Press Conference, Share Price, Software
To all,
I think Erik's probably right about the press conference,
that is, it'll involve a new product. The announcement
said it was a conference to "view the future of personal
storage." Clearly that wouldn't mean just a rehash of
the Ditto/Zip/Jaz line. It's a guess beyond that. My
guess is that they're going to roll out a Zip/1.44-floppy
combo drive, like the old 5.25/1.44 combo floppy drive
(to counter the bad press about "backward compatibility"),
or a laptop Zip, or both.
For those of you expressing some worry/disappointment
about the continuing slow slide of the share price,
don't forget to watch the intraday volumes. This
morning, for example, there have been a couple dozen
trades of 10K blocks, one at about 30K, and one at
45K. This indicates to me, at least, that we're
still flushing out the short-term institutional
buyers from the secondaries, or from the speculative
run-up earlier this year. In addition to the direct
effect they have on the price, such sales also panic
uninformed small investors into bailing out, prompt
impatient small investors into taking their profits
now, and intimidate small investors on the sideline
into continued "wait-and-see" inactivity. All this
will continue until these big institutional sales
are flushed out. If that happens reasonably soon,
at around $35, then the price will stabilize and,
if the bulls are right about the Q2 report, it'll
soon pick up again. If the slide declines seriously
below $35, then there'll be added to the current
forces an additional element of panic selling that
could drive the price down in a sort of reverse
bubble.
Does any of this fooling around alter any of the
fundamentals for this firm? Except perhaps for
KE's ability to raise more quick cash (which he
won't need as badly as his revenues continue to
grow), the answer is no. It won't make the
LS-120 run faster, for example, nor do I think
it'll cause most consumers out there to become
cautious about snatching up Zips and Jazzes.
So, if the price drops down below $30, accumulate
further. This is still going to be a company
with annual revenues in the billions.
Please correct me if you think I'm wrong, offering
an alternative reading of the intraday volume charts.
On another matter, how much do folks think that
future software will tend more and more and more
to be distributed via the Web? That'd make having
a floppy drive in your laptop less important than
having a modem and a Zip.
Cheers, Tom (long IOMG at an averaged price of ~44)
P.S. Three cheers to Fernando Pineda for sharing all
those calculations with us. |
