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Friday, December 19, 1997 Thursday, Iomega closed at $24, down $2 1/2 (-9.43%). TODAY'S RECAP: The stock suffered a major loss yesterday, and the message board had no shortage of theories as to why. Some posters provided news announcements on the delay of the Jaz2 drive while others blamed a recent Fortune article critical of Iomega. Other posters provided information on Iomega's "strengths" and the news release of the 11 millionth shipped Zip drive. All of these issues clouded the topic of the morning: Nomai. 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++ IraS1 on utility patents, Iomega and Nomai.
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 12/17/97. 1+++++++++++++++++++++++++++
Subject: Re: Legal Stuff << Of course, while Iomega may fail in the patent matter on this in this particular jurisdiction , they may still prevail on the marketing of the disk as "compatible" since Nomai has now agreed it is not 100% compatible. >> As I recall, this legal action was about the "shape" of the Nomai disk. This does not infringe on Iomega patents in Europe as there is no equivalent to the US Design Patent in Europe. All European Patents must contain functional characteristics. The problem (from our perspective as US investors) is that we currently do not know which, if any, of the US utility patents have also issued in Europe. Ultimately, it will be the utility patents which will prevent Nomai from marketing Zip disk clones. Repeated requests to IR for a list of international patents have not been answered. I am in the process of scoping out the cost of doing the search myself. As usual, if I come up with anything, I'll report it here. 2+++++++++++++++++++++++++++
Subject: Re: Fortune <<...I was apalled at the write-up I saw. Mr Schonfeld felt that Iomega had to resort to "a sad attempt to lend sex appeal to the unveiling of its Clik product at Comdex" What Mr Schonfeld is refering to was the Caberet style production Iomega presented for Clik! (which happened to be one of the most popular in the entire exhibit) He did not at all let the reader in on the four to six demonstrations that continually were presented one-on-one with the very knowledgeable staff, or the informational handouts... >> This is the type of backlash I worried about after seeing Iomega's booth. Writers like Mr. Schonfeld would not be able to get past the "Caberet" show to be able to do any in depth analysis of the product because they were dismayed with the way Iomega chose to grab their attention. I still think it was a mistake on Iomega's part to have that type of show. They run a much higher risk of offending people or having people not take them seriously. Particularly, the people who write about the company in trade magazines. I don't recall seeing any other booth at Comdex with dancing girls, so it must not be such a great idea if no one else is doing it. Dancing girls at IBM? Microsoft? HP? uh...no. 3+++++++++++++++++++++++++++
Subject: Fortune and Iomega I was at COMDEX as well and I do remember distinctly that several companies used women clad in sexy attire, dancing, etc.. UMAX had 4 very sexy cheerleaders in very short outfits jumping up and down continuously while 2 talking heads did a sophomoric takeoff of "Bud Bowl". This exhibit replete with snide sexual jokes about Marv Albert and others had no imagination whatsoever and had nothing to do with scanners and computers. XEROX had a Broadway-like dance routine with a number of male and female dancers. While Nick (NSACORAF) and I were walking to the Syquest booth we saw one company (major Japanese manufacturer) who had a woman in a bikini to advertise their product. In fact throughout the day I mentioned to Nick all the women that looked like "showgirls" who had found some daytime work at COMDEX. Although I can completely understand if some people are offended by some of the ways companies sell their message I dont think Iomega approached bad taste, exceeded the standards of the show or was by itself in the use of appealing women to deliver their message. Iomega's show was professionally and cleverly done. Another writer gave Iomega bad marks for the annoying click of the "clik!-ers" they gave out at the exhibit. Iomega is a magnet for attention and commentary and there seems to be alot of writers who want to focus on the little company from Roy, Utah. Although some may not like Iomega the overwhelming opinion of those at the Iomega exhibit seemed to be one of genuine excitement and interest. 4+++++++++++++++++++++++++++
