To All: I recently wrote a personal letter to the new CEO of IMP, Mr. J.P. Ferguson, in which I expressed my personal frustration over the actions of the company in the past year. This is the response I received:
Dear Mr. Gentry:
Thanks so much for your letter. Your letter exhibited great reasonableness; reasonableness which I am not sure I could match in a similar situation.
It is always painful to hear stories of investors which lost nearly all of their investment in IMP stock. It was one of those cases in which the stock market behaves irrationally and investors get burned as the result.
You are probably aware that the IMP stock, which has been at $3-$5 per share for years suddenly ran up to, I believe, as high as about $23. The IMP stock price increase tracked, almost exactly, the increase in the stock price of Iomega, the manufacturers of the ZIP disk drive and on of IMP's customers. Apparently, the stock market decided that IMP stock was a way to participate in the Iomega boom at a lower stock price.
With 30 million shares outstanding, the IMP market capitalization at a share price of $20 would be $600 Million. I am told that there were never any fundamentals or prospects of fundamentals which would support anything like a market capitalization of $600 million for this company. Alan Greenspan recently referred to the state of the stock market as "irrational euphoria". I fear that was what happened with the run-up of the IMP stock.
It appears that those company employees who sold were simply acting in recognition of the fact that the company valuation had risen far beyond a sensible level. Most of them had been stockholders for many years and found themselves with an unexpected and irresistible financial opportunity. One might say that they had a moral obligation not to sell, but self-interest is a very strong emotion and I can't fault them for their actions.
As far as I can tell, the company or its employees never did anything to hype the stock; IMP stock was simply a passenger on the Iomega express train.
I must say that I am surprised that your broker put you, a conservative investor, into IMP, or any other semiconductor stock. These stocks are, by definition, volatile and large swings in price are frequent.
Anyway, I regret your loss. I can assure you that a large number of people at IMP are doing their best to ensure that future stock moves are in a direction that only benefits the shareholders.
Best regards,
J.P. Ferguson
President/CEO |
