<< Mind you, I do understand that there's always a possibility that a person who disagrees with me may be stupid and/or delusional. I'm not saying you are, Ken, but I can think of some examples. >>
Me too..
BTW:
It is perfectly OK to disagree when all parties have done their homework. Obviously, you, David and a few others fall into this category. You understand the risks of this stock, and are fully aware that the past 4 quarters reflect some alarming things about the company. I lose patience when some bull is posting personal attacks against the bears without knowing a single thing about the company. They'll attack, attack, attack, but don't even understand the reason why the Q4 numbers show weakness in the razor / razor blade strategy. They don't understand how a higher OEM sales ratio HURTS rather then helps margins. It is amazing that my comments a few days ago were the first ones addressing the Q4 balance sheet.
But, I will promise to tone down the attitude.
Now, my questions:
1. Increase in ZIP units, but decrease in revenues. How can this turn around without increase in advertising? By magic?
2. Disks sales increased about 50% over Q4 1997. Where is the contribution to the bottom line? revenues?
3. What will be the driver that will increase tie ratios? Advertising was tried last year, and failed. What will work now?
4. Jaz revs - even with strong Q4, still down year over year. What will stop this slide?
5. High margin products: ORB beats Iomega hands down vs. ZIP250 and JAZ. Brand is the only thing it has going for it. Is it enough?
6. Low cost PC squeeze: How can OEMs EVER include a ZIP in all PCs? This cannot occur unless ZIP = $18 OEM. Look at where the unit volume is.. All in non-ZIP PC price class. For those who say they don't need all PCs: how can you say that? The data shows that the current strategy is resulting in sliding revenues.
7. CLIK: No person can fool themselves into believing that this will be OEM'd into consumer class (high volume) devices. What will drive people to buy it? Increase in SG&A? but earnings will collapse.
8. Why sell Ditto for $3M? What was the real reason?
That's good for now...
The bulls have to explain this:
Q4 showed that a decrease in prices + higher OEM percentage had a LARGE impact on earnings and revenues. This was NOT made up for by the increase in disk sales. Not by a longshot. Given the environment of lower PC prices, AND increasingly lower retail revenues, and increasing competition, how can this trend be reversed, without impacting earnings?
and don't say "new products". We all know that without the ZIP Iomega is dead. It's a $1 stock. Investing on "new product" hopes is like buying a lotto ticket. It's best to watch the early ramp for a quarter THEN invest.
kp
PS: I have to admit the stock is tempting at this price... |
