RE: Excellent Messages!
Ping Ho,
Thanks for your two excellent messages.
I think that the estimates that you put out are realistic (160K SparQ, 65K SyJet, 20K EZFlyer for the quarter), although probably towards the optimistic end of the spectrum. I think the unit shipments (for SparQ anyway) will be somewhat less, and I think the revenue per drive will not be quite that high.
As far as the Price to Sales ratio of 2, do you realize that IOM is only trading at 1.4? SYQT at a P/S of 1.4 (assuming 80K shares and $40MM/qtr revenues) is $2.8. Also, Iomega is quite profitable while SyQuest is bleeding very badly. But I agree that P/S is the only reasonable way to compare them. P/E is meaningless in this case.
800K SparQ in 1998 sounds reasonable to me. But that's just $120MM in revenue from SparQ. How much do you expect from other lines? I expect cannibalization, and the other lines have only been doing $20-30MM per quarter before SparQ.
As far as the media profitability, are you comparing SparQ to Jaz or Zip? Zip is two-head, Jaz is four-head. I'll concede that the COST is lower for SparQ disks than Jaz disks, but the PROFIT is an entirely different matter. Jaz cartridges sell for about 3 times as much as SparQ cartridges, although they probably cost less than twice as much.
As far as TDK taking stock for heads, how much choice do you think they really had? I certainly wouldn't take that as bullish.
Looking forward to hearing more from you. It sounds like you're fairly well connected and have put together some fairly reasonable projections.
- Michael Coley
- wwol.com |
