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Friday, November 01, 1996 Iomega was down $13/16 Thursday, closing at $21 9/16 (-3.63%). TODAY'S RECAP: A Tale of Two Timothies? Halloween was celebrated in the IOMG folder last night... as some readers called for the public lynching of a key Iomega executive. Our forum was thick with wrath aimed at Marketing VP Tim Hill, who (in the opinion of some) "tricked" Iomega shareholders with his sale of half his stock options. Others focused on the "treat" of seeing a certain Mr. Timothy R. Good recruited from Apple Computer to assume global responsibility for Iomega's information systems. But it was the first Timothy (Hill) whose spectre haunted much of yesterday's folder, as Fools debated the relevancy of his options sale to their investments. In keeping with the holiday, some were spooked by this turn of events while others conceded that Mr. Hill had more than earned his right to take home a bag of goodies. America Online subscribers who would like to see the complete press release regarding Mr. Good's new appointment can find it 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++Bigfootmm considers some possible explanations for Tim Hill's option
sale. And now, the Best of the Board...Started 3 a.m. 10/31/96.
1+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: another word on option sale Date: 96-10-31 06:44:43 EST From: Bigfootmm
Three reasons come to mind why Tim Hill may be exercising options. First, he may see a failure in Iomega's marketing plan. Is that funny when you write it out like that? Yes, it is.
Second, he is exercising the options, but not selling them, just holding them for future sale to minimize taxes. This is commonly done by founders of companies who have lots of options, and awesome future tax liabilities. I'm not sure if Mr. Hill is in this category.
Third, ask yourself if you had a chance to put away a couple of million dollars, for the first time in your life, and still hold enough options and shares to make you wealthy many times over if the stock continued to rise, would you do it? The risk is so small in selling and taking some money off the table that only a not very smart person would continue to hold everything in one stock. Mr. Hill looks like he has gotten very comfortable. Nothing wrong with that, is there?
Bigfoot 2+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Todays News... Date: 96-10-31 08:02:10 EST From: FAmos100
Good morning :D)
A member from Merrill Lynch Registered 100,000 shares of IOMEGA, news came out at 5:00 AM 10/31 under Federal Filings..... I dont think he thinks IOMG is a sell.
Lets see how wall street likes it... I like it!!
FAmos100 Anthony 3+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Tim Hill/Barb Payne Date: 96-10-31 10:58:28 EST From: MNNML
1. The fact that Tim Hill is selling is a factor. My guess is that any insider (even if restricted) is going to try to sell at the highest point possible. Although I disagree with BarbPayne's analysis here, I had exactly the same thoughts. Those of you who didn't at least 'wonder' about this, are probably the same people who rationalized the valuations of the IOM at 55. Certainly, insider buying is more important than insider selling - how much insider buying has there been?
2. For those of you predicting (hoping for) a rise to 35, what effect will tax-loss selling have on the price of IOMG from now to January. What effect will the overhead supply (i.e. people who have bought at levels higher than here selling out as the price gets to their break even point?
3. Re: Comdex.... Comdex Schmomdex.
4. Re: Moving to the big board. Some have posted here that the short MMs must cover before the move to the big board. IMHO, this isn't true. Can anyone document or dispute this assertion. My guess is that the move to the big board will be a very small positive in that it gives the company a broader 'audience' of purchasers. 4+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Iomega rally fizzled out Date: 96-10-31 10:25:31 EST From: MonirM
Looks like SyQuest is rising from the ashes.
SyQuest just got another $11 million in financing. They got some of their debt converted into equity by their suppliers. This is always a good sign, because it indicates that the suppliers believe the company will succeed. The company also improved its balance sheet by getting another $40 million in long-term debt converted into notes payable with a time frames of 12 to 36 months.
Although SyQuest isn't going to compete with Iomega in the 100 MB area, their EZFlyer 230 MB drive is doing quite nicely and is turning a profit for the company. In addition, the SyJet will be officially announced in about two weeks. It's a 1.3 GB drive, 30 percent larger than the Jaz in storage capacity, and it costs $.07/MB vs $.10/MB for storage when compared to the Jaz.
It looks to me like SyQuest is getting their act together again. The new management team has been doing a great job of getting the company back on track.
Whether you're a fan of their products or not, it looks like they are improving their operations, and that's why they successfully beat the delisting threat earlier this year.
The best part of the story for investors is the stock price: it has taken a major beating in the past year. The market cap of the company is around $60 million, compared to $2.5 billion for Iomega. If market values balance out, we ought to see the stock rise to somewhere around $20 within a year, based on the solid operating performance that the new management seems to be cranking out.
