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Friday, September 27, 1996 Iomega was down $1 3/8 Thursday, closing at $22 3/4 (-5.70%). TODAY'S RECAP: After six straight trading sessions without a drop, Iomega shares gave back more than 5% Thursday in a volatile session in which over 27,000,000 shares changed hands. Shorts called the loss a portent of things to come, while longs considered it a well-deserved rest. What, you expected them to agree on something? Amid all the mayhem, several new announcements were made: 1. Iomega announced its new marketing campaign, "Zip-Across-America." This project, described in an Iomega press release as "a national program designed to involve hundreds of thousands of young people in the election year through political decision-making and technology education," was launched today in front of the Capitol in Washington, by Jackie Joyner-Kersee and Representative Susan Molinari (R-NY). "The program, sponsored by Iomega Corporation, Newsweek, Inc. and Eastman Kodak Company, will reveal and illuminate the issues young Americans believe the President needs to address. Students in grades four through eight are encouraged to write letters to the President which they submit via e-mail or on computer disk." 2. Syncronys Softcorp (NASDAQ: SYCR) launched a new software program designed to allow PCs to mount, read, and write to Mac-floppy disks, "and other removable media such as the popular Iomega Zip and Jaz drives," according to their announcement. 3. It was also announced Thursday that Iomega would be making a presentation at an Investment Forum sponsored by "Emerald Asset Management, Inc., parent company to Emerald Research and Emerald Advisors, Inc., and by the HomeState Pennsylvania Growth Fund, which is managed by Emerald." The event is to be held October 3rd in Pittsburgh, Pennsylvania. As always, America Online members can review the complete press releases at Keyword: Market News. 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++MF Cubster reports the new H&Q numbers from Zacks. And now, the Best of the Board... Started 3 a.m. 9/26/96.
1+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: H&Q numbers Date: 96-09-26 05:34:11 EDT From: MF Cubster
This is from Zacks...now they (H&Q) are below JPM for this quarter. Looks like the world is appropriately focused past this quarter for IO.
IOMG: HAMBRECHT&QUIST decreased estimate for fiscal year ending 12/96 from $0.46 to $0.41 on 09/20/96 IOMG: HAMBRECHT&QUIST decreased estimate for quarter ending 09/96 from $0.09 to $0.06 on 09/20/96 IOMG: HAMBRECHT&QUIST decreased estimate for quarter ending 12/96 from $0.18 to $0.16 on 09/20/96
Cubster 2+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: PC MAGAZINE!! Date: 96-09-26 08:16:35 EDT From: Ryd33
For those curious about the abruptness and intensity of IO's recent rise, don't look to the "wise" publications-- NY Times, WS Journal, CNBC, etc. ( this is still a "foolish" stock-- if you don't understand take some time off-line and read the Gardner's book). More importantly, forget the stock and pay attention to the COMPANY news. PC Magazine's Jim Seymour in Sept.24's issue editorializes on the zip and jazz: "These are the only devices in the removable-media derby I consider realistic replacements for...a hard disk... I think the jaz is the big LONG-TERM (my emphasis) winner...the Jaz's combination of speed, capacity, and economy is so well tuned to the realities of the removable-storage market that I think it will be around for a long time. PC Magazine's Oct. 8 issue has editorialist Bill Howard stating that "If you're in the market for a removable mass-storage device, here are some suggestions 1) If you're planning to buy a new PC, get one with such a device already installed- you'll avoid installation hassles and get the drive at a cheaper price than you could've on your own; 2) Internal drives are cheaper than external versions: and 3) Parallel is convenient, but its slow. Choose SCSI or Enhanced IDE. There's been a lot of discussion about whether 100 MB devices sill replace the floppy disk. Iomega could become a standard because of its MARKET SHARE (my emphasis), but the price (currently 149 street) needs to get below $100 for end users or below $50 for PC vendors. I believe Iomega can do it and still make money." Those of us that know Kim Edward's strategy know that this price is in the plan. Remember, IO's vast market has only been fractionally realized, and those buying now (the non-techie types) are going to do their homework first-- my own PC and peripherals were purchased after digesting many PC Magazine articles. The above vote of confidence (the articles discuss extensively ALL the options-- nothing is left out) is all that the marketplace needs now that the zip is bootable. Forget the competition-- those that know already have. 3+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Zip Across America Launch Date: 96-09-26 11:34:54 EDT From: Waverunner
>> The program, sponsored by Iomega Corporation, Newsweek, Inc. and Eastman Kodak Company<<
Why is it that we are seeing Zip involvement with photography companies? Fuji, Canon, and now Kodak. Anybody see Zip drives in photography stores yet? It may never happen, but could Zip disks become the choice method of storing digital pictures? Todays IBD has a report on projected PC growth and says that pictures will be one area to stimulate PC growth. Yesterday Nikon announced the launch of a digital camera by end of November.
