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Friday, March 13, 1998 Thursday, Iomega closed at $8 1/2, up $1/4 (+3.03%). TODAY'S RECAP: On another sleepy day for IOM (the stock), the never ending discussion of Iomega (the company) focused on jokes about asteroids and a new "pocket-sized" Zip product from Iomega partner Addonics Technology. Readers of the Iomega board became aware of this item months ago, but the news didn't hit c|net until Wednesday. Still, the mention of the pending product was enough to prod some new consideration of it, if only because there was little else to do. Little to do, yes, but restless souls are never idle. Below you'll find find some of the usual flashes of insight that occur when bright minds spark against each other. And check out the c|net story at: http://www.news.com/News/Item/0,4,19966,00.html?latest 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++ ~LarryChief~ notes an asteroid speeding toward Earth.
Recap written and posts compiled by TMF
Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 3/11/98. 1+++++++++++++++++++++++++++++
Subject: Asteroid.... Just heard the report on MS-NBC that the NYTimes will report tomorrow the story of an asteroid which will pass within 30K miles of the earth in about 30 years, but that the orbit will not be known accurately until about 2003. Any small change in the present calculations could have the asteroid impacting the earth in 30 years. Darn...now we can expect a further drop in IOM... :-(. This may be the ultimate "Zip-Killer".... Larry ;-) 2+++++++++++++++++++++++++++++
Subject: Re: Asteroid.... I'm making a note to myself to check that double indemnity clause awfully close in 2028. :) What rotten @#% luck it would be to get pasted by an asteroid... with my recent luck, it'll hit in the Pacific Ocean and sweep my sorry butt into Nevada on the tidal surge... hopefully my clik! enabled video cam will record the thrashing for America's Funniest 3+++++++++++++++++++++++++++++
Subject: Re: Asteroid.... <<Just heard the report on MS-NBC that the NYTimes will report tomorrow the story of an asteroid which will pass within 30K miles of the earth in about 30 years, but that the orbit will not be known accurately until about 2003. Any small change in the present calculations could have the asteroid impacting the earth in 30 years.>> ..what's truly sad about this is NOT the fact that the thing will impact the earths surface, causing a dust cloud so immense that the sun is blotted out of the sky for years...causing such detriment to the plankton levels, and completely disrupting the food chain, that massive starvation and death becomes imminent...the horrible climatic changes destroy what's left over, leaving a barren, lifeless earth.. ..no, that's not what's sad.. ..what's sad, is that in 2028, IOM will still be at 8.. :) huibs.. http://www.workbook.com/portfolios/huibregtse/ http://www.workbook.com/portfolios/gang/ (my better half) 4+++++++++++++++++++++++++++++
Subject: Re: Ultrasmall Iomega drive KENIH-->> Patrick, no one has mentioned whether or not the "pocketZip" is an Iomega endorsed product or a knockoff. If Iomega doesn't have anything to do with it, then I assume this becomes another litigation issue. If it is produced in collaboration with Iomega, then do we know what Iomega's role vs Addonics' role in the product is?<< I spoke with an Addonics' rep several months ago (800-787-8580) when I first saw this drive written up in a laptop magazine. I was told that Addonics was working closely with Iomega to produce the drive, and that the basic core Zip mechanism was being purchased by Addonics directly from Iomega. Therefore, it is an Iomega sanctioned product. In general appearance the drive somewhat resembles the Avatar Shark. It is very portable and it did not look much larger than the Zip disk it was pictured with. I was also told that enthusiasm was strong for the product, and that Addonics had very high hopes for its success. I believe it will be a real "shark-killer". ;-) If I remember correctly, I also believe that the suggested price was to be $250, but I am not certain if that was firm. Ever since the Shark was produced, I had been bitching privately that Iomega should produce a Zip drive in a similar portable design. It would have immediately offered the laptop computer user an option while Iomega refined its internal version. I have no doubt the Addonics' drive will be very popular, and dominate the niche that was previously being filled by the Shark despite its incompatibility with the Zip. No matter, I am glad it has finally arrived. Dottie 5+++++++++++++++++++++++++++++
Subject: Re: Sony is not vaporware >>my brother in law works for Sony. He told me their 200MB drive is coming soon and so is the advertising...with OEM's their prime target. They are planning a major advertising campaign. Sony wants this market badly and is ready to spend to get it. They know that the whole market will be won or lost with OEM's and that is where they are headed.<< LOL, so have you bought you're mini-disk yet? It wouldn't surprise me to see Sony spend 100 million dollars to target the buyers at Dell, Compaq, NEC, Hewlett Packard, etc. And with all due respect to your brother-in-law, the left hand doesn't know what the right is doing at Sony. Just ask him. LOL. Sony isn't even #1 in Japan. BTW, the latest I have heard is that they plan to show the drive in June. I would expect they would want to have it in their machines in time for PC Expo. But since nobody has seen a fully functioning working model, and since OEM's have six month evaluation cycles, it may be quite a while, like 1999, before a desktop version of this drive becomes available from other OEM's, if ever. A laptop version? Unless they come out of the blocks with a 12.7mm it could be years before they could develop that. Ask Iomega and Imation about slimline drives. It is ironic that a company like Sony would even want to enter the market for "fad" products. They could have saved themselves much trouble if they just consulted with David Rocker first. ROFLMAO. Maybe they did listen to Rocker, when last I saw him on CNBC he said the LS 120 would be Zips demise. So Sony developed an LS 120 killer. Sony is to Zip what Microsoft Network has been to America Online.
