I've reread the report and it still looks like unit sales of Zips are accelerating, and damn it, they made $115M, double what they made last year, but y'know what, know one gives a shit. . . Sorry to say it, but this stock is dead, dead, dead money for at least the next 5-6 months and it may in fact fall another 30-40% during that time. Here's why:
1) this quarter isn't going to show much improvement over the last (historically this has been IOMs worst quarter)
2) no additional revenue is going to show up from any additional products until 98Q2 at the earliest, assuming IOM can every actually ship anything they say they're going to--how many years has it been and how many products do they have that are selling well?
3) no one is going to jump on this thing while the Sony thing is still floating out there
4) like it or not, IOM is lumped in with the drive sector which implies that their p/e may contract even more
5) increased ad expenses will likely impact earning further assuring that there are no earnings surprises to lift the stock.
In fact, I think only thing that may get Wall Street's attention might be a combination of Sony having some serious delays or technology problems and IOM having a great 98Q2 and 98Q3 with Zip shipments at least doubling between now and then. Oh, I almost forget, Click! will have to start at least showing up in some products, or this won't make a bit of difference, since IOM will still be viewed as a one trick pony.
So, stack all this up and I can't possibly see why I would risk a 30-40% drift downward with almost no upside potential for at least the next 6 months. I'm out--I'll wait for a good entry point. Maybe I'll put in a GTC at $5. . . |
