Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: Ken Marcus who wrote (1202)	4/25/1996 12:45:00 AM
From: Rick Mortellra	of 58324

The CBs were issued in March in place of the cancelled equity offering fiasco. The underwriter, H & Q, took the lions share of the $46 million in bonds. Each $1000 in bonds is convertible into about 50+ shares of stock at around $19 anytime after 5/15. At IOMGs current price, this gives bondholders about $1500 in profit per $1000 bond. Not bad for a 2 month loan. Bondholders don't have to convert, but I sure would. The recently released EPS of 16 cents does not seem to include the dilutive effects of an impending conversion. Thus, I suspect the recent stock split was made in order to have the needed shares for the conversion in addition to the reasons KE gave. I don't want to go into a long speech about why CBs in fast growing companies like IOMG are sold, but in general the stock price usually takes a nice haircut after the conversion. If not immediately, then when next quarter's earnings are released as EPS fail to meet expectations. That could quickly pull the legs out from under this stock! I was hoping this issue would be brought up at the meeting, but apparently it wasn't. That's all.

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