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Friday, November 14, 1997 Thursday, Iomega closed at $29, up $3/8 (+1.31%). TODAY'S RECAP: Some posters yesterday dealt with "older" news items from Iomega -- the 2-for-1 stock split and SyQuest's announced competition, SparQ. But the noontime press conference dominated the board, with a few Fools reporting from The Rainbow Room (or thereabouts) on the details. Some simply provided what information they could, but a few others supplemented information with personal analysis of the pros and cons of Iomega's new Clik! drive (formerly n*hand and not to be in wide release until later in 1998). 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++ HYPEMENOT cautions against misinformation regarding IOM's impending stock
split.
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 9:01pm ET 11/12/97. 1+++++++++++++++++++++++++++
Subject: Re: Stock Split Reading all these posts on the forthcoming 2 for 1 split, its hard not to be impressed with the amount of misinformation that's been voiced about this. First of all, in terms of whatever valuation pareameters various participants like to employ, it is correct to say the split has no impact. Whether IOM is a $14 stock with 275 million shares, or as is presently the case, a $28 stock with 137 million shares, has no effect at all on the P/E ratio, the PEG, YPEG, Mkt.Cap/revenues, or any other standard value parameter. However, in terms of market dynamics and investor psychology there is a positive impact. For that reason I think, as an isolated event, it should be considered a modest plus. Certainly, splits have traditionally been interpreted as a sign of confidence. While I agree with Ben that the reason cited in the release, to make more shares available for option grants, is both unusual (maybe even unique) and perhaps dilutes the traditional interpretation, no one with any sense is going to look at this and conclude that the Board would approve this change, unless it felt confident about the Company's outlook. On the mechanical side, there is probably some basis for thinking that (within reason) a lower dollar price is helpful in attracting new investors, particularly in stocks where individual ownership is more substantial than institutional ownership (clearly the case with IOM). Having said this, everyone should keep in mind, that the positive effect of the split is likely to be brief/transitory. Over any length of time, as always, it is the fundamentals that will be the real determinant of the IOM's performance. 2+++++++++++++++++++++++++++
Subject: Thursday's Wall St. Journal Thursday's Wall Street Journal has a write-up comparing Zip to Sparq Page B1, by Walter Mossberg <<Iomega's archrival, SyQuest Technology, had failed to come up with a popular Zip-killer, but now it has a product that looks like it might do the trick.>> Talking about Zip Plus: <<The $199 price (for Sparq) is a bit higher than the basic Zip drive, but exactly the same as the new Zip Plus drive. That's a slightly fancier model Iomega is introducing that has a few minor new features such as an on/off switch, but no added capacity.>> Comparing pricing of Zip to Sparq: Backing up three gigabytes of data with a Sparq drive takes just three disks costing $99, versus 30 Zip disks costing $450.>> Conclusions: <<In my tests, I eventually got one (Sparq) to perform as advertised.>> <<But there were lots of hassles along the way. For that reason, I advise anybody who's not a techie to wait a few months before buying a Sparq drive.>> 3+++++++++++++++++++++++++++
Subject: update Some of this is posted already and it came faster then I could write is so it ain't perfect yet. Clik! is an external drive by IOM that will sell for $200 and use 40MB disks @ $10 OEM's will build a drive into devices, the Clik! drive is IOM's way of allowing easy transfer of disks to a PC. n.hand (now named Clik!) will come out using 40MB disks, not 20MB. Partners are HWP, EK, Polaroid (what's their stock symbol?) MOT will make silicon for Clik! Clik! is endorsed by MSFT Other partners are Hitachi, Mitsibushi, citizen, (I forget who else) More as it comes.... 4+++++++++++++++++++++++++++
Subject: Clik/Rainbow Room I just got back from the Rainbow Room. What a show. Yes, the stock is down because the news came out in the wrong order, but so what. This is buying opportunity if I have ever seen it given what I just witnessed!! The OEM partners so far are Kodak, Palaroid, Hitachi and HP. The Click, (no c at the end) is awesome. $9.95 for 40 megs on a matchbook sized disk. Someone took a picture with the Hitachi camera with a CLIK built in of the Palaroid, Hitachi and HP guys sitting at the press conference. He then showed us the picture minutes later on screen. And then printed one out that rivaled 35mm. The uses are endless. HP will be making a camera and printer to use Clik that won't need a computer. Take the pictures, take the CLIK and put it in the printer, and print your pictures. So cool. Microsoft heavily endorses Clik!!! They are very excited about using it with their Windows CE.
