IOM4Q1997: KE takes a fall
Q: What was the one thing that IOM investors have known for the past few quarters?
A: Even with production problems (shutdown of line) and parts supply problems, IOM ALWAYS beats the number by a hair.
Until this quarter, when with 10s of MILLIONS of extra dollars going to SG&A, reserves, etc., IOM misses the est. by ONE penny in what is the strongest quarter of the year.
This is a small investor setup folks.
The institutions wanted in, but not at what they felt was a reasonable price.
They wanted a discount price.
IOM needs the institutions in to stabilize the price which is dominated by traders. The options just created by the split are not attractive without price stabilization. Yes all tech stock prices fluctuate but the quality companies don't fluctuate this much. Just look at Sept. through Jan. Its like a roller coaster.
Why didn't the institutions get in earlier. Too risky-- the stock-- as everyone knows-- was discovered by the little people and traders. But they wanted in now that IOM's market dominance has been established.
Who do you think shorted 1.5 million shares in after hours to bring the price down 30%?
Who do you think was waiting in the wings on Friday to spend
ONE HALF OF A BILLION DOLLARS for IOM stock?
Small investors recognizing a bargain when they saw it?? LOL
Hardly.
They were the ones doing the selling.
Now you know why KE was different in this CC, compared with ALL of the others.
Oldtimers know this-- he has always been very well composed, and conservative.
He knew what he was supposed to say and didn't like it one bit.
He is proud of what he has done as he should be.
In the 3rd Quarter conf. call he was quite enthusiastic. He knew 4 Q would be good.
And it was. Too good.
Asian "problem"-- 80% growth? This man is not stupid, he knew better--- he just couldn't say-- it wasn't part of the script.
Delay in Jaz 2 due to "problems" right before its ready to be released?
You don't do quality checks at the door. They learned this one from the Jaz platter problem.
Maybe there was a problem somewhere along the line, but it was taken care of before the press release. They simply weren't going to be able to hide the revenue.
Discussing a major Ad campaign as a last ditch effort (he definitely overplayed the part here)
when all the major computer players-- INTC,MSFT etc.-- have been advertising like crazy for the last year and half. Come on now, this ad campaign finally classifies IOM as a major corporate player. He knows that, but the CC wasn't supposed to sound optimistic.
Tie ratio? We've had those fluctuations all the time. Yes, OEM drives are not money-makers but the purpose has been to get inside the box. He says this every Q, and the low tie ratios were expected. Watch for them to bounce back in Q1 as all of the newbies go get their ten pack. One disk at a time?-- I don't think so. American's buy in bulk to save money--and ten packs are the best deal. AGAIN-- this has happened before.
Folks, when you miss you don't miss by a penny. Not with this kind of cash flow.
I've read EVERYTHING written here and on the SI board since earnings and listened to the CC twice-- not so much for content-- there was nothing meaningful-- but for tenor.
IOM's stock price has been a rodeo, but the company itself since KE came on board has been nothing short of remarkable given the difficult tech market and the amazing growth it has experienced.
KE is a professional-- but he is just one person.
There were larger forces at work this quarter.
We think we know how the world of Wall Street works, but when it happens that way we "can't understand."
Poorer, wiser but rational, Ray
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