Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: William R. Polk who wrote (9832)	10/23/1996 2:14:00 PM
From: Rodger Wenzel	of 58324

I think the whole point of my demonstration is that so far on 8 to 16% of the rebates have been paid. Based on this they are estimating an incurred between 50 to 75%. Equally the total reserve is not only for this quarter but the previous. They have not paid all the rebates from the previous quarter. These things can have a very long tail, and thus the ultimate incurred can continue to climb. If this occurs only 2 things can happen. 1) charge off against current earnings 2) charge off against past earnings. There is no other choice. Again it is very unrealistic to expect only 1/2 to 3/4 of people to redeem a rebate worth such a large portion of the total price... What percentage do you think ford assumes on rebates?? Again the whole point here is that they have an issue that CAN hurt them. They could of set up a reserve of 90% and very few people would of complained. Then release the reserve later to help boost future profits if it was not necessary. This would of been a conservative approach. GAAP will make them true up to the number eventually, so in the long run the reserve has no effect. In the short term using a number that doesn't seem conservative, only leads to negative speculation.

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