Sheila, your comments are well-thought out and correct IMHO
So, don't feel compelled to back off of them due to comments from others.
I still can't understand how KE could have such fans out there when he has failed miserably the past 2 years providing any return at all to his shareholders (of course, not including himself who was fortunate enough to sell a substantial amount of stock near the peak).
It is one thing to accept kudos for bringing Iomega from a fledging company into a bigger company. It is another to do so while being in command when your stock does not appreciate commensurate with the growth the company has sustained under his rule.
As for margin calls, you are correct. A lot of people lost some shares very cheaply in the past 2 weeks due to the imprudent use of margin to leverage their investment (including me). Perhaps some good may come out of this after all. I, for one, learned never to hold a tech company on margin any longer. I think it's still ok to hold some stocks on margin. However, this strategy should be used only for the bluest of blue chip companies with good management. Iomega is not one of them.
I have not bailed out of my Iomega investment, and do not plan on doing so. However, after this latest fiasco is played out (it isn't done yet in my opinion), I will relegate Iomega to that portion of my portfolio reserved for highly risky investments.
IMO, KE is solely responsible for this stock being viewed that way. It should not be, based on the huge brand equity Iomega possesses.
As for the Board, I wouldn't hold my breath if I were you. The only way that volatility will be removed from this stock is when another company with better management buys it. And, IMHO, this will happen sooner than later if KE doesn't change his tune regarding Iomega's relationship with the analyst community. For, as you know, the individual investor doesn't have nearly enough money to support this stock. Until the Street does too, it will go up, and go down, and go up, and go down ad infinitum.
'nuff said. Just rambling. Sorry.
Oh, yea, regarding who was buying during those 5 days when the stock sank to $8 . . .
it wasn't the institutions. Much of it was done by individual investors that had sold Iomega above $12 before and thought it was a bargain under $9. Much of it was bought by traders, looking to make a quick buck or two. Much of it was bought by short sellers covering.
IMO, if any institutions bought the stock, it was AFTER it hit $8. Most institutions do not bottom fish. They'll wait for confirmation before buying a stock such as this.
On the bright side, I think most, if not all, of the weak hands have been flushed with this latest catharsis. That's good news. With some good PR by KE this week at Bear Stearns, I think it's entirely possible to see Iomega back above $11 on strength very soon. Not $15, but a start. |
