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Non-Tech : Any info about Iomega (IOM)?
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To: Stephen Blumenthal who wrote (7063)9/13/1996 6:24:00 PM
From: Stan Walker   of 58324
 
Stephen, the reason the stock price has been going down is due to the uncertainty of its future earnings. Nobody knows what the effect of the rebate program will be regarding earnings. Granted it may have spurred sales, but it's earnings that spur stock prices. I think the market generally views rebates as a negative, especially when they are such a large percentage of sales. The day Iomega announced the rebate program the stock fell $2. . . . Now, when you couple a rebate program with KE's comments about a "challenging" third quarter and you have a recipe for stock market disaster that will not be dispelled until the recipe is changed. . . . As we approach the end of this quarter and the end of the rebate program we can look forward to a more normal 4th quarter so we can expect the price to pick up some. In fact, I think it has already started to rise. The one event that could forestall a continued rise is if Iomega announces a price cut before the 3rd quarter earnings are released. The timing is what would be bad here. Until we have a chance to analyze the effects of the rebate program (and by implication, a price cut) on earnings we won't have any means to judge whether or not Iomg deserves its current PE, or a higher or lower one. An announcement before the earnings report therefore would be detrimental to the stock price. Just my opinion. Stan
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