Rick, One over riding factor to consider when saying that iomega does not care about share holders, KE and the other management owns a quite bit of stock, thay are also stock holders; therefore, I disagree 100% with your statements on that subject.
We all know the history of the secondaries. WIth the first one we saw concerted bear attacks with a lot of false information and lowball estimates from Montgomery. SO iomega went to the easier convertible debenture deal. Makes sense. They should have done this in the first place with only a very short positive earnings history behind them. As far the convertible debenture deal being a no-brainer, in retrospect it was. But, the trading in those for the next few days had them just above par.
Now with this latest secondary, the stock rocketed up, got some bad press, and a forward looking statement (leak) from one of their managers, so they had to price it at a good discount. But, this price is probably still more than they originally expected.
All in all, despite all the problems, the secondary debenture deal and this last secondary raised more capital with less dilution than if the original had gone through.
As iomega's inventory turns increase it's capital needs will decrease.
If zip grows to become a standard, as I believe it will then it's growth will not stop for the next few years. Basically if they continue to grow and reward us as stockholders, then I don't mind if they have to raise capital every once in a while; the 5% dilution we had with the last secondary is not all that much.
If I was a shortseller, I would find a company with poor prospects and a high stock price. Not a company with fantastic prospects, management, products, and marketing.
Ken long on iomega
P.S. Why don't you have an e-mail address? |
