>>Do you really think Iomega will be at $2 a share soon? <<
Iomega will be in the $2's next year. When Sony HiFi starts shipping, retail Zip sales will fall 50% within 3 months. This will put a severe financial strain on Iomega, to the point where they will have to either dilute their shares, try and increase their credit line, or sell assets.
Iomega has a history of complete disregard for their investors, so share dilution would likely be a quick solution to a big csh flow problem. Remember, 400,000,000 shares have been authorized by IOM shareholders last year. The total number of shares out right now is about 260,000,000. This leaves about 140,000,000 shares Iomega can issue at the drop of a hat.
With more shares out there and with loss after continued loss posted in earnings, Iomega should end this year in the $4's or high $3's. Then next year should be in the $2's as Zip's fate is sealed by Sony's 200MB floppy-compatible HiFi drive and Vapor!'s complete bomb in the marketplace. |
