Mary, regarding your message #1552, the following was posted today on Charter Media.
"IOMEGA CORP (IOMG) 66 5/8 -1/2. High-flying drive maker is set to issue 5 million new shares(post-split). In filing its S-3, the company stated that some retailers have seen a slow-down in Zip drive
sales. This statement was present in the section of the document that requires the company to state any concerns that could result in future problems for the company and the stock. It appears that some of the investors that have been wary of stock's significant recent gains have seized this opportunity to unload, as stock has traded down by as much as 1 point early, in a thus far generally positive trading session. Though statement in filing not all that significant, early movement in stock simply serves to demonstrate some of the skepticism that exists."
It seems that the company has noticed the same trend that I noticed at Fry's ten days ago. Namely, slowing sales at the retailer. (It seems that California may be a good indicator of the rest of the country.)
As to my previous comment about slowing sales = slowing earnings growth = slowing stock price gain, allow me to expound. Generally, though certainly not exclusively, stock price is driven my earnings: the higher the real or anticipated earnings, the higher investors/speculators are willing to pay for the stock. Earnings are generated generally by sales and sometimes by margins. (Lower sales may be okay if margins increase because of effiencies gained elsewhere in the business.) Lower sales usually means slower or negative earnings growth which translates into lower stock price appreciation. In other words, with slowing sales, don't expect investors/speculators to bid up the stock ten percent every day unless the company can show a demonstrated increase in margin growth. (Then again, you probably already knew this.:-)
The wild card in all of this, of course, is the ZIP becoming the accepted standard as the replacement for the current floppy. Will this happen? I don't know. If I did, I would be buying all the IOMG I could at the current price.
Thanks for your advice on not investing my two cents all at once and to find out as much as I can before coming to conclusions. I was. In the method of Peter Lynch, I was conducting research at Fry's on Iomega by "walking the mall" for good ideas. What I saw, as a potential investor, made me pause and not jump in by investing my two cents into IOMG. I put a penny into CYRX instead.
Happy investing/speculating (whichever you may be doing!)
Tony |
