You are right in a sense about an attack on Iomega, but I doubt it is as "orchestrated" as you may believe. This is a stock that seriously burned thousands of individuals and dozens of institutions, many of whom will never participate in IOM no matter what numbers it turns out.
Part of the long's problem is that they cannot separate a company from it's stock. The two do not necessarily have a direct relationship. IOM could very well have a PE of 10 this time next year, and never recover. Iomega, the company, is reporting very good numbers, but the stock is languishing. The long's argument is that "this is a $30 stock trading in the teens." Well, suprise, this is no $30 stock because it is trading at 14 1/8 and headed lower. Just because the company has a forward EPS 80% above last year is no guarantee the stock will go up lockstep. Granted, it may be unusual, but then again, so has the performance of Iomega stock in the last 2 years. If enough Institutions and individuals refuse to get involved in it (for whatever reasons), it may never see the 20's or even upper teens again.
I like to think of this as not an "orchestrated" attack, but a sort of mobbish "Scarlet Letter A" type thing. And it works for the shorts. |
