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Non-Tech : Any info about Iomega (IOM)?
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To: Andre Lukas who wrote (4747)7/20/1996 11:16:00 AM
From: Dale Stempson   of 58324
 
Boy was I wrong with my forecast of a positive reaction to Iomega's earnings report. I certainly underestimated the importance of the "whisper" estimates. Perhaps we should follow Young's advice and limit our future forecasts to something less than or equal to analysts' estimates. With the now lowered estimates and other perceived bad news out of the way, we may become the only source of future bad news if we start predicting earnings that are too aggressive.

Here are a few general comments to recent posts:

GREENBERG - Herb reported that 40% of Iomega's sales are in Europe. I thought that in the conference call it was said to be in the $50-60 million range, which would put it around 20%.

SYQUEST - The "deal" with Apple was announced back in early January and was made with Apple Australia. It involved two high-end PowerMacs and was targeted at the Australian publishing sector. This is an extremely narrow focus and included the EZ135 which will be discontinued by Syquest before the end of September. IMO Syquest poses no threat whatsoever and bankruptcy is a very real possibility. If you still have a concern, read through the threads here on SI and the SEC filings in EDGAR.

BACKLOG - It is quite possible that some or most of Iomega's current backlog is "scheduled". It is a common practice for distributors to place large orders and schedule portions to be released on various dates over a period of time. Iomega may not have been able to ship their backlog due to it being sheduled for release in Q3.

REBATES - A rebate is better than a straight price reduction because it improves cash flow (the rebate comes out of Iomega's coffers later rather than sooner). Cash flow is always a major concern for extreme growth companies who need to put huge investments into expanding.

In any case, with Iomega's policy of not commenting much on their future expectations, the price of the stock at low levels and hopefully most of the negative press out of the way, we could see some nice moves up when the next announcements are made. It certainly appears that a large group of small investers bailed yesterday and hopefully this will serve to remove some volatility. Good Luck to all who are still in the game.

Dale
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