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Non-Tech : Any info about Iomega (IOM)?
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To: Young D.T. Nguyen who wrote (2076)5/27/1996 6:54:00 AM
From: olduser   of 58324
 
Young, A $99 Zip and $5 Zip disk Can't Support $6 Billion Market Cap

Young, You Said:

"Based on what I know about the LS-120 technology, it can not compete
and profit with $200 Zip and $15 Zip disk. There is no way that the
LS-120 can compete with a $99 Zip and $5 Zip disks in the future."
___________________________________________________________________________

Young, you must be aware of what is happening to the Semiconductor Industry. Prices of chips have fallen to an all time low - AND THE STOCK PRICES FOLLOWED THEM DOWN. If you need proof, you need to go no further than Micron (MU) whose stock price was 3 times more than it is now, just less than a year ago.

If Iomega's product cost structure is for "a $99 Zip and $5 Zip disks in the future", there can't be enough profit in the product to justify a $6 Billion Market Cap. Iomega will be committing suicide to sell at such a low profit margin. Really successful companies make their products for a cheap price and sell it for a healthy profit. If Iomega is out to give it away just to get it in everyone's hands, I see this as a poor strategy that will lead the company down the same path that the Semiconductor Industry finds itself on.

Furthermore, Iomega is virtually a one product company, but I won't even address that at this time.

Frank
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