out cash and investments, the market is valuing SST’s NOR flash business, product pipeline and licensing revenue stream at only $60 million—which RIM believes to be an extremely low valuation by any measure.”

We all would like to hear we’re worth more than everyone thinks, right? But this love is not unconditional:

“RIM has communicated this view to the Issuer’s management… RIM’s desire, at this point in time, is to work assiduously and aggressively with the current management team on behalf of all shareholders.”

And here’s the catch:

“RIM’s sincere hope is that management and the Board of Directors share its sense of urgency…If they do not, it will force RIM to take a more proactive approach, one which will include, among other things, the nomination of new directors…communicating with other stockholders, making proposals to the Issuer concerning the capitalization and operations of the Issuer.”

I love you. I love you. Now do what I want. Or else.