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Wednesday, September 25, 1996 Iomega was up $1 3/16 Tuesday, closing at $20 (+6.31%). TODAY'S RECAP: Iomega was up sharply in trading again Tuesday, and closed above the teens for the first time in over two months. In fact, Iomega shares have risen almost 40% since their close at $14 3/8 on September 17, just five trading sessions ago. The only news to speak of Tuesday was an announcement from Liuski International, Inc. (Nasdaq: LSKI) that it would be offering Iomega products through its national wholesale distribution channels.
There was a report on the Iomega board Tuesday evening from ~GWCII~ at 17:02:32 EDT that Todd Bakar of Hambrecht & Quist had lowered his earnings estimates for Iomega for fiscal year 1996 from $.46 to $.41, and for 1997 from $.82 to $.77. This post drew no significant reply from anyone else on the board, and so far this earnings revision must be considered unconfirmed. Perhaps we will hear more on this as the day wears on.
With little news to consider, activity in the folder was unusually light. And with the stock moving upward so forcefully, the mood among IOMG longs was (naturally) quite upbeat. Some participants from the early days of the folder showed up to say hi, contributing to an atmosphere that seemed like a meeting of old friends. The inclination to post humor was irresistible for some. We've collected a few of these gems, mixed amid the usual hard news, below.
INDEX: (Use the Search or Find feature of your word processor to locate the article number [Find: 1++, 3++, etc.]--or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOMG Today window and try again.)
1++SMyers33 offers her Top 10 List of "shouldas." And now, the Best of the Board... Started 3 a.m. 9/24/96. 1+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Top 10 list of why I shoulda Date: 96-09-24 08:41:18 EDT From: SMyers33
Someday, when I'm old and gray and Iomega is 300 to stay, I will say I held onto a my iomg. But this summer, I ain't been so happy. I'z been thinking alot about that brief shinning moment when I was an iomeg-aire. I'z been thinking about the Ten Reasons I Shoulda Known to Sell Iomega in May:
10. When my wonderful gay hairdresser begged me to tell him how to buy this iomega stock baby. He had heard about my iomg wizzardness through my investment partner's best friend's wife's father's best friend.
9. When Red Blooded American Boys started believing Iomega was better than sex. Honey, Iomega is Iomega. But sex is SEX!
8. When I told my Chairman of the Board (ie my bosssssssssssssss) to buy iomg and he did and then he bought more and more and more and it went down and down and down.
7. When I started believing this is easy and I'm so smart and everybody else is dumb and I'm Hot Stuff and the Gardner Boys are cute but they are wayyyyyyy to conservative.
6. When I was gettin up at 3:30 am to see if e-schwab had updated my account balance. Oh, my, how I don't like to look at it now. Where or where did those zeros go?
5. When I stopped buying all the way up and started buying on the way down. Ouch!
4. When my husband's stupid football buddy who is the biggest joke there every was finally bought iomega at 55 after I had been told him to buy at 15,20, 24, 30, 35 and 40.
3. When I followed an economist's predictions. Now Charles is sweet and brilliant. But I was an Economics major in college. The one thing learned for my $100,000 degree is that all economist are always wrong. Welcome Back Dear Charles. We love you.
2. When I, the gal with 1000 folks in her computer roledex, ran out of friends to tell to buy iomega.
1. When I wanted to quit a job I loved so I could watch iomega all day. When a million wasn't enough, I wanted more.
Thank Goodness I kept my job!!! Welcome back from the dead iomega. Let's fly again.
Susan 2+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: IMPX, What Is The Fuss? Date: 96-09-24 09:32:26 EDT From: NOVWOO
Endesco: << Io "rocked steady" TODAY while the market went down.>>
<<Forget IMP, that kind of news would rock IO in July, but it won't budge it TODAY. 2 earnings downgrades did not budge IO. in the same day.>>
Agree. Iomega the Stock TODAY is seasoned to all kinds of severe market conditions: adverse rumors, innuendos, some isolated bad press/media reporting, vaporware attacks and preemptive strike announcements against Iomega products by the also-ran,...,etc.
Bucking two earnings downgrades in a day a few days ago was the defining moment that Iomega has been seasoned. A:Zip BIOS news later added to the strength. IMP news should not be a problem to Iomega. It is at most a little test.
I have noted two things in the news release that contributed to IMP's misfortune:
1. <<"significant yield losses" on deliveries to a major customer.>> meaning big production yield losses on chips that are to be delivered. A PRODUCTION PROBLEM. Those who are familiar with semiconductor process problems know what a yield problem is. If the regular yield of a type of chip is 98%, 95%, 90%, 85% or whatever, a serious yield problem can drop the yield down to 50%, 30%, 10% or a total shut down of production. Although the IMP yield problem has since been corrected, whoever the customer was might have canceled original orders and shifted some future orders elsewhere. That usually may happen after a major yield problem. The delivery lead time or production cycle time for this kind of chips is what? At least one month? More time for the ramp up if after a shut down? So IMP could have suffered a significant loss of "demand" of its chips because it failed to deliver them and lost the following orders (demand).
