News regarding IOMG's ride over the past week from DBC's Movers & Shakers .....
This article is located sfgate.com
BUSINESS INSIDER -- Is It Possible to Pay Too Much Attention to Fund Expenses?
Also, Iomega stars in sequel to momentum mania
SHORT POSITIONS
-- Iomega insanity (yes, folks, it's baaacck!): The stock of Utah-based Iomega, which makes the Zip portable disk drive, leaped 4 1/8 yesterday, or another 20
percent, to 24 1/8, after a trader said in a televised interview that based on technical factors the stock is headed toward 30.
That's still a far cry from its all-time high of 54 in May, but who's counting? In the past 10 trading days, Iomega has zoomed 71 percent on volume of nearly 90
million shares -- or almost as many shares as Iomega has outstanding.
Yet while the stock has risen, most of the news surrounding the company hasn't been particularly good. Analysts have slashed their third-quarter estimat es for the
third time in recent months, with projected earnings being cut by nearly half.
And in recent days, brokers at Hambrecht & Quist, Iomega's lead underwriter, have told clients that analyst Todd Bakar warned them there's still a chance he
could lower his numbers further. One short-seller says he was told by his H&Q broker that Bakar also warned that he wouldn't be a buyer of the stock right now,
in part because the company's balance sheet is deteriorating.
Bakar couldn't be reached to confirm the information.
So, if the news is so bleak, why is the stock rising? Nobody can say for sure, but explanations include covering -- or buying -- by short-sellers, who had borrowed
the stock on a bet that it would fall; forced ``buy-ins'' by mutual funds that are demanding that shares lent to short-sellers be returned; and a rediscovery of Iomega
by momentum investors.
-- H&Q revisited: Yesterday's item on Hambrecht & Quist characterized the company's fourth quarter, which ends next Monday, as a ``disaster,'' considering that
earnings per share will be less than half what they were in the second and third quarters.
I want to make something perfectly clear: The use of the word ``disaster'' was mine, not that of Morgan Stanley analyst David Hilder, whose comments were also
included in the column. ``I did not and do not view the quarter as a disaster,'' he says. ``My estimate clearly implies that net income and earnings per share will be
down significantly from the June quarter, but I think the reasons for that are well known and well understood by anyone who bought the stock on the offering.''
While on H&Q: The same item said H&Q's first quarter ends January 30; make that December 31.
And e-mailer Howard writes: ``Maybe Hambrecht & Quist has hardly been a barn burner in your eyes. But a 14 percent rise in two months used to qualify for just
that description.''
Sorry, these days it's not a barn burner unless it's rising 14 percent a day. Just look at Iomega. |