Monir 5+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Iomega trade pattern Date: 96-10-31 10:34:52 EST From: Tjabeles
I have noted on a number of days that in the last ten minutes there is a sudden onslaught of trades reported which increase the price significantly. Yesterday many trades totalling 400,000 shares suddenly were reported in the last ten minutes increasing the price by 1/2. It looked like tape painting, something not as likely when on the NYSE. The NYSE announcement earlier in the afternoon seems to have stemmed the sales dropping the stock to 20 1/4, but a transfer for a tech stock to NYSE has not signaled in the past a rise in the stock. Microsoft, Intel and Cisco have not suffered by being on NASDAQ as to performance or institutional support. The effect here is more psychological, saying Iomega is a sound big company, not one intending to rely on hype. In fact management has not relied on hype but has attempted to state clearly where it is, its pluses and minuses. When Hill and other insiders have announced and sold stock (real stock not options), this was a major first for this company and is something to be considered. But tech insiders sell their cheap stock to realize on the profits and use it for other things-for Hill over $5 Million dollars. The timing is important however. When two insiders sold in early September nearly 300,000 shares, they sold at $13 per share. 20/20 hindsight, the next month they could have sold at 22+. This means something. Hill probably knows more than nearly anyone-he thinks this is a good price. Is he mistaken when he assumes Iomega is not in for a sharp rise? One thing is sure posters know less than he does. Insider selling is not a real problem unless it is continuous over a period; nothing can cut short a rally or discourage investors like repeat large insider selling such as has occurred at EMC over the last couple years. 6+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Iomega rally fizzled out Date: 96-10-31 11:24:11 EST From: MF DTurkey
<<<In addition, the SyJet will be officially announced in about two weeks. It's a 1.3 GB drive, 30 percent larger than the Jaz in storage capacity, and it costs $.07/MB vs $.10/MB for storage when compared to the Jaz. >>>
For the benefit of those just joining us here, the SyJet first appeared as an empty shell locked in a glass case at the SyQuest booth at PC Expo in June 1995. Since then there's been no shortage of announcements about the product, from transfer rates and other operational specs, to various shipping dates. The only thing that there has been a shortage of, is actual working SyJet drives.
MonirM, do you have any reason to believe this "official announcement" will be anything more than another useless press release?
Dan 7+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Iomega rally fizzled out Date: 96-10-31 11:39:28 EST From: Quiltman
<<<Subj: Iomega rally fizzled out Date: 96-10-31 10:25:31 EST From: MonirM
Looks like SyQuest is rising from the ashes.
SyQuest just got another $11 million in financing. They got some of their debt converted into equity by their suppliers. This is always a good sign, because it indicates that the suppliers believe the company will succeed. >>>>
No, it doesn't necessarily mean the suppliers believe the company will succeed. SYQT had no money to pay their suppliers. With the prospects of getting pennies on the dollar if they force them into Chapter 11 and losing SYQT completely as a customer (and losing a future revenue stream) they had no choice but to go along, IMHO.
<<<Although SyQuest isn't going to compete with Iomega in the 100 MB area, their EZFlyer 230 MB drive is doing quite nicely and is turning a profit for the company.>>>
How do you know?
<<<In addition, the SyJet will be officially announced in about two weeks.>>>
It has been vaporware for about 9 months.
<<<It looks to me like SyQuest is getting their act together again.>>>
It looks to me like they have left all of their EZ 135 customers out to dry. 8+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Tim Hill and options Date: 96-10-31 14:17:10 EST From: RB61
Let me, if I may, present a scenario to you on Mr. Hill's decision to lighten up on his position in IOMG. I picture Mr. Hill kind of like most of us, middle class or upper middle class who have worked hard for the past 15 years or so to provide him and his family a nice way of life.
Flash back to last May. There were many of the Fools who, in less than a years time, found themselves with a net worth in excess of a million dollars. Some, much more than a million. We started to dream of things we never would have allowed ourselves to even dream about, let alone actively think and plan for. Well, those dreams vaporized during the hot summer months along with the stock price. Mr. Hill and many of the IOMG employees had their dreams vaporized as well as us Fools.
