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Friday, November 22, 1996 Iomega was down $1/2 Thursday, closing at $21 1/2 (-2.27%). TODAY'S RECAP: Iomega's latest short interest figures were reported Thursday at 25,573,717 shares. These are shares which have been borrowed and sold in the expectation that they can be repurchased later at a lower price. The new number is down slightly from the previous month's 26,398,514 shares, but is still rather high, even for Iomega. What effect, if any, these shorted shares might have on Iomega's future price action is uncertain, especially considering that IOM began trading this month on the sedate NYSE exchange, far removed from the mayhem and volatility of the wild & woolly NASDAQ. Meanwhile, quite oblivious to anything that might be worth noting beyond its own concerns, the dickering and bickering in our famous Iomega Folder goes on and on and on... 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 IOM Today window and try again.
1++ BlckMarlin, posting as BigWitts, explains why he expects no more big
announcements from Comdex. And now, the Best of the Board...Started 3 am ET 11/21/96.
1++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Comdex Date: 96-11-21 10:37:06 EST From: BigWitts
Don't expect any more announcements out of Comdex after today. Most buyers for large companies and company execs head home Thurs nite or Fri morn. Important announcements are usually made by mid-week, to give time for buyers to stop by the booth. Buyers interested in a new product usually stop by to set up an appointment after the convention.
Just because earthshaking announcements do not come out of a convention does not mean that business is not being taken care of. A convention is where introductions and viewings of new products takes place. It's the followup meetings where programs come together.
Based upon what I saw at Comdex on the first day of the show....I believe we can look forward to considerable activity in the future. The entire second level was very busy with buyers and IOM sales reps/execs taking care of business. It was more activity than I saw at any other booth.....period.
Please don't fret if your *promised* news wasn't released. I don't know who promised what to who. News is just that....NEWS. If everybody knows about it ahead of time....it's not news. Please feel confident that our company leadership is taking care of business in the most effective way possible. We also benefit from the energetic research, endeavors and input by many stockholders......CGuy, Tim, Huibs, WaveRunner, Tokyo, Ind Sales, MrMensa, Arentz, etc., etc., etc. That's a hell of a support base.....
What's to worry?
Regards
BlckMarlin 2++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: IOMEGA Support HA Date: 96-11-21 13:49:45 EST From: IOMPOOPOO
I would guess that many of the people commenting here can't critique the absolute technical merits of the products offered by the aforementioned company. However, we do all have a little experience as consumers.
I would say that, as a sales and marketing professional in the electronics industry, they have the worst customer support operation I have ever runs across. You can't get to any live human being at "my stuff". The web site is a joke. It seems they are looking to generate sales revenue just for the act of asking for an audience.
So I would guess that the company slogan can also be translated to read to Mr. Customer... GET STUFFED.
If they were ever to learn that maybe the real money is in the consumables I wonder what would happen.
Well time to place my market order for put options. At least then I will be able to retire on them. 3++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: MF's too quiet Date: 96-11-21 16:39:42 EST From: MF CapnWil
<<<<From: Wjfay
The MF's have been too quiet for comfort, especially in light of insider selling.>>>
I can only speak for this MF, and the reason I haven't posted is that I haven't had anything to say that I felt would add to the discussions going on. I'm still here and reading with interest. (Sure wish I had taken that speed reading class.)
Since many of us MF's are amateur investors with as little information and knowledge as the next person, I wouldn't use the MF presence or absence as a measure of anything important in this stock.
As far as the comments by MF's and others on the insider selling question, my feeling is the subject has been covered very well by many people here. MF Jeanie has done a lot of work on that question. I'm personally not at all concerned by the insider selling at IOM due to all of the information that is available to us on what the company is doing.
Insider selling is certainly something to signal an alert. And the alert was sounded; the reasoning was discussed, and I cannot see anything in the future that would seem to point to declining fundamentals. The way I see it is the people at IOM are taking some money while they can and are going to increase their lifestyle.
(MY neighbor is a principal at PeopleSoft, and he and his fellow officers did the same thing). For 2 years, the hammers started pounding at 7am while they were upgrading their home, to the tune of about 800K, plus a new Lexus and a long vacation. He probably had to sell about 2mil in stock to do that. That's in addition to the fact that they paid close to 1mil for the house before they gutted it.
