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Wednesday, October 08, 1997 Tuesday, Iomega closed at $22 15/16, down $2 1/4 (-8.93%). TODAY'S RECAP: Well, the Iomega board was hopping yesterday, as the stock priced tumbled over $2 on no news. Plenty of speculation abounded -- from takeover rumors to competitor price drops to poor earnings fear. In addition to commiserating with fellow investors, some posters shared information that may or may not have been useful for others. The role of a slumping Malaysian economy was debated, as was the rumored price cut in SyQuest products and a new marketing campaign, but most posters were left wondering why what happened happened. Enjoy! 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++ TMF Karen posts (and questions) some information from FirstCall.
Recap written by TMF Weekly; posts
compiled by TMF Weekly. As always, the following posts represent the thoughts of our contributors, not those of The Motley Fool.
And now, the Best of the Board...Started 10:31pm ET 10/6/97. 1+++++++++++++++++++++++++++
Subject: Firstcall Has anyone checked Firstcall lately? They are showing a 5 year growth rate for IOM at 15%. This is the first time a five year growth rate showed on Firstcall (that I've noticed). If this is a misprint, then we, as investors, need to get this changed. If not, maybe it's a reason for the sell off. I am going to contact IOM investor relations and ask if they know about this. <<LONG TERM GROWTH RATES Current Mean 1.2 Next 5 yrs - Median 15% Number of Brokers 5 Number of Brokers 1 Industry Recommendation: 2.1 Industry Growth Rate: 19%>> 2+++++++++++++++++++++++++++
Subject: Re: Last 5 Minutes About a week ago, Barkley Bank (the largest single holder of IOM) reported that they were selling their Investment Banking interests. If they or who they were selling to decided that they should sell their shares in all of their investments, this could account for a significant selling pressure, which steamrolled. It probably had no fundamental negative reason to sell other than devesting in general. I doubt that their is any underlying ominous reason for the selling, and when the earnings report is positive for this quarter, and very positive for the 4 th quarter, those that have been shaken out will curse themselves again. 3+++++++++++++++++++++++++++
Subject: The decline in IOM For those of you wrestling with the possible reasons for the recent sharp decline in IOM, it might be worth the time to (re)read a message I posted nearly a month ago regarding the currency turmoil in Malaysia (in response to a bullish post about this subject by Bobacco). It just so happens that IOM capped its last upside run on 9/8, and has been in a steady decline since 9/19. For those who dismiss the importance of what is happening in the Far East, I have seen at least two analysts experienced in such matters describe the situation (on CNBC) as more worrisome than the last crisis in Mexico, particularly because the U.S. had the wherewithal and made the resolve to assist Mexico, whereas Japan (our counterpart in that region of the world) may have neither the means or the determination to do the same. Could it be that the turmoil in Malaysia -- the center of IO's manufacturing activities -- is actually worrying thoughtful investors? Or is this just another transparent attempt by HYPEMENOT to "grossly misrepresent" reality in line with my alleged agenda of creating "doubt and confusion". Guess each of you will just have to decide that for yourself!
Subject: Re: Malaysia/Mobius Interview << Two possbilities come to mind, Interest rates will rise in IOM's key Manufacturing Zone. Labour costs in dollarterms will fall adding to the bottom line. I think it has a positive spin and a bonus for shareholders. Borrowing costs will be ofset by cheaper labour costs >> BOBACCO, I don't have a valid or dependable answer as to how the currency/stock market turmoil in Malysia might impact Iomega, but I think your response above is far too simplistic, because it only focuses on a couple of potential shortterm possibilities. While it is true that the immediate impact of a decline in Malaysia's currency vs. the Dollar, would probably be to reduce IO's costs in dollar terms, what you are not considering is that a substantial decline in the value of a currency (particularly where the policy of the Government has clearly been to promote stability vs the Dollar) is usually indicative of underlying economic problems and/or dislocations (as in accelerating inflation, for example). I know very little about Malaysia, but the fact that their stock market is down 40% this year, is a pretty good indicator that their may be serious problems behind the currency weakness. Again, I don't know how this plays out over time, but I would not assume (as you have) that what is currently happening in Malaysia is a "bonus" for IOM shareholders (with, according to you, higher borrowing costs being offset by cheaper labor costs). It could turn out to be a plus but, if the decline in Malaysia's currency is reflective of significant underlying economic problems, the end result for Iomega (as well as other Companies operating there) could be negative. 4+++++++++++++++++++++++++++
Subject: Reuters story on SYQT http://biz.yahoo.com/finance/97/10/07/iom_syqt_1.html 5+++++++++++++++++++++++++++
Subject: Re: The decline in IOM I don't follow the logic of "Malaysia Problems" being the culprit. Currency related problems in Malaysia have no impact on a company that manufactures there; a company would only have problems if it was attempting to sell into Malaysia. If anything, there might be a slight positive to companies producing in Malaysia because the wages you pay are converted from US Dollars to the local currency - which is devalued which means it takes less of your dollars to make the payroll. _______________________________ End Report. Posts covered through 9:00pm ET 10/7/97. _______________________________
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