Bought Some
With 1/3 of my IOM sales money from yesterday (Man, am I glad I stuck to my pre-planned sale date), I bought IOM at 8 5/8 (limit order!). I have another 1/3 set to buy at $8, and another 1/3 set at $7.
I am not as sure as yesterday that IOM will recover up to $11 today, or even next week for that matter. In fact, it could drop into the $6's if it follows the typical H&S chart routine.
The Mutual Funds who are jumping ship will probably not be back. Few supported it before, now probably none but the riskiest will ever touch it again. The current price with PE around 21 is actually close to the PE I have said before that IOM deserves. Sales growth is NOT assured. Here are some of my concerns:
1. American Sales may be flat, or actually decline from 1998-1999.
2. As even more OEM inclusion (at the expense of retail) happens, the tie ratio will drop even more.
3. Laptop Zip sales have, and will add minimal revenue
4. Jaz2 will bomb at its current price.
5. $100MM in advertising WILL generate more sales, guaranteed. BUT, will the sales offset the huge expense in the long run? For the short term, Iomega will take a hit on the bottom line to pay for this exposure. This means more downgrades.
6. The psychology of this stock is on life-support.
7. Ditto is disappearing. Cheap discs are murdering it. Jaz, SParQ, SyJet, the upcoming 2.1 Gig Orb and 4.7 GiG SyQuest Quest, etc.
8. Vapor! will be a niche product.
I must say that I too was blindsided by the earnings report and price action today. If I would have even guessed, I would have shorted the sh** out of it yesterday when I sold. I thought it would just sit where it was at $12 3/4 for a long time. I, along with Truff, find it distressing that they issued no warnings esp. if the Asian Flu bug had hit them (which I still think is horse doo-doo). It's American Sales that threw water on the party. |