It's been five months since last May. Alot of time to think things over. Alot of time to listen to our spouses (Why didn't you sell when I told you so?) I'm sure Mr. Hill has gone through the same thoughts. In his situation, he can lighten up on half of his options and get $5m before taxes. This still leaves a very large position in the stock. How many of us would take a guaranteed $5m with a future possibility of much more? It makes for a happier home life, you now never have to worry where the money will come from for that major repair or expense. In short, you can now live your life without any of the financial worries that come to middle class or upper middle class people.
I wonder how many of us that were in a situation last May to dramatically change our lifestyle and lived to regret it, would not gladly change places with Mr. Hill today? Financial security for someone in their thirties, like Mr. Hill, is a very sought after goal. Once that is obtained, Mr. Hill can channel all of his energies towards making certain that other half of his options become even more valuable.
In short, I don't blame Mr. Hill one bit for doing what so many of us wish we could do. I also don't think that it is any reflection on his outlook for IOMG. If I am correct, options are awarded to the top officers each year based on certain performance guidelines. So it is not like Mr. Hill is selling half of all the options he will ever get. No, it is just half of the one's he has on hand right now. Congratulations to Mr. Hill for doing a job well done. I look forward with anticipation to the future.
Fool On,
Robert 9+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Tim Hill and options Date: 96-10-31 17:08:06 EST From: MF Jeanie
<<Then again, he might know something... Stand back and look at this situation critically, without trying to rationalize bad news.>>
It may be time to remind everyone again of the law.
Insider trading based on knowledge of upcoming events not publicly known is an SEC violation and subject to serious penalties. Given the past history and track record of Iomega's business ethics, I am confident that this is NOT something I need to worry about.
Please folks, let's be more careful about casually tossing out such veiled accusations and innuendos regarding Mr. Hill's motives.
Jeanie 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Why is Iomega not moving? Date: 96-10-31 18:09:19 EST From: Ind Sales
This company is doing a great job!
The point I have tried to make, many many times is this.
With a current PE of 60, down from a marslike figure, this company still has to catch up to the stock price. Continued earnings growth the next 2-3 quarters should do it. Last quarter did not.
What we have here, and I repeat myself, is a great $15 -$19 stock. Those of you who still do not believe in the laws of gravity, value, and common sense, please be very careful in 1997.
Steve Hinchey
IND SALES 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Swan info Date: 96-10-31 18:14:53 EST From: BBu84
I found Swan Instruments website. It is www.swan-usa.com There is a bit of info on the Swan drive plus a couple of pictures of it. When will this drive be available to consumers?
Product Description <<Swan's Ultra High Capacity ("UHC") flexible disk drive and diskettes provide users with high speed, high capacity 3.5" flexible media with 100% backward compatibility. The UHC 3260 is a 130MB flexible disk drive with an additional internal fixed 130MB flexible disk that also reads and writes to standard 1.44 MB microfloppy diskettes.
Now you can get hard disk performance from a removable 3.5" microfloppy diskette. With Swan's UHC technology, large individual files can be accessed directly from the removable diskette. In addition, you can now use a UHC as a bootable system disk, carrying your entire computing environment with you in your shirt pocket.
The UHC 3260 has hard disk drive performance with 18 msec average access times and 2.0 MB per second sustained data transfer rates for the UHC diskettes. There is a 10:1 improvement when reading and writing standard floppies.>> 12++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Swan info Date: 96-10-31 18:46:06 EST From: PKeeler
The Swan drive is Frankenstein's monster of disk storage. Pieces of every type of magnetic storage device sewn together to produce something half-removable, half-fixed. I've seen several posts lately (always on down days...) asking about Swan this and Swan that. Here is a quick response, my opinion, of the latest, maybe sincerest, post:
<<Swan's Ultra High Capacity ("UHC") flexible disk drive and diskettes provide users with high speed, high capacity 3.5" flexible media with 100% backward compatibility. The UHC 3260 is a 130MB flexible disk drive with an additional internal fixed 130MB flexible disk that also reads and writes to standard 1.44 MB microfloppy diskettes. <<<
Frankenstein...how appropriate for Halloween. :) All empirical evidence points to the fact that price counts in removable storage. How can the UHC compete with Zip when it has all the components for 3 separate drives? Further, the Zip was cheap right off the bat (another Halloween reference) because most of its components had been mass produced in other devices. The Swan/Mitsumi head mechanism has NEVER been manufactured, except for whatever prototypes these companies have made in the last 5 years since it was patented. So in 1994 the Zip drive head (standard hard drive head) had been produced maybe 500 million times which had to lead to reduced cost. It was the fact that the drives were too expensive (compared to Zip) that has left the LS-120 and EZ-135 in the dust. The same will happen to the UHC, IMO.