Sales at IOM appear to be up very well this quarter and the inventory is there; advertising is strong, and indications that I see point to a healthy increase in the Jaz sales. All of this, IMO, may cause one or more analysts to increase the 4q earnings in Dec. Perhaps that would lead to an increase in the 97 earnings est's.
The company has stated that the reason they introduced the n hand this early is so that manufacturers could develop products that would use the new drive and disk. That makes more sense to me than waiting until 3q 97 when the drive is ready to go to market and find there is no place to stick the new Zip. Therefore, I would look for an increase in 4q 97 revenues due to increased sales of the Zip drives in response to the need created by the n hand, as well as the sales of n hand products.
Also, I don't believe the analysts 97 estimates, at the present time, reflect any of the revenue that will come from the lap tops that will begin shipping in 1q 97. Since the Jaz sales have been far greater than anyone has anticipated, I am certain that an increase in revenues due to the Jaz popularity has not been included in the 97 estimates.
Early in 95 Chiros estimated that Iomega would earn $1bil in 96. He was a little low. They'll do more than $1 bil.
Later he estimated the earnings to be $1.5 bil. I think he'll be close. We'll see in Feb.
Bill 4++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Chasm not crossed? Date: 96-11-21 16:43:14 EST From: Tradetoliv
In the past myself and another poster have mentioned the " Crossing the Chasm" book which talks about how many high tech products fail to make it across the chasm from neat early adopter phase to mass market acceptance and use. I am still long IOM but increasingly worried that the average consumer household does not currently: - Know who IOM or a Zip is - Have a real need for a Zip, ( i.e. I have been to see about 10 family friends and they use their P.C.'s for e mail, a bit of AOL/WEb surfing , a few CdRom games that the kids like , and some light letter writing word processing).This is not power usage , nor do I wonder if the masses who buy a P.C. for home use will ever gravitate to enough power usage to really need a Zip. IOM 's recent market action seems to say that many wonder if they can cross the chasm? What do other people see happening in their neighborhoods with how home P.C's are used by non-techie families?
Tradetoliv 5++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: IOM at comdex Date: 96-11-21 19:22:08 EST From: TMoran6
for what it's worth, i had a call this afternoon from the rather jaded computer editor of the paper i work for, and his opening words to me were: "Buy more Iomega!" seems even he was impressed with IOM's presence at this gigantic show. what he really found amazing was the number of people in and around the IOM booth--"and they only give away that yellow bag and a stupid button." (being the good journalist that he is, he's always on the lookout for cool giveaways, and he knows that crowds surround the booths that give away good stuff whether the showgoers care about the products or not.)
oh, and n-hand was there, he said, but it was sort of off to the side and not getting great attention, but he said it was interesting.
soooo, what's the point: well, seems to me that this kind of report--that IOM's booth is one of the hottest on the floor of a show like Comdex--can only be a bullish sign. long-term, short-term, who knows. but these dopes who keep saying that IOM's dead in the water and it's time to sell and watch the competition and blah blah are only fear-mongering attention seekers. we'd all love to see those huge pops we were used to, but i don't think that's in the cards any time soon, if ever again. but, while the n-hand announcement was new for comdex, i think that the fact that we have invested in a company the booth-traffic of which impresses an implacable trade reporter is 'nuff said for the future of IOM. i'm holding.
tim moran 6++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Real Competition for IOM? Date: 96-11-21 19:33:51 EST From: MF ETurkey
<<<I have spoken to several people who attended COMDEX and saw the Swan/Mitsumi drive. They said that it is no longer vaporware, is rather impressive in its performance and was well received by the press. Any Comments? >>>
Much of the commentary around here with respect to the Swan drive is that even if it makes it to market, and even if it is everything Eden Kim says it is, that it may nevertheless be too late to market. By the time they could sell in mass quantities, six months from now being optimistic, the Zip drive would have a lead of many millions of drives.
At some point the question will not be "Is it backward compatible to the floppy?", but rather, "Is it backward compatible to the Zip?"
Swan is a competitive force, but the Zip is now in almost every major computer brand in some way, even if it is limited.
When I was at PC Expo back in June, I was asking about the Zip laptop and the possibility of the company (I think it was the NEC booth) offering a choice of super-floppy drives to the consumer, and the response was "no way". They will pick one and run with it, and were not intending to make multiple choices available.
I would presume the same logic would apply to the desktop computers.
