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Non-Tech : Any info about Iomega (IOM)?
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To: David S. who wrote (51908)4/3/1998 6:19:00 PM
From: hankiba  Read Replies (1) of 58324
 
I have been watching this site for 5-6 months and have seen you idiots talk about what you think is important. Most of you are so stuck in your ways you would rather be loyal than right.

The important issues to follow are laid out below.
I think that the key issues for both companies are quite simple assuming the demand for external storage remains strong. The keys are execution to the oems and improving yields on product.

Both have good distribution networks set up and both have good
products (even though the Jaz 2 has had difficulties and the Sparq initially had eject button problems). Everything being equal, I think that Syqt has a window of opportunity presented by 1) the $100 million Iomega ad budget drawing thousands of 1st time customers into the store and getting pushed by salesmen to the value 1 gig Sparq, and
2) the production problems at Iomega (witness the delay in Jaz 2 and the distraught relationships with OEMs due to neglect by Iom, and 3) the resignation of Kim Edwards.

Going out 2 quarters it will be important to measure Syqt in terms of its revenue ramp. You should focus on 40 million in Q2, 60 million in q3, and $80 million in Q4. If this happens, the stock should finish the year at $6 based on P/S. My understanding is that some very big, fast money is about to enter syqt if the revenues can ramp as expected.

Now Iomega on the other hand is not done or dead. I think it is important to combat the
Sparq product introduction with price cuts of their own. This way they can captialize on the brand recognition and installed base that they do have. They should then try to repair the oem relationships that they have precariously weakened and they should fix the
production issues that remain unresolved. There is no reason that Iomega can't be a $8 billion dollar company if it changes its course soon.

In the short term, I am long Syqt, wait and see on Iom. The qtr to measure Iom is 2 qtrs away when the impact of the new ceo will be felt.

Hope this helps,

Hank
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