THE MOTLEY FOOL -read this on Iomega-
(FOOL GLOBAL WIRE)
by Tom Gardner (TomGardner)
ALEXANDRIA, VA, June 5, 1996 --Not pretty.
QUESTION:
"Why does the stock fall so hard when someone downgrades it from a 'Buy' to a 'Hold'? Doesn't 'Hold' mean 'Hold', not 'Sell'. . .?"
RESPONSE from Huibs pht:
"..no, hold means sell, sell means you should have sold already, buy means you should have already bought, and strong buy means buy, accumulate means they don't have an opinion, buy on dips means they have no idea which way the stock is heading, and strong sell is ONLY used for Syquest, and it keeps going up..
..go figure.."
Reverse prophecy: This afternoon Nasdaq announced its intention to delist SyQuest for falling below minimum net tangible assets of $1 million. The stock fell $5, or 35.7%.
Iomega Corporation (NASDAQ:IOMG) fell $1 3/8 today, perhaps down at market close in strange sympathy with the talk of a delisted SyQuest. Remember what your MBA professor taught you. . . the markets are efficient. Sure they are. I personally am falling in line with the very brief comments that Chiros was able to make yesterday---amidst a hectic schedule. He posted that he's feeling even more bullish about the company's prospects with each day.
Iomega's secondary, which will bring in something north of $175 million, is putting money into the hands of a management team that has excelled. That their performance has gone unnoticed by the mainstream financial media is shocking. I mean it really is shocking. We continue to recommend to Foolish investors that when it comes to investing in technology, you focus exclusively on the technolgy media, the technology itself, consumer voices in Fooldom, and the common sense business principles taught by the likes of Peter Lynch.
Let me share this short note from Lurker439, posted just past midnight this morning in the IOMG folder:
"About 18 months ago Iomega stock was selling for $3 (you have to divide that by 6 to compare it to today's price) . And there were ~20,000,000 shares outstanding. So in theory you could have bought 100% of this company for $60,000,000 back then.
Largely due to CEO Kim Edwards' efforts, today Iomega just convinced some of the Wisest investors on Wall Street to pony up $175,000,000 for about 4% of the company.
I'm not complaining."
Funny, there has been some complaint that the Iomega folder is filling up with too much chatter, but I continue to find some of the most extraordinarily honest, diligent, and convincing research carried out there each day. Yes, 86 folders is a lot; that makes for over 40,000 notes on the stock over the past 18 months. But you know what, that's the coverage one ought to expect from the single best performing US stock over that period. And what's more, a careful read of the work performed therein would save $60,000 of business school tuition and related costs for many. The education there has been that powerful.
In the excellent book, Soros on Soros, George Soros offered this:
The misconceptions and misunderstandings that
go into our decisions help shape the events in
which we participate. Fallibility plays the same
role in human affairs as mutation does in
biology. . . We are capable of making statements
that are either true or false. . . To the extent that
we can rely on true statements, we are capable
of attaining knowledge. . . So we need to
examine what kind of true statements we can
make.
I know, enough of the Soros already. Apologies. The truth is, what Soros has outlined in this series of interviews are some solid investment strategies coupled with a powerful vision for the future of truly open markets, unobstructed lines of communication, freely flowing information and the Internet.
But if we just apply the above passage to Iomega, Fools need to continue to demand of ourselves that we focus primarily on the things that we KNOW to be true. Statements like the following:
1. Iomega is now up 1473% since May 17, 1995;
2. Iomega has $508 million in trailing 12-month sales;
3. Iomega outperformed 1Q estimates by 45%;
4. Iomega has OEM deals with Packard-Bell NEC, Micron, Hewlett-Packard, among others;
5. Iomega did not have a high return rate of drives after Christmas;
6. Iomega's secondary offering was not halted by the SEC;
7. The Wall Street Journal has been wrong;
8. Barrons has been wrong;
9. The Motley Fool holds itself numerically accountable;
There are nine factual statements, as far as I can tell. There are dozens more. I'd like it if we could build on this list in the Iomega folder in the days ahead. It may be time for the "Stick to the Facts" campaign, after the silliness I saw on television today around noon.
Transmitted: 6/5/96 6:32 PM (foolport) |