Eric 7++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Massive Shorting Date: 96-11-21 19:57:31 EST From: STOCKGIRL
Subj: Massive Shorting Date: 96-11-21 00:49:15 EST From: Cynicalguy
>>>The desks I follow for info on shorting and covering of Iomega shares have been shorting more stock than ever today and yesterday.<<<
Cynical, you are under the confused impression that the higher the short interest is, the better it is for the stock. Yes, the simple notion is the more shares shorted, the more shares that have to be bought back, and the stock runs to the moon. Obviously it's not that simple. In fact, the WSJ once had a study stating the opposite, that the most heavily shorted stocks showed negative average annual returns. Of course IOM, AOL, PRST, NSCP, and the rest of heavily shorted high flyers from last Spring put a skew in this figure. However, last Spring must be dismissed. For the techs it was a mania, a frenzy, a buying and short covering freak show that had never happened before and may not happen again. IOM would only be up 4 pts on the day and people would actually be disappointed. Although the mania market is over, the bull market continues and the heavily shorted stocks remain stagnant at best. What happens is the constant daily selling pressure deters the stock from breakouts and creates an ugly looking chart unappealing to investors. Add this to a stock that goes down when they beat their earnings estimate and some massive insider selling, and you have a recipe for what continues to be an outstanding short. So its onward and downward, still looking at 14-16. 8++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Real Competition for IOM? Date: 96-11-21 22:41:20 EST From: Qw1212
Competition= BETAMAX videotape format Iomega=VHS videotape format A study into a possible scenario for the future of this company.*
I sold Pets & c-64's at a local T.V. retailer when I was in school. The best VCR in the place was a Beta machine from SONY. Far superior to the lowly VHS tape format. When Christmas came and the Jones' from town came to buy a VCR, the guys would show them the obvious advantage of the BETA machine. The customer would smile and agree and then pay cash for the VHS machine. WHY? Reasons why joe consumer picked VHS & killed beta:
1.) VHS had fabulous consumer awareness 2.) More movies seemed to be available on VHS (Rental) 3.) Even though Beta had far superior picture quality, no one wanted to pay a "little extra" to Sony. IOMEGA seems to be generating this same type of scenario. Competition is present and possibly superior.
When more competition came out for VHS such as 8mm, what did we see then? VHS-C..... the one you needed the full size VHS caddie to play the mini tape. (KE referenced this analogy on CNBC when discussing how N Hand will be Zip compatible with the use of a caddie.) VHS & VHS-C can't hold a candle to 8mm or whatever, but it is the standard, and has been for the last fifteen years. Enough of my babble.
Doug Anderson, C.F.O. THE REALLY BIG CORPORATION OF AMERICA
*I apologize if anyone has posted this VHS-BETA analogy in the past, I didn't have enough time to complete a bibliography. 9++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Real Competition for IOM? Date: 96-11-21 22:58:05 EST From: PKeeler
>>>and was well received by the press. Any Comments? <<<
Was it well received by any customers? Has to be in a store first doesn't it.
Before a product should be put on the same playing field as the Zip, try comparing it to the EZ-135 first (the Zips only competition, ever). Explain to me how the Swan/Mitsumi or LS-120 is superior to the EZ-135. If you can accomplish that, which I don't see how, then you can maybe compare it to the Zip.
Demonstrations at trade shows are easy. Getting consumers to buy is the trick though :)
PKeeler Patrick Keeler
P.S. Lehigh over Lafayette this Saturday! Most played college football rivalry in the World. 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Soooooo Sad Date: 96-11-22 00:55:15 EST From: Waverunner
I was lucky enough to find this board when it was first created. I benefited greatly from the early contributors. I would name names, but I don't want to offend anyone by not mentioning everyone that has contributed in a positive way. Let me just say, if I wanted to post under another screen name, it would be Skepticalguy. I didn't blindly throw money into Iomega and get lucky with the increase in price. I recognized a need, and discovered a company that had perfect timing with products that satisfies that need with anyone that owns a computer. Iomega owns the removable storage market.
