Rod, OK, I'll try to "enlighten" you.
"They have a razor thin profit margin.." Yes, they do. Iomega is going for total market share, keeping their margin low in order to gain sales. This is part of the plan, not something forced upon them by competition.
"and the current earnings estimates don't justify the astronomical valuation at 12 or even 10 never mind 20 a share." Yes, they do. Iomega's growth justifies their PE.
"The technology has an extremely limited future..." Based on what? The "short" life of the 3.5" floppy? (12 years and going.)
"Does anybody really think this company is worth several billion" [yes] "with profit margins of 5%" [already covered that] "and ever increasing competition?" Let's see... competition... hmmm.. I can buy a Zip drive or a ... what? An EZ-135? That problem-prone, discontinued abortion from near-bankrupt Syquest? No, that coudn't be it. How about an LS-120? Buy it WHERE? MKE can't manufacture them at a reasonable cost. That's why you can't get one. Besides, everyon I know, who has a megafloppy has a ZIP. Or maybe you mean I could buy a Fuji MO drive for twice the price?
Or instead of a Jaz, I could buy a Syqest Syjet. Whoops, can't do that either. The STILL havn't shipped. Or I could get a Panasonic PD-CD. More expensive, much slower, and less capacity. Or perhaps a CD-R. Much Much slower, less capacity, write-once.
Now, CD-R at least, has a future. But it really doesn't compete with the Jaz drive.
"Perhaps the bulls can enlighten me as to what it is that I am missing --" It's nothing you havn't read before on this board. A great company with products in demand. If Zip and Jaz remain just nitch products, then Iomega will "only" make a huge pile of money. Add to this the *posibility* that the Zip drive will become standard equipment on PC's world wide, and you have one hell of a stock play. |
