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Wednesday, February 04, 1998 Tuesday, Iomega closed at $9 7/8, up $3/16 (+1.94%). TODAY'S RECAP: After a fourth consecutive up day for Iomega stock, most posters apparently took the day off from the board; those who didn't discussed writeable CD drives, TV advertising, sales and EPS numbers and volume trading. And, as the board has suffered under the strain of multiposting recently, some posters expressed opinions on the company and the board. 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++ PaulL73 questions the impact of writeable CDs on Zip sales and more.
Recap written and posts compiled by TMF Weekly. _______________________________ And nw, the Best of the Board...Started 9:00pm ET 2/2/98. 1+++++++++++++++++++++++++++
Subject: go figure anybody have an actual figure on how many Cd write once drives have been sold? Is it around 12 or 13 million? do those CDs hold up if they got tossed the length of a football field? are their makers working on a really small CD that can fit on a PDA? still waiting data on that ``half as many'' oem figure so confidently offered, especially in light of recent quarter's increase in volume Zip sales and percentage of sales from OEMs. anyone heard of any of the ``big boys'' -- WDC, Seagate, Quantum --finally taking that leap into portable storage now that Iomega's put a stranglehold on most of the market share of a market it essentially created? Anybody got a release date or a price for the Sony HiFidelity backwards disk drive, currently No. 1 with a bullet on the Vaporware Top 10? And speaking of the perennially vaporous, a release date for the Swan? Anyone? ...it's amazing that in the wake of the most disturbing quarterly report yet that the short arguments remain just as loose and tired and hollow as ever... 2+++++++++++++++++++++++++++
Subject: Who's buying ? 100 million shares have traded since the conference call. This is about 35% of the capitalization. This means that there is a large and rapid change in the shareholder constituency occuring. The bids lately have been huge. 300 to 400 thousand share disclosed bids have been common. Larger than I've seen in IOM in years. Of course the offers have been huge as well but this is not unusual for Iomega with shorts always present on the up-tick for size. What does this mean ? Well, I don't know for sure. But from watching the trading and the changes in the bid quotes I think the buying has been concentrated in a small number of institutions. I also think whoever is buying is more sensitive to volume than price. Probably they were waiting on the sidelines for an inevitable break in the stock to take a meaningful sized position on the massive volume sell-off. I think this is very smart money buying. No panic for them. And they're not worried about getting out anytime soon either. I hope this leads to meaningful analyst coverage because the company needs it. We need Goldie telling the story not Kim Edwards. BTW the good news in the conference call far outweighed the bad. Record earnings, sales, gross margins, unit sales, etc. Some very weak hands that held the stock dumped because they didn't understand KE's confused remarks and didn't wait for clarification. Stronger, smarter buyers are entering. And Zip is selling a million plus a month. Making Zip the new standard is all that matters, the rest is noise. 3+++++++++++++++++++++++++++
Subject: Re: Who's buying ? With redistribution of IOM shares taking place on such a massive scale since earnings were released there, of course, have to be some very large buyers. The Worden Bros. "balance of power" indicator (a propriety accumulation/distribution measure) has, however, been negative since Jan. 23. What this means is that, on balance, shares are being sold off in larger blocks than they are being purchased. While there is a lot of "noise" in this indicator--many things to account for such a shift other than ownership moving from strong hands to weaker--it has been reasonably predictive of price over the past two years. I hope what is registering right now is, in fact, noise, but I am afraid that this objective measure of accumulation vs. distribution has to be taken as at least a cautionary indicator. 4+++++++++++++++++++++++++++
Subject: TV ads Well since I asked for a channel check of sorts for the Iomega TV ad campaign I have received many emails and, of course, some of you have posted on this board. Thanks to everyone. At least for now, it seems IOM has purchased time on a bunch of different National Cable networks. CNN, TNT, The Learning Channel, Lifetime, ESPN and ESPN2 were all mentioned. My son saw a half dozen of them on VH1 and MTV while out sick the other day. This is fine but is usually the way smaller players buy TV. After all these cable channels are usually one share stations in most markets. Of course buying a bunch of them could give IOM some cheaper reach and a lot of frequency. I have seen no ads on either of the big four networks since the Superbowl. Has anyone else? Just thinking out loud and still watching. 5+++++++++++++++++++++++++++
Subject: Numbers worth knowing Sales (by quarter, in millions) 1995 40.1 52.6 84.7 148.7 1996 220.0 283.6 310.1 397.1 1997 361.3 400.2 431.7 546.8 Earnings Per Share 1995 -.01 -.01 .01 .04 1996 .04 .06 .05 .08 1997 .09 .10 .11 .14 Phrases to Remember The trend is your friend. What's a parabolic curve? 6+++++++++++++++++++++++++++
Subject: re things in general Since it seems to indicate something it wasn't meant to I'll be amending the tagline to my post just a bit. I meant to convey I'm losng interest in the Io board, not the company, although, in the interests of board disclosure, I will say I am selling off a little here and there as the stock comes back up. The 4q report/plunge was sobering and since I am well out of balance in my portfolio with Iomega --got in in March '95 and had most shares purchased by that summer, so it just soaked up an ever larger slice of the pie on its own -- I'm leveling off the holdings a bit. I should have done this before; it would have been the Foolish thing to do, but I strayed....what can I say? At any rate, I will still be out of balance in the portfolio even after I knock the holding down by a third or so, because I still think Iomega is in very good hands, I still think the competition is weak and I categorically disbelieve the current fascination with ``quality problems'': I think when you sell 12 or 13 million of something you're gonna have some lemons in the bunch, which is what we're hearing about now. I still think they have a virtual lock at the Zip level. I honestly think they have an insurmountable lead and momentum that will be extremely difficult and costly to combat. That's why I'm very cynical about the Sony drive and scornful of some recently returned Iomega board originals and their sudden love affair with everything un-Iomega. Sony's HiFi might even turn out to be better than a Zip drive in all ways, but unless Sony can market it as THE answer and at a price comparable to a Zip drive I just can't see Sony uncornering the market Iomega clearly has cornered. But the margins are dropping there while the real competitive situation is at the Jaz level, where margins NEED to drop. I would really like to see SyQuest finished off. I admire them for hanging in and producing real products (Avatar, too, for the Shark, which has always seemed like a very cool piece of work) but they are a very weak company that gets a disproportionate share of media attention because they ARE the only REAL competitors right now. As long as I'm rambling, I think spending $100 million on a good ad campaign this year -- and what little I could see during the Super Bowl (I was working) looked very good -- makes great sense. Putting the ads on cable channels, which automatically reach a slightly higher income level than broadcast TV for far less out of pocket, is also very smart. I'd reserve some of the ad budget to counter anything Sony might come up with. That's enough, except for an overdue thanks to ClayHagan for his great parsing of the conference call, which was great to see in the middle of the big stupid toga party the board has degenerated into. _______________________________ End Report. Posts covered through 9:45pm ET 2/3/98. _______________________________
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