I have consciously avoided trying to "hype" Iomega. I've just stayed closely in touch with the market for Iomega products and been watching the progress that Iomega has made in selling their products. Actions speak louder than words. Yet somehow all the negativism towards Iomega has many convinced that Iomega is a poor investment. Well guess what. Two years from now the people that are wrong will be long gone. Diomega and QW, two of the most memorable of the professional manipulators aren't here to take any "heat" from Fools that may have sold their investment last fall or winter because of the doubt they were able to create in the minds of investors. The efforts to discredit Iomega have become more numerous. The facts remain the same. I don't know what the stock price should be. It's a matter of supply and demand. Market leaders in any growing industry are a good investment. And Iomega isn't just a market leader, they dominate.
Use your own head and check for yourself. Go to the store. Read the Circuit City gift guide in USA Today. Look for the competition....I know, but keep looking. Before there is ANY, Iomega will have 10 million Zip drives sold. It's sooooo obvious. Yet persuasive arguments are being used that the sky is black. Yeh, I think the professionals are still working the market trying to shake the shares loose. Insiders see what's going on too, and IMHO feel it may take some time for the stock to trade at a price relative to their performance.
Lately the baby Bells have started claiming Internet traffic overload. Don't be naive enough to think that you will be able to pay 19.95 a month to America Online, make a five cent local untimed call, and be able to be connected to the Net all day for no additional charge forever. PC Direct charges by MB download amount. Someway you will be charged for the amount of bandwidth you use. Pay attention to those announcements that were made, first by McAffee about the virus checking capability for Iomega Zip and Jaz drives and downloads. They didn't even name other products of companies. The latest announcements from the software companies that have products to download Web sites. Set up to work with Zip drives. Who will save this "stuff"? When your paying for it everyone will. Might not save it forever, but you'll save it long enough to view offline. Pay attention to things you may be real naive about regarding erotic pictures. And digital cameras. I don't think you'll see ads in Penthouse from Iomega regarding the usability of Zips for kinky pictures, but again, it's a huge market. Polaroid and the video camera manufacturers know all about this.
I don't care that the sentiment towards IOM stock is negative. The truth of Iomega's success will come with time. And the longer the street takes to recognize the success, the more credibility they lose.
Don't be deceived, Dave
PS. Is the deal with DreamWorks and Jaz the Steven Spielberg DreamWorks? PPS. I COULD have invested in McDonald's. I helped build their headquarters in Oakbrook,Il in the early 70's. I COULD have invested in Microsoft much sooner, when I first saw the point and click software for the masses. I SHOULD have invested in Intel when they began to dominate the market. I am invested in Iomega. And I will have no regrets regardless of how things work out. Nothing ventured, nothing gained. 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Insiders, Swan, GODZILLA Date: 96-11-22 02:38:41 EST From: Ken1Marcus
I expect more insider selling between now and December 15. They have been cooped up for such a long time, since the first secondary was proposed. Now they've seen a few of their fellow insiders sell, it's easy to go along with the crowd. I don't say this to scare anybody. As I've said previously, insider selling is not a good indicator. Just look a those insiders who sold in the 14's. Just look at those insiders who sold 1+ years ago in the very low single digits.
I agree with Waverunner, the long term prospects are "sooo obvious".
Two points: 1. Swan: Why hasn't Swan let us know the external at retail price, not just the price for the internal in "OEM Quantities" whatever that means. Maybe because it would be more expensive than the zip external will be ($99 if I recall); maybe because no-one would want an external swan - but then if there are no externals, how will they generate demand for the internals? Maybe they forgot to ask the consumer, Oh well, that will be their first and last lesson in the high capacity floppy skirmish.
And, has Swan considered the wear on the regular floppies from spinning them so fast to get the high transfer rates that they spout? Or, is the high transfer rate they cite for the regular 1.44 meg floppies just a result of the expensive 512 kb buffer they use. ie. all smoke and mirrors?
2. 1997 Growth Look at 1997, what do you see? A. New products coming out like the n.hand; this means continued eps growth and with the licensing they plan it also means higher net margins. B. Increased sales due to more OEMs for existing and new products (laptop zip). We already know about NEC laptops. We have also heard Dell, Toshiba, and Apple are done deals. Just very good rumors so far. C. Decreased costs due to normal economies of scale, and of course the Dream Team large scale chip integration. Decreased costs mean either higher margins, or lower prices to consumers which translates into a magnificently high barrier to entry. IMHO any future competitors who try to go head to head with the zip will get the same GODZILLA treatment that Syquest got.
Ken
End Report. Posts covered through 3 am ET 11/22/96. _______________________________
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