Film will be around forever.(or a few years at least :-) ), but with dropping camera prices and increased resolution the camera industry is reportedly extremely bullish on the prospects. Just dreaming, but tie ratios could become a little bigger.
BTW, my broker called to tell me about the "news" and said "What fabulous marketing".
Dave 4+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Syquest is doomed Date: 96-09-26 13:08:32 EDT From: MclAlex
I work in a large corporation with probably 5000 computers in-house. In the last few weeks I've noticed those folks who only have Syquest drives (many people here have both Syquest and Zip) are now APOLOGIZING to people about having to give them data on Syquest disks. Nobody wants to use them. It's the same thing with our outside vendors. I remember talking directly to Iomega about a year ago with a product question, and the guy there kept bringing up how they designed the Zip to be pleasant to use...friendly to use. It's clear to me that Syquest is on the way out. 5+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Zip Across America Launch Date: 96-09-26 13:09:42 EDT From: AJBoese
This campaign strikes me as fiendishly clever on Iomega's part.
First its timing: culminating right before Christmas, so that the Zip drive is in everyone's minds in those crucial two weeks before the 25th.
Then the idea of targeting kids by giving them each their own zip disk. What self-respecting parent won't then want to buy a zip drive for the home so that their little angel can view their creation?
Also, by giving the drives to the schools, parents will start to think that the zip drive is an essential educational tool for the home, so that their kid can carry files to and from school.
Great marketing on Iomega's part. This just deepens my respect for the company.
--alex 6+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: K. Edwards tending the store Date: 96-09-26 13:10:17 EDT From: MF Jeanie
Re: Zips Across America
<<Computer equipment will be donated to each school and school district visited on the tour.>>
Hmmm... just maybe... the Zips for Schools idea born on these message boards by Foolish investors gave seed to this fabulous promotion. Regardless, Iomega is to be applauded for pulling this together in such a high profile format.
Co-sponsoring with Kodak (digital cameras) and Newsweek insures some great national publicity for a little company that is on the verge of becoming a Big Name in the minds of average consumers and educators.
I have permission from ~KMil123~ to quote his statement made in the chat room this morning:
"Seems like Kim Edwards has been tending the store.... which all goes to prove that's better than tending the stock"
I think that says it all :-)
Jeanie 7+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Digital Photos Date: 96-09-26 14:12:30 EDT From: MF ETurkey
Waverunner addressed the digital photos concept, one that we visit every so often as that part of the photography business continues to grow.
I know that at least one company, Seattle Film Works, now distributes developed pictures on disk if you want. Another one, Mystic Color Lab of Connecticut is planning to do the same shortly.
Digital cameras are coming down in price, and the lowest I have seen so far is $339 for a Kodak. We are getting near interesting price points for those who may be interested.
I also remember that Edwards spoke about this subject at the nes conference at PC Expo this year.
In addition to that of course, is the rapid increase in sales of inexpensive scanners.
I think that this Christmas we will start to see a nice pick up in digital camera sales, but I would not expect to see it become a major issue until 1997.
Perhaps someone more knowledgeable about this stuff than myself can add to this?
Eric 8+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Joe Besecker Date: 96-09-26 14:22:37 EDT From: MF DrJimbo
The Dow Jones interview with Besecker is worthwhile. While little will be new to regulars here, what is very interesting is that he spoke with confidence about sales this summer. He said July was slow, August was better and September has been strong. He expressed confidence that the analysts have a good handle on what's going on, but implied that the difficulty with predicting bottom line earnings comes from doubts about the tie ratio disks to drives and how the ramp and inventory management are being handled.
His conclusion was that if you have confidence in the long term story, hold your shares and be prepared for lots of volatility. 9+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Digital Photos Date: 96-09-26 14:24:11 EDT From: MF Ben
<<<I think that this Christmas we will start to see a nice pick up in digital camera sales, but I would not expect to see it become a major issue until 1997.
Perhaps someone more knowledgeable about this stuff than myself can add to this? >>>>
I ain't more knowledgeable but that never stopped me before...
I think you are noticing what I've come to call the Input Revolution. Before (minor key music here), computers were monolithic, then came the mini, then the PC. With the PC everyone had an independent workstation but no real integration with each other until the advent of solid networking. However, the information being shuttled back and forth was pretty much the same stuff, just shifted from one computer to another. The flow of NEW information was inputted by KEYBOARD.
