Richard, here's my rebuttal to the "local businessman"
He's an idiot.
Ok, so you wanted a little more than that. Ok. Here:
1. Syquest products might enjoy a better price to performance ratio to Iomega products. I have no argument with that.
2. However, Syquest does not enjoy either the brand equity Iomega has. In fact, for Syquest to succeed, they are going to have to replace at least 6MM of those Iomega drives in professional or corporate offices very quickly. And, that ain't going to happen. Remember, Iomega has 12 MM Zips out there (and counting), but has over 15MM personal storage solutions out there. A huge obstacle to Syquest.
3. Most importantly, he is an idiot for investing heavily in Syquest. There are thousands of examples of companies with good products that are lousy investments. Syquest is one of them. Depending on the price he paid for his stock, he will lose his shirt on this one. If Syquest ever turns a profit, he'll have to share that with 150MM other shareholders and bondholders. Of course, Iomega is not much better right now. However, it is a $2B company that has one thing that Syquest will never have: a very definite chance of a takeover if the stock price lags.
Is that a good enough rebuttal for ya? |
