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Non-Tech : Any info about Iomega (IOM)?
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To: Ben Antanaitis who wrote (51111)3/25/1998 8:08:00 PM
From: Michael Coley  Read Replies (2) of 58324
 
RE: Disagreement between board and KE?

Ben,

Your message definitely qualifies as the most thought-provoking message of the day.

>> Well, it could be that the board is considering something that didn't sit well with KE....... <<

I think that this is the mostly likely case, and I've thought of six different possible areas (in the order that I consider most likely) where they could have been in disagreement:

1) When to take pricing action. I think this is the most likely of the possible areas. I think KE was looking for price cuts towards the end of the year, while the board was looking for them much sooner (probably in April or May). I definitely agree that it's time for price cuts.

2) Whether or not to pull the ad campaign. I'm definitely in the minority here (and it could be that KE was, too) but I think it's too early to pull the ad campaign. Shift the focus perhaps (to the OEM's and paper and radio rather than TV), but don't pull them.

3) Whether or not to consider a merger proposal. I think that KE would have been strongly opposed to a merger, and I am too.

4) Whether or not to buy another company (or technology). I wouldn't agree with this, in general.

5) Whether or not to delay products due to quality issues. The only thing that makes me wonder if this is possible is the fact that the new acting CEO was Sr. VP of Quality and Productivity at Allied Signal. If the issue was quality, he would be a shoe-in for the short term.

6) Whether or not to lay off employees or scrap projects. Certainly not something to leave over, but possible. With the dip in revenues and slight losses, the board might want to tighten Iomega's belt. I have mixed feelings here. KE has done a very good job of managing the growth, but it might be time to tighten up a bit.

- Michael Coley
- wwol.com
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