The input revolution adds a great many new ways to get new stuff into your computer without relying on the keyboard. AOL, the Web, scanners, cameras, television, it can all be put on your computer and each method drops in cost and improves in quality every month.
I posted last year how much I loved the "stuff" concept, the "consumering" of storage because it fit right in with the "consumering" of these DTP, DTV, and academic technologies.
The Kodak, Casio cameras, the built-in scanners, the WAV and AVI and MPEG files on the Web and AOL, these are the players in the input revolution. Computer storage IS changing. Period. Iomega's future role is debatable, especially how large that role will be, but the parameters are slowly being drawn.
Who knows what will be the hot product this holiday season. There always seems to be one or two CE scorchers. Retails would kill to have even a hint. Will it be digital cameras? DVD? NES? I dunno either. However, I'll bet that one of the scorchers will be part of the input revolution.
Cheers,
Benjamin
P.S. The new Aptivas have that monitor/desktop module with the actual tower located "up to 6 feet away" but the monitor/desktop module only has space for a floppy and CD-Rom, it looks like. If my tower is 6 feet away and it has my Zip, I'm not going to use it as much. Just an observation. 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Zip Across America Launch Date: 96-09-26 14:43:12 EDT From: RonaldM348
We made Indianapolis TV with the Zip Across America program on the noon news. Included a live interview with Jackie Joyner-Kersee. Zip mentioned many times. No company names mentioned. Will post more later. Ron Mason 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:io products Date: 96-09-26 23:00:28 EDT From: Burkie4321
I work for a large printing co based in canada, with 43 satellite divisions in the US. I was speaking with a CSR this morning about how information is transmitted so easily these days.
we got to talking of how the information used to be handled on syquest discs. he told me that when a publishing house sends out a job now, that zip discs are being used in much higher numbers now. he also said that no one uses syquest discs unless the job is a reprint and was originally set to a syquest disc.
he said that zip discs will have a very large future in the printing industry.
dan 12++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:TI Date: 96-09-26 23:08:42 EDT From: KatRiles
Also, good article in Data Storage about removable disk drive market, includes mention of IOMG, Matsushita and Mitsumi as three contenders. Don't know about copy right stuff, but article is definitely worth the read. IDC gives market projections, by year 2000, 3 years away, could be 17% of 14Billion market for products such as IOMG. Says need to establish market by 1997 for window of opportunity to stay open and one of these players needs to do it. 14Billion market includes other types of removable storage, like optical, Cd-Rom, etc. It seems to me that IOMG is establishing market pretty well here. Yeah there will be other types of storage used as well, and those numbers mean per year. Data Storage Magazine, Sept 96.
Kathy 13++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Margins and volatility Date: 96-09-27 00:51:43 EDT From: MF CapnWil
<<<Joe Besecker's conclusion was that if you have confidence in the long term story, hold your shares and be prepared for lots of volatility.>>>
Recently there has been some talk of using margin as the stock has begun to have some vertical movement. I believe it would be a good idea for any long term investor to review what happened to all of the people who were margined out during the last run up. There are many longs here who were hurt by the margin calls, and there are also many who would like to make up their losses very fast.
Today's action in the stock price should be a wake up call to those who may be considering using margin. It should be a warning to not do it. But if you do, make sure you know what you are doing and leave yourself plenty of room for error, because the margin calls can be disastrous.
Mr. Murphy issued a statement using TA that said the stock should go to the 30 to 34 range. Well that would be nice if it would, but I sure wouldn't count on it. If the subsequent price action was mostly short covering then what will happen to the stock when the shorts stop covering? Did they stop covering this afternoon? (It's still the 26th here in Calif.)
Remember, the 3q earnings will be coming out soon, and while the analysts have lowered their estimates, we still don't know where the earnings will come in. So how will other potential buyers of the stock play the game up until earnings? Would it be very risky for anyone other than day traders and long term buyers to be taking a position now, not knowing what the 3q earnings will be and what KE will say about the 4q? Would more institutions really want to be buying in here with the 3q uncertainties? These questions are thrown out as food for thought, because I certainly don't have the answers.
I remain optimistic about the future of Iomega with all of the great press releases, but am cautious right now because of the uncertainty of the summer results and short term earnings visibility, therefore I would recommend that we not get caught up in the euphoria and lose sight of what is or may be happening in the short term fundamentals.
One other thing. If we wish to not be taunted by the bears when the stock goes down, then shouldn't we not taunt them on the way up? Don't be part of the problem. Help to solve the problem by posting information that you feel will be helpful and informative to others.
Bill
End Report. Posts covered through 3 a.m. 9/27/96. _______________________________
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