>>> Now you can get hard disk performance from a removable 3.5" microfloppy diskette. With Swan's UHC technology, large individual files can be accessed directly from the removable diskette. In addition, you can now use a UHC as a bootable system disk, carrying your entire computing environment with you in your shirt pocket. <<<
This drive is of course, INTERNAL ONLY (connects to floppy and EIDE controllers if I remember correctly). External Zips and EZ-135s completely outsell internals to consumers. In the OEM market the price is what counts. Bootability is not an advantage as BIOS improvements allow booting off any ATAPI device. If all the consumers who buy OEM machines have Zips, they won't want UHCs.
If you liked my post to HypeMenot about connecting an LS-120, you'd love a post describing how to set up this monstrosity in your computer. The sheer complexity of the device would probably limit it to OEM sales only.
>>> The UHC 3260 has hard disk drive performance with 18 msec average access times and 2.0 MB per second sustained data transfer rates for the UHC diskettes. There is a 10:1 improvement when reading and writing standard floppies.>> <<<
Of course it has hard disk performance; it has a built in hard disk. Who cares how fast you write 3.5" floppies. The files are so small speed improvement is not noticeable. Swan/Mitsumi never tells you if the specs are for the fixed disk or the flexible disk (I would guess they would quote the best and that would mean the fixed).
Well, I felt compelled to respond with my opinion on the latest greatest competitive threat. I know that I throw out this post into a vast sea of posts about insider selling (Barb posted facts which is all I ask. Iomega insider selling has signaled nothing in the past) and stock price moves and non-moves (come on people its called a base and its good for long term holders). I see Matt Dugas was back recently. Maybe he and Kevinfurr, r-moose, e/d-trukey, ben70, Mr. Rappaport and Jimbo can give comments on the UHC and we can have some meaningful discussion. Maybe not.
PKeeler Patrick Keeler Happy Halloween, don't be scared by vaporware. 13++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Iomega at the Eye Academy Date: 96-10-31 21:56:59 EST From: Sunraydoc
Just got back from the American Academy of Opthalmology in Chicago, and have some interesting things to tell. To begin with, I was on a tight schedule, and disappointed that there wouldn't be time to do a few channel checks in Chicago whilst there...:) But, I resigned myself to sticking to business, which consists of going to talks and spending time out on the exhibitors' floors betweentimes. Not too tough to take, since this is a huge professional meeting, with acres of exhibits of the latest in eyecare technology. Since the U.S. does lead in this field, there are as may foreign docs there as Americans, as well as many overseas companies, especially the Japanese.
Though I made no, repeat no, attempt to look for an Iomega presence there, I came across the following:
1) I visited the booth for the Mass Eye and Ear (read Harvard) Digital Journal of Ophthalmology, and spent some time talking with one of the creators of this online journal. As he was showing me the journal, I looked over and noticed that he was running his demo off--you guessed it, a Zip drive. He loves the Zip, and said that most of the professors and residents at the Harvard eye program had Zips for storing and exchanging video and still images related to eye disease and surgery. He opined without any prompting (at all) that the Zip would replace the floppy in 3-5 years.
2) At the booth for Tomey, a Japanese corneal mapping technology company, I noticed that all their topography units came with an external Zip for storage of topography studies. The rep at the site said the portability, availability and capacity of the Zip made it right for their needs.
3) Briefly stopped at the display of a company producing wireless computer technology for the ophthalmic office, and noticed a Zip next to their computer; the young lady at the display was only minding the store until their technical reps got back, but indicated they liked the Zip....she then announced they'd just gotten a Jaz, seemed quite pleased about it.
4) My wife attended a seminar given by one to the leading experts in intraocular lens power calculation, whose name I'll omit for his privacy, not to mention the fact that none of you ever heard of him anyway....:) During his talk he recommended the Jaz for storing lens power data. My wife said he specifically said, "not the Zip, the Jaz..." for speed and capacity reasons.
Mind you, I only covered about 10% of the exhibits at this meeting, due to time constraints. Heaven knows how many other Zips and Jazs I would have found had I been looking specifically for them. Obviously, I came home optimistic about Iomega's long term prospects. Oh, and I must admit to being amazed at the volume of posts devoted to this Tim Hill thing---which amounts to less than a blip in the unfolding story of a great company. Thanks to Bigfootmm and others for bringing some prospective. Goodnight, friends.
Sunraydoc
End Report. Posts covered through 3 a.m. 11/1/96. _______________________________
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