2. <<at the request of a major customer, it canceled development of a custom read-channel device>> <<revenues in fiscal year 1998>>: Doesn't look like this device was going to ship until 1998. Sounds like a change of supplier, or a change of design of customer's new product that rendered this IMP device unnecessary for the customer. You just don't cancel something more than 15 months down the road for sales reason of any current products.
Then there is a one time charge mainly due to "the termination of the gate array business"
Doesn't matter who that "major customer" was in 1 and 2 (could be different customers too). Go ahead and assume that customer were Iomega in both incidents. As I have analysed in 1 and 2, IMP's problems could not be the result of any sales weakness of Iomega products. And these IMP problems should not have caused any parts shortage for Iomega as there seemed to be plenty of Iomega drives shipped to the retail shelves and they were turning over fast (as observed by most at different U.S. retail stores). No consistent and prolonged periods of selling out of products in stores during the past two months were reported. (Zip models at times were briefly sold-out but replenished pretty fast.) The problems should not cause any future parts shortage because Iomega was reported as developing a second or third source for the chip.
How could that be? Maybe that major customer was not Iomega. Maybe the second or third source was well developed. Or, when or if IMP was ever a sole supplier of the chip, Iomega stocked just enough inventory of chips in case of the rainy days or for the switching of suppliers. Prudent planning avoided problems.
So, what is the fuss? 3+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: News Date: 96-09-24 10:55:58 EDT From: MF Jeanie
Subj: Liuski International Announces Distribution Agreement With Iomega Corporation Date: Tue, Sep 24, 1996 10:46 AM EDT From: AOLNewsProfiles@aol.net
NORCROSS, Ga.--(BUSINESS WIRE)--Sept. 24, 1996--Liuski International, Inc. (NASDAQ National market:LSKI) announced today that it has entered into a distribution agreement with Iomega Corporation, Inc., one of the fastest growing PC storage solution manufacturers in the computer industry.
According to the agreement, Liuski will carry the full line of Iomega data storage products including: Zip drives and disks; Jaz one-gigabyte drives and disks; and Ditto tape back-up drives and tape cartridges.
"Iomega's award winning products offer some of the best storage options available," commented Chuck Marsh, senior vice president of sales and marketing at Liuski. He added, "In today's market, PC users require more significant storage capabilities for multimedia and Internet purposes and Iomega drives and disks provide flexibility, convenience and drive expansion capabilities to meet these needs."
"Liuski is a great addition as a channel partner because they are so effective at penetrating the systems integration market. We are also excited about making our products available with the Magitronic line of systems," said Gary Jones, Iomega's Director of North & South American Distribution.
Iomega Corporation provides personal computer solutions that help people manage their "stuff" -- anywhere. These solutions include: Zip drives and disks; Jaz one gigabyte drives and disks; and Ditto tape backup drive and tape cartridges. Used in homes, business, government and education, and by creative professionals, Iomega storage solutions are available through computer retail stores, resellers and major distributors. The Company can be reached at 1-800-MY-STUFF (800-697-8833) or on the World Wide Web located at http://www.iomega.com.
Liuski International, Inc. is a national wholesale distributor of more than 1,850 brand-name microcomputer peripherals, components and accessories with eight sales locations in the U.S., Canada, Hong Kong and Taiwan. Liuski also assembles and distributes its own Magitronic(TM) brand personal computers and notebooks. For more information about Liuski or its product line, contact Liuski at 6585 Crescent Drive, Norcross, GA 30071. Sales: 1-800-4-LIUSKI. Corporate: (Tel.) 770-447-9454, (Fax) 770-368-8095. -0- EDITOR'S NOTE: Iomega is a registered trademark of, and Zip, Ditto, Jaz and the Iomega logo are Trademarks of, Iomega Corporation. All other brand and product names are property of their respective companies. CONTACT: Liuski International, Inc. Chuck Marsh, 770/447-9454, ext. 3140 770/447-8335 (fax) 4+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re: Liuski International Ann Date: 96-09-24 16:09:59 EDT From: SundialMan
Years ago when I sold pcs, I actually visited the Liusky sales office on Long Island NY (near the Hauppauge LI "Silicon Valley"). It is a major wholesaler, some would call it second tier, the type small operations like the one I worked for bought their pc components from to fill their orders of typically 1-50 units. This is a further penetration into the type of place that would supply a small factory on Long Island or an order from a store in a strip mall for pcs. Better specifics, Cynicalguy, you will have to look up on Hoover or Strategic Investor, etc. 5+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:H & Q revises earnings Date: 96-09-24 17:02:32 EDT From: GWCII
On Bloomberg at 4:19 Todd bakar revises fy96 from .46 to .41, fy97 from .82 to .77. Old news? 6+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: sales slowdown Date: 96-09-24 22:00:53 EDT From: LarryChief
I've been worrying this over....
