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Non-Tech : 3M LS-120 Beyond the zip.
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To: Stephen Leung who wrote (141)8/22/1996 5:23:00 PM
From: Patrick Keeler   of 170
 
Please show how you come up with $9-$11 as fair value.

Windows 95 sales are less than forecast, so? Every Zip drive sold guarantees Zip disks sold in the future. Does AT&T charge you $80 to sign up for their long distance service? No, in fact they pay you $80 ! Iomega is passing manufacturing cost savings through to the consumer in the hopes they will sell more drives. Although it seems even upon initial analysis it is much better for Iomega to make 5% on 5,000,000 drives than 10% on 2,500,000 drives. This is because (using the going 9:1 tie ratio) the 5,000,000 drives sells an additional 45,000,000 disks.

Zip demand could be rising or falling. You won't be able to tell from inventory levels in stores.
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