What crawled up Greenberg's **s ? First he gives credability to his source, but then says no way in hell his info is correct...
6/05/97
IOMEGA INSANITY
Interesting. About two weeks ago I heard from a broker who is often in the flow
of good information. He told me I should start paying attention to Iomega, which
makes the portable Zip and Jaz drives. He said he had heard its fundamentals
were improving, and that Warren Buffett was buying into the company. (Warren
Buffett, who rarely uses a computer, buying into Iomega? In whose dreams?)
A few days later another trader -- who usually knows who is buying what --
told me that former Fidelity Fund manager Jeff Vinik, who now runs a hedge
fund, was buying Iomega stock.
Then, a day or two later, I heard that Hambrecht & Quist analyst Todd Bakar
was starting to tell his clients things were looking better for Iomega. (Interesting
pattern, eh?)
Volume suddenly started to surge from its regular range of around 2 million
shares per day to 3 million shares on Monday, 8 million shares on Tuesday and
17 million shares yesterday.
What's behind the rise? Same old stuff: Either the company is going to be
acquired or its earnings are going to be better than most analysts expect. What
about ongoing chatter regarding quality problems with the Jaz, which was
supposed to be Iomega's second coming? The company recently recalled
75,000 Jaz disks, and Internet bulletin boards are filled with comments from
disgruntled Jaz users. But, hey, why bring up possible problems? This is Iomega,
and as history has proven, when the momentum is at its tail, nothing else matters. |
