SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Iomega Thread without Iomega
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: David S. who wrote (9155)4/17/1999 1:30:00 AM
From: maaad  Read Replies (2) of 10072
 
David and all: Reg S is a way to pay debts or raise capital with stock. This usually occurs with companies that have stock prices of $5 or less, uncertain future prospects, and/or financial problems. The company issues stock to the party they owe money or wish to obtain working capital from and that party will sell the stock short. The large number of shares sold short usually drives the stock price down and the short seller covers with the shares they already own to lock in their profit. The reason I mentioned this is that in note 6 of the annual report on page 53 the following statement was listed:

"The credit facility is a $150 million secured revolving line of credit that expires on July 14, 2000, and is secured by accounts receivable, domestic inventory, domestic intellectual property, general intangibles, equipment, personal property, investment property and a pledge of 65% of the stock of certain of the Company's subsidiaries."

If you look at the history of Iomega's main competitor SyQuest; you will see a pattern that matches the current situation for Iomega. This is declining demand, margins, and the sale of drives at a loss for expected future earnings on disks. SyQuest was able to stay in business by issuing stock to finance operations.

As I see it Iomega is headed in the same direction. The annual report shows that R&D expenditures decreased. They are going to have to spend a lot more to enhance existing products and develop new ones.

maaad
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News