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Non-Tech : Any info about Iomega (IOM)?
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To: Sabrejet who wrote (6333)8/20/1996 11:18:00 PM
From: Bill Fischofer   of 58324
 
I must disagree with you.

The time to have made your argument was during the initial decline in the 40s and 30s when the technicals started breaking down visibly. Unfortunately, I did not have many technical tools at my disposal then and so did not take profits. Having waited this long and now looking at the technicals, it seems to me that we are very close to the bottom and that the reversal off the bottom may be a lot more sudden and sharper than many of the bears believe.

It seems to me that the bullish complacency which existed in May has been replaced with a similar bearish complacency. Given that I am in no danger of margin calls or similar distress it seems that the most prudent thing to do at this late date is simply nothing, or to look to buy on signs of a final panic selloff.

To amplify why IOMG could reverse suddenly consider the following "what ifs":

1. The Motley Fool announces that it's selling IOMG. A spite rally of 5-10 points would follow almost instantly. Wall St. would love nothing better than the chance to rub their nose in it.

2. Compaq could announce an OEM deal for Zip. Do not doubt that this will happen eventually. When is anyone's guess.

3. SYQT files Chapter 11.

4. Market Makers and institutions decide that the stone has given up its last few drops of blood but notice that there are a lot of complacent shorts out there ripe for a good squeeze. Remember that the biggest squeeze occured *after* the last split with the float the same size as it is today (possibly minus some IOMG repurchased shares).

There are probably others in the near term. In the longer term the earnings will take care of the stock. Remember that IOMG beat its 2Q estimates and simply stated that 3Q would be "challenging". IOMG management seems to have done the conservative thing in trying to temper speculative excess in the stock, but from the price action since then you'd think that SYQT's and IOMG's earnings had somehow been swapped. This is still a company growing at triple-digit rates with a trailing PE now well below 50. I find it curious how IOMG (which has little or no effecitve competition in its sector) is sure to be headed for PEs in the 20s or teens while NSCP (which has MSFT at its throat and less gross than IOMG's net) still lolls along at a PE something north of 300. What's wrong with this picture?

Forgive the ramblings. Just one of those things we do from time to time. :)
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