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August 8, 2000
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Re: Oh, research? What a novel idea...
"IOM may be at a crucial juncture. You can tell, sorta, when the desperation of the bears and the short sellers reaches critical mass. When we see the likes of the older (and obviously Wiser) bears jumping on board again, I almost start to think I can smell the fear..."
I don't think that its fear so much as how can you be bearish about cash. As the IOM stock price continues to fall and the cash and cash equivalents continues to rise, there is less of market value to be concerned about or to short. Zip disk and drive sales may be declining; but probably, they won't fall off a cliff. So absent some new product development or marketing promotion, the company will continue to accumulate cash as it goes forward.
jug9head also said,
"Clik! and Digital Audio - again, many discussions about the future of IOM products in the digital audio realm. This series of discussions might be particularly scary for shorts and bashers as the potential is really quite enormous."
Lets have some truth in advertising here. Iomega's bread and butter product, the Zip drive, is targeted toward PCs. About 120 million PCs get sold every year at an average price of about $800 (the installed base of PCs is probably north of 400 Million). According to [sic] Iomega's own press release. The market for Digital Audio Players (DAPs) is only 2.8 million units this year, growing to 10 million by 2004 with average price falling from $138 this year to $95 in 2001. So lets see, the quite enormous potential comes from:
There has been a lot of discussion about truth and twisting the facts on this board. In truth, the revenue potential of Clik in the Digital Audio Player market is small compared with current Zip revenues and is highly highly speculative given the numbers IOM used in its press release. Some of us would say that you have a better chance of getting pigs to fly than building a self sustaining business in digital audio built on the current embodiment of Clik.
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