Subject: Jaz2 dellay ROY, Utah--(BUSINESS WIRE)--Dec. 18, 1997--Iomega announced that its new premium performance Jaz 2GB drives and Jaz 2GB disks, scheduled for shipment in the fourth quarter of 1997, are now expected to start shipping in the first quarter of 1998. "The decision not to ship Jaz 2GB this quarter," said Fred Forsyth, president, professional products division at Iomega, "is based on allowing Iomega to conduct further quality testing to assure that Jaz 2GB fully meets our rigorous quality standards before releasing the product for customer shipment." 5+++++++++++++++++++++++++++
Subject: 11 M sold ROY, Utah--(BUSINESS WIRE)--Dec. 18, 1997--Iomega Corporation (NYSE:IOM) today announced that global shipments of its award-winning Zip drive, first introduced in March 1995, have surpassed eleven million units. 6+++++++++++++++++++++++++++
Subject: ..IR.. ..I just got off the phone with IOM IR.. ..I basically wanted to know why Iomega would issue a press release for Jaz II, as it's only being delayed a few weeks..(originally late Q4).. ..was told that most of these types of announcements have occured in conjunction with a Conference Call, or such.. ..as IOM is entering it's quiet period, as I was told, they decided it was prudent to release this, as the next opportunity would have been the January CC.. ..and it's because they haven't finished testing the drives.. 7+++++++++++++++++++++++++++
Subject: put up or shut up This is getting to be a bad habit. Buz is announced for shipment, space is acquired in catalogs and it doesn't ship. Same for RecordIt, which finally began being delivered in mid-December despite the Iomega website claiming it to be available ``now'' in late November and despite its appearance in the same Buz layouts in fall product catalogs. Only ZipPlus purchasers got it any earlier, as far as I know. The laptop Zip is announced, promised for delivery, then the date is pushed back over and over and over. Finally, it's here and very late for the Christmas selling season. Now the Jaz2, which is also garnering catalog space, is back in the shop. I'm all for ``rigorous quality standards'' and, yes, I'm all for getting it right before letting it loose. That isn't the problem. The problem is this company's lack of discipline: It builds expectations too fast and too high for new products. It rarely delivers a new product on time. It prematurely pushes products such as the Buz and RecordIt and the CEO seems not to care much at all when they falter-- because they're``tactical products.'' Tactical shmactical. Make them or don't make them, tactical or not, but don't promise what you can't deliver. Don't announce a ship date UNTIL you've met the ``rigorous quality standards''; when something has to be fixed the lasting impression left is that something is wrong with it, period. And there's nothing ``tactical'' about the Jaz2; I hope there won't be the same blithe dismissal of its stumble to market at the next conference call. There used to be a lot of talk on this board about Iomega not playing the P.R. game enough, not flogging its successes at every opportunity or revealing its every move and every thought instantly so that the investment ``community'' could be informed and impressed. On the contrary, I think Iomega needs to do some serious soul-searching about its whole approach to promotion. This latest gaffe should humble the whole company, from the top down. 8+++++++++++++++++++++++++++
Subject: My thoughts Well, what an unpleasant day! I, along with a lot of other people lost a bundle--on paper. But lots of companies lost today. Lots! The market got hit again, and we did have some not so hearty press releases. But, again, it's paper. And I think that's really what it's all about. Sure, if we had tomorrow's paper yesterday (isn't that a Saturday show?), we could all day trade and make all kinds of profits. But we don't, and we can't. What we do have is: A company that sells all the drives they can make. A company that has grown in 3 years from revenues of $146 Million to $1.6 Billion. A company that has grown its market cap from $50 Million on 3/1/95 to $3.4 Billion today. A company that is consistently reinvesting in its R&D to develop new products and improve existing ones. A company whose flagship product is constantly touted by OEM's as a standard. A company that is developing a new product (Clik!) which has the endorsements of such companies as Hewlett Packard, Microsoft, Kodak, Hitachi, and others. A product that seems to have the potential of revolutionizing the industry just as Zip did. A company which at the close today,has a PE on FY98 estimates of 19.7. (That has to be a record for this stock and company.) While stock drops are never fun, it's times like this where I think of the fundamentals of this company, and remind myself why I own it. _______________________________ End Report. Posts covered through 9:00pm ET 12/18/97. _______________________________
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