Larry,
I currently don't have a position in either IOM or SYQT. If I had one, it would be short Syquest because of their REG S-3 filing. However, it is priced below $5 and I cannot short it. Add to that there is little to gain by shorting it at this level.
From looking at the S-3, I think that Syquest is in much worse shape than I had thought. They have 44M shares about to hit the market, what kind of pressure will that put on the stock price?
It looks to me (and I'm no professional) that Syquest has extracted just about as much from their investors as they are going to be able to, yet they need more. Where will it come from?
Maybe Syquest can HYPE up their stock one more time, and bring in new investors willing to part with their money, so Syquest can sell more stock to an off shore fund. Maybe.
I think Syquest's strategy of selling drives below cost, has hurt Iomega, but how has it helped Syquest? Also, how does Syquest's OEM arrangement with CPQ help? It just means that Syquest sells drives to CPQ for an even bigger loss. Iomega's OEM sales (50% of their drive sales) certainly haven't helped their bottom line.
What does Syquest have to look forward to? |
