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Non-Tech : Any info about Iomega (IOM)?
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To: s. bateh who wrote (56429)6/18/1998 7:21:00 PM
From: robert read  Read Replies (4) of 58324
 
If Iomega ends up tomorrow this is why(I think):

1) The report says that it expects to be cash flow negative second quarter which is about to end. And positive the second half which starts in two weeks. So their outlook on cash flow has not changed since last earning report. Or is even better that last report because of the job cuts.

2) They said that they are in violation of lending institutions covenants. All it means is that companies have to be profitable for the covenant to be in compliance. We knew that they were expecting a loss and that they were cash flow negative. Therefore the street already knew that they were going to be out of compliance this quarter. That is why the stock has been dropping even with good news.

3) The stock has been beaten down because of all of these concerns and it can move up now because with all the bad news they expect to make money in the fourth quarter and be cash flow positive and in compliance with lenders covenants.

4) People here are over reacting yelling chapter 11 already. Think, Why would CPQ would commit to Iomega and put the zip in their boxes if they thought that it was in deep financial trouble?

Breifing.com is right when is says to play this as an speculative turn around because the price is down a lot already.

It is time to make money on the volatilty.
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