"If the thunder don't get you, iomega rider, Dave Waverunner's Home Page 6+++++++++++++++++++++++++++++
Subject: Re: Jaz2/Jaz1 - WSJ Ad Shig2 writes: <<<From observation of Merisel data, I am not surprised if Iomega had some kind of supply problem with the internal Jaz1 model between mid-December thru mid-February.>>> Wasn't there a mention of excess Jaz1 inventory as one of the reasons given for the earnings shortfall? I thought it was posted here that some thought that the announcements of "soon to be shipped" Jaz2 sort of cannibalized the Jaz1 sales, you know, people waiting on Jaz2 held off getting Jaz1. Not sure if the excess was int. or ext. But if there was an inventory glut it sure must be gone now with all the backorders, etc. TMF Keeler writes: <<<However, I thought it hard to believe a product that has been around so long could be forecasted so poorly. I checked with some buddies that are closer to the channel than I am. They seem to support the idea that demand unexpectedly picked up on Jaz 1 internals. >>> That's what I think too, but, who knows, with the extra ads and price cuts, my optimistic side says they may have underestimated demand. They may have forecasted normal growth (or even more considering the ad campaign) but it would be nice if they were too low. My pessimistic side on the other hand thinks that maybe they were lowering Jaz1 forecasts because they thought Jaz2 would be shipping more? Maybe they thought they could squeeze some Jaz1 users to Jaz2? Whatever reasons, it seems there really is a lot of Jaz demand. There also was another full-page ad in the WSJ today for Jaz1. The one with the guy who's house burned down - straightforward and to the point which is good, unlike some of the others. And an FYI to those posters that use the heavy carriage-return: I don't know if this happens to others but if I don't have my full-screen turned on, I skip to the next post and may miss part of the message. If you skip too many lines between paragraphs, you might not know there's more to the post (unless it's from Mark Rogo of course :-) ). Thanks and good luck. 7+++++++++++++++++++++++++++++
Subject: Re: Issue debt, buy the stock BurtskyH starts the thread: <<What would be the benefits and disadvantages to IOM if they: (1) Hired a big investment firm to issue about $200mm (2) Use the $200mm to buy back 2.5mm shares of stock at this cheap price. Show support and confidence in the co, and also probably get a good return (3) Issued the debt while interest rates are nice & low now (4) Got the big investment firm to pickup coverage on IOM since they were doing their investment banking with them.>> TMF Turk answers: <<...based on the fact that the company is growing at a rate far in excess of whatever interest they may be paying. ...despite my being of limited knowledge here and giving such a simplistic response...>> ET, you nailed it. IOM could buy the stock back at maybe 8% interest and reissue it sometime in the future at a much higher price. Burt makes a great point about the politics in the financial world. Iomega has very little debt right now... anyone know their credit rating? Assuming Iomega debt is investment grade (Baa or better,) most investment banks would want to underwrite the debt. If they underwrite it, they have "an opinion" about IOM that is good (let's have conflict of interest work for us.. no?) Also, investment grade bonds are a great vehicle for many mutual funds. Perhaps they would become comfortable with IOM via Iomega bonds. There is a theory that says you can estimate a firms health by the way it raises capital. If a firm is issuing stock, which happens to be the most expensive way to raise capital, it is not doing well. Can anyone think of a firm where this might be true? ;-) On the other hand, the issuance of debt is seen as beneficial to a firm. The basis of this theory is that if you knew your investment would earn a huge return, would you want to borrow money and take the profit for yourself, or would you rather have all your friends get their mitts on your cash. Now change the scenario to a situation where you could lose a lot of money. Get it? Would Iomega issuing debt to buy back stock be good right now? Let's do a parametric study. A stock buyback plan would boost the stock and investor confidence... EPS would go up slightly. On the other hand, more debt might shave a fraction of a penny off the EPS. Yeesh. Wallstreet = Myopic. One last point. If Iomega did issue long term debt, it should be matched to "life" of whatever it buys with that debt. It would be nice if, when Iomega expands its Clik! manufacturing plants, they issue debt to finance it. Debt financing of growth is cheaper than using retained earnings (...a long post in itself.) Btw, I think that Iomega is underleveraged... ...I also thought they didn't advertise enough, and look what happened when my wish came true... wussies! :-P Yo! RB61 your turn... War- _______________________________________
End Report. Posts covered through 9:00pm ET 3/12/98.
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