That is a very valid point, RR. Once the street falls in love with a stock, it is hard for it to go down. Unless I am mistaken, I think the same situation occured wrt Netscape as soon as it went public, when the street saw it as a banner name in pure internet plays. These stocks trade at about the same (NSCP) or much higher (AOL) market cap than IOM. And of course, when you have no earnings, it is hard to disappoint unless revenue growth drops off significantly.
The same could be said of a lot of internet stocks such as Amazon, At Home, and ofcourse, Yahoo. All these trade at market caps of > 1 billion and no earnings to date. But the street loves these internet brand names, and is willing to give them the benefit of doubt, which, unfortunately it does not seem to be giving IOM, at least not now.
It is amazing that companies with great fundamentals and well established product lines such as Intel and Iomega have lost significant stock value in recent months while Yahoo has barely budged, holding up better than most Dow 30 stocks.
PS: Wasn't it Jim Cramer who said never short on valuation?
Regards,
Kunal |