Subject: Re: Clik/Rainbow Room Expect products with Clik to ship for the summer of 98. Iomega to use same formula for Clik that it did with Zip. And it will turn on the same marketing machine to make it work. And it will. Other partners will be: CNF, Zoran, Motorolla, TI. They all spoke on video about how great CLIK will be. Mitsubishi and Citizen will be manufacturing partners on CLIK. And they will be able to make enhancements too. Fuji is a very close partner on CLIK just like Zip. INTEL plans to get flash memory to $1 per megabyte by 2000 in a best case scenario. IOMEGA HAS IT DOWN TO 25 CENTS A MEG NOW WITH CLICK!!!!!! I sat next to an analyst for a big Fund who I happened to work out with. The institutional is just waking up to Iomega and his fund loves it. KIM STATED that many price and performance targets had to be hit to make a digital camera and storage work. CLIK DOES THAT. He stated that one would need at least 25 high quality photos per disk to be worthwhile. CLIK gives you 40 of the highest quality. It also hits the crucial price point of under 10 dollars.
Subject: Re: Clik/Rainbow Room The Clik drive is very cool. Very small, fits in a stand like a cell phone charger. (by design, to look like something people are used to seeing on their desks). Will have inferred ability to send info to other devices. So cool. We saw FULL MOTION video shot on an HITACHI camera saved to a CLIK disk. These things actually work. We got to see the film of some dink skating this morning at Rockefeller Center. The video was played back on a click disk that it was taken on. THE THINGS ACTUALLY WORK!!!!!! Question was asked about if CLIK would slow down picture taking process. Kim said it would actually speed it up. No film to move. hehe Non CLIK Iomega news. Jaz 2 in pilot build now. Will have mass shipments in time for the Christmas buying season. MCI and partners should be building 150,000 Zips a month in January, with ramp to increase from there to who knows how many. But ramp will be very fast. Syquest rumored to have defect in all SYJET and SPARQ disks made to date. Good source. Bill Bronsteen 5++++++++++++++++++++++++++
Subject: News Conference I showed up at the Rainbow Room, an uninvited guest, and was able to watch the conf via closed circuit TV from a back room set up in case of gate crashers such as myself. A few thoughts. . . The clik! disk (yes, there is an exclamation point in there as in Yahoo!) is a complete re-working of the n-hand that they had previously shown. Edwards called it "dramatically different". It has more storage, and maybe more importantly, uses less power. There was no annoucment about compatibility with the Zip or a caddy system. The disk is a sharp looking 2" x2" and quite thin. Members of the press were able to take disks with them, and I have obtained one for myself (thanks Bob!). I have the dimensions and specs for anyone who might want them. It is good to see a working model of the drive, as shown via a Hitachi camera that had taken both stills and video. The Hitachi spokesman said the disks can hold 3 minutes of MPEG video on them. Edwards said it could hold 40 high resolution stills. By partnering with Kodak and HP, iomega has the biggest names in both film and printers with them, a fact that other people in their respective industries can not ignore. Given that there is no working product for sale, and this is just a technology announcement for the moment, it is great to see them on board. It makes it that much more difficult for competing devices (of which I am sure there will be some). Of interest in the discussion was the idea that printer companies would OEM the drive directly into their printers, in effect, bypassing the computer as we know it. The idea would be to take pictures with a clik enabled camera and plug the disk right into a printer. Of course, this means some redesign of the printer to give it some smarts, but I'll leave it to our resident techies to talk about that part. Curiously, the company will be coming out with an external Clik drive first, which seems a bit odd to me since there will be no disks to read. I would think they would try very hard for a contemporanous product launch, hopefully in time for Christmas, 1998. (Yeah, Edwards did say mid-1998, but hey, you'd be crazy to think everything would go smoothly--I'm hopeful for something by Christmas.) The first use of the drives/disks would seem to be with the transference of photos from existing digi cameras to the clik external and then the use of multiple disks for storage. A bit clumsy perhaps, but you have to start somewhere. Transference of data would take place one of three ways. First, via the serial port. Second, via infrared. Third, via a docking station, which I understand may be included with the sale of the external drive. Power would be provided by AA batteries, and they hope that a recharging might also take place using the docking station. The ultimate price target is the same as Zip...start at $200 and get it under $100. This technology has a long way to go still before implementation, but today's conference should generate enthusiasm as to what might be or could be, a very substantial product. Eric Turkewitz _______________________________ End Report. Posts covered through 9:00pm ET 11/13/97. _______________________________
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