Reuters News Story:
Iomega (NASDAQ:IOMG) up on shortcovering, IBM rumor
LOS ANGELES, May 1 (Reuter) - Iomega Corp's shares surged 4-1/8 to 58-7/8 on shortcovering and a report that Iomega's propretiary Zip drive product may be used in International Business Machine Corp's (NYSE:IBM) upgrade of its Aptiva home personal computers, analysts and investors said. Cliff Josephy, analyst with HD Brous & Co, Iomega's stock rose after a report in trade magazine Computer Retail Week said IBM may use the Zip tape drive backup in new Aptivas."This shows great demand for Iomega products. Their goal is for the Zip drive to be built in as many computers as possible.This is a gigantic step," he said.An Iomega spokesman declined to comment. An investor relations spokesman said there was no news to explain the stock's recent volatility. A spokesman for the IBM PC Co also refused to comment.
But one industry source said that IBM is indeed looking at the Zip drive, and that Packard Bell Electronics Inc is also looking at including the Zip drive for its new PC models.
A spokeswoman for Packard Bell in Sacramento, Calif., could not be immediately reached for comment. One trader said shortcovering was also contributing to the stock's move, which was trading last week at around 46. "The stock's been very active over the last nine months and there's been a bit of a short squeeze," the trader said.
Iomega's stock has also climbed further since it announced a two-for-one stock split last week. The April 22-29 issue of Computer Retail Week, the trade journal, reported that IBM's refreshing of its Aptiva consumer line - code named Courageous - is said to include features such as a scanner keyboard and built-in Zip drives. |
