Why Iomega Sucks!
I really have to say that I hate this company? Why? Well
because I lost money on them a while back and now I can
get back at them by slamming them every chance I get. It
is easy to do too because the company is LOSING MONEY!
In case you don't know, that will make the future PE ratio
over 500 because companies with low earnings have really high
PE ratios. Over 500! Over 500! Over 500! I had to say
that 3 times just to make sure you absorbed it. That's what
happens when a company is "LOSING MONEY". I had to mention
that again too just in case you forgot. Companies with
really high PE's like Iomega and Amazon.com are overvalued
and their stock price is likely to drop to zero. Once
Iomega posts its negative earnings for the year, I will
actually have to start paying people to take my Iomega stock
because the company's PE will be negative and PE's directly
determine the price of all stocks.
On top of that, I predict that all earnings reports will
forever be a lot worse than what everyone is expecting. What
were you expecting? Well, I think it will be worse.
Now we all know that Iomega's only product is the Zip. I
used to slam Iomega for losing every lawsuit but now that
it has settled the Nomai suit which keeps their razor/blade
model intact, let me remind you that it will cost $40 million
to acquire Nomai. The charge will add greatly to the losses
for this quarter and future quarters when they will lose even
more money. Remember that they are losing money.
They got that injunction against Syquest too but remember
that it won't be in effect for a few weeks and it might
get overturned. In fact, I'm pretty sure it will be overturned
any day now. Plus the injunction is only good in France
and they are too caught up celebrating their World Cup
victory to buy Zip drives anyway.
A lot of people are hyping Iomega's recent victory with
Compaq but let me remind you that no one that owns a
CD-R will ever buy a Zip drive and CD-R's will take
over the removable storage market next year. CD-R devices
are currently more expensive than Zip drives but NO ONE
CARES ABOUT THE DRIVE PRICE, EVERYONE ONLY CARES ABOUT
THE MEDIA PRICE. Everyone knows this.
So forget Zips which are just this year's fad, let's look
at their future products ... they have none! All their
future products are VAPOR!!! From now on, I will always
call any future Iomega product vapor because it sounds
really good (as if they will never ever release it). We
all know that Iomega will never release another product again.
Well their next product is called Vapor! It is dead on
arrival for multiple reasons. First of all, I have thought
of all possible uses for Vapor! and they are all hopeless.
The companies that have signed up to use vapor have not
produced any products which make use of vapor and I predict
that they never will. Believe it!
Why? I'm glad you were wondering because I am about to
inform you. You have probably never heard of FLASH MEMORY.
Your drive cost to use Flash is zero versus $200 for Vapor!
Well no one will ever buy Vapor because NO ONE CARES ABOUT
THE MEDIA PRICE, EVERYONE ONLY CARES ABOUT THE DRIVE PRICE.
Everyone knows this.
I'll admit that flash memory currently cost more per megabyte
(see how UNBIASED I am?) but the price is coming down drastically
every six months and the storage capacity and price for Vapor!
will never ever improve. Inevitably, the price of flash memory
will be cheaper per megabyte since Vapor! will never improve so
everyone will continue to buy flash memory. Everyone will
realize that Vapor! will never improve so they will pay a lot
more for flash memory until the price of flash comes down.
Thus, I have shown conclusively that Vapor has no potential --
now or in the forseeable future.
You want even more proof -- Bill Gates liked the Vapor! drive.
Nuff said! BTW: Microsoft Corp's average daily volume is only
14 million of their 2.4 BILLION shares a day which is less than
1% of their float. No institutions will ever be interested in
buying them because of the low turnover(same for Iomega.)
Want to hear more? Sony has a future product but instead of
calling it Vapor 200, I'll call it the GUARANTEED ZIP KILLER.
Every computer manufacturer will dump Zips as soon as
the Guaranteed Zip Killer (GZK) is released. This is the
killer product that will drop zip sales to zero even
before CD-R. Everyone will buy GZK because it stores
more than Zip and it is compatible with a floppy disk.
I can GUARANTEE that any device that:
1) is backward compatible with a floppy disk
2) is backed by a MAJOR computer manufacturer, and
3) can store MORE information than a Zip drive
will outsell Zips 10 to 1. Everyone can see that this
must definitely happen. How could it be otherwise?
I can't believe how many people were congratulating the
CEO for recruiting that Sony division head. This is a
complete non-event. It doesn't matter if Iomega now
knows about the production, marketing, development, yadda
yadda of GZK. People change jobs every day so this
information really shouldn't be considered good news.
When Edwards left -- that was bad news.
I have proven my points beyond refute. Anyone who
disagrees with me is a blind Iomaniac and I promise to
make fun of you every time the stock drops. Believe it!
Lance Tokuda
P.S. In case you are not reading this post, I promise to
repost it in parts and in response to any possible
news events as often as possible. In fact, I promise
to devote a major portion of the day to reposting
snips from this very article over and over. Please
respond to me as often as possible so I can repost
portions of this article. You see, by posting my
opinion 10 times a day, I reduce your chance of missing
out on my wealth of knowledge. Obviously, everyone is
not aware of the things that I know, otherwise, the
stock would be trading at $3. Believe it!
P.P.S. I always write "Believe it!" otherwise you might not
believe me.
P.P.P.S. I recently bought shares of Iomega again. |