Sales slow in July-August??
Y'know, I like to do channel checks, and did a bunch both locally and while travelling all over the NE during July and August. These included Circuit City, Egghead, Best Buy, Electronics Boutique, Computers Etc, CompUSA and probably several others. I never got the *slightest* hint from a single store that there was any slowing in IO product sales....Of course, words from sales guys are strictly anecdotal, unless you are regularly visiting the same store and getting some hard numbers, but when they *all* routinely use the same words (as reported on the board all the time), one tends to get an overall picture of the status of sales, at least qualitatively.
So if there was really a significant slowdown in July and August, it throws a little doubt into the validity of the channel checks we are doing.....
The 3Q report will be interesting, to try to decipher unit sales, but I think this will be difficult to do......
Larry 7+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Good Press for Olympus Sys.230 Date: 96-09-24 22:03:05 EDT From: MF DTurkey
From the MacWEEK web site:
<<<Last week I played with the first product that I believe has the potential to take the wind out of the Zip phenomenon.
It's the Sys.230 magneto-optical drive from Olympus. It's fast, offers more than twice the storage per cartridge than Iomega Corp.'s Zip drive, and it has the right price - $299 to $359.>>>
<<<It's not just APS' cartridges that are inexpensive. Somehow, the group of companies that make MO mechanisms and media finally got it through their thick heads that there might be a business in selling razor blades after all. (Gee, MO drives have only been around for more than five years.)>>>
To read the entire article, point your browser to http://www.macweek.com/mw_1037/opinion_olympus.html
Dan 8+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: October Surprise? Date: 96-09-24 22:49:49 EDT From: EBLUESTONE
I have been an investor in Iomega since April of 1995. For a number of reasons I have held on to every single share of Iomega. I have long been a believer in high capacity removable disk storage for PCs. I believe that the Iomega Zip and Jaz drives are the right products selling at the right time. Any competition would be bullish for Iomega and a signal that the big guys have confirmed that the market for high capacity removable storage is immense and Iomega does not have to do all the missionary work. In any case, the Zip and Jaz Drive type of technology will command the removable storage market until some star wars type technology comes along and supplants it within the next twenty years. For now and for the foreseeable near future, competition to the Zip and Jaz is non existent.
Having said all this, I should therefore feel pretty comfortable with my investment in Iomega.
There is an uneasiness abroad and within me. A feeling something isnt right, Im twisting in the wind. With all the above, why? Is Kim Edwards not up to the task? Has he hidden something he has an obligation to share, with those who share our company. Or are we in for an "October Surprise", to borrow a coined phrase?
How could it be possible that third quarter sales will be lower than second quarter sales. The only way that can happen is if Zip sales have dropped precipitously and that Jaz ramp up is more difficult than we have been led to believe. If that is the case, then Kim Edwards has intentionally deceived us. He knew then, at the end of the second quarter, that Zip demand was not only challenging in Europe, but in fact Zip demand was challenging everywhere and that Jaz startup is more difficult than anticipated.
If my suspicions are correct, it would have been far better to have given us all the bad news at once, rather than try to hide it and letting it out slowly. The Street would have forgiven him. After all, his experience is in consumer sales and not in technology roll out.
Quo Vadis? 9+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: caffeine Date: 96-09-25 00:53:48 EDT From: Kevinfurr
Uggh, just woke up, still drowsy. What's with this growth of beard and hair down to my shoulders? Where did all the cobwebs come from? Just meant to take a quick nap. Hope I still have some milk in the fridge. 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:caffeine Date: 96-09-25 01:13:23 EDT From: Huibs pht
..ok, now that Kevinfurr is back, I think we've got most of the folks from folder one..
..time to go longer.. :)
:) huibs..
..welcome back, you have been missed.. 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Perspective. Date: 96-09-25 02:24:43 EDT From: Oregonman1
Hi,
What a summer...What an education! Very nice to see some old bulls here tonight.
I have a story about a gambler:
The gambler got to the horse track with $2. He bet on a long shot to win and the horse came in.
In the 2nd race he bet it all on the long shot to win and that horse came in. In the 3rd the same thing happened...and the 4th....and the 5th and so on . At the final race he plunked down about an enormous amount of money ( all of it ) on his pick. The horse finished second.
When he got home his wife asked "how did it go at the track tonight?" His reply............."I lost $2"
We try to keep perspective over the long haul.
Always humble in the presence of Foolishness. Rick Carlin Oregonman1 aka MF Oregon
End Report. Posts covered through 3 a.m. 9/25/96. _______________________________
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