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In fact, when Mitsubishi Electronic Corp. said in June that it would start making a rival product, Iomega's shares fell 28 percent. That product, known as the LS-120, is already in use in computers made by Compaq Computer Corp.
``The jig is up,'' said analyst Rick Berry of Murphey, Marseilles, Smith & Nammack, who rates the stock a ``sell'' and expects it to fall as low as 9. ``The best news is behind the company and the only thing I would look for is disappointment.''
Also, Iomega said its business strategy depends heavily on selling many of the disks that are used to store data in its drives, and those sales are expected to provide the bulk of future earnings.
It is crucial for Iomega to ensure that its products are the standard for added capacity. Iomega's drives are not compatible with regular floppy drives, or the LS-120. The LS-120 can also use regular disks.
Iomega also said that it expects its cash balance and current sources of financing to fund operations into 1997, but may need to seek additional financing after that. Iomega had $160.7 million in cash at the end of June.
This article is not all negative, there is still positve comments
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