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Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Ralph Bergmann who wrote (4855)	11/28/1997 10:47:00 AM
From: Dale Stempson	Read Replies (1) \| Respond to of 7685

Ralph, To recap: 240 million is currently the number of shares Syquest has "authorized" or "approved" for issue. The 143 to 150 million shares number is an estimate of current shares "accounted for" or in other words, isssued or reserved for issue by including vehicles like warrant and preferred stock conversions. 68 million is the current number of shares "outstanding" (as of 10/28). While we know that: conversions are continuing to occur at a rapid rate, shares outstanding are increasing, and Syquest has stated they will be seeking more financing by tapping into more of their newly authorized shares, I think it would be unreasonable to use the 240 million number in any estimate calculations. Regards - Dale

To: Ralph Bergmann who wrote (4855)	11/28/1997 11:18:00 AM
From: Dale Stempson	Read Replies (1) \| Respond to of 7685

Re: >>>Then the next question is what Iomega will do, because the sparq will certainly take some market share away from their zip. Maybe they will sell the Jaz for the same price as the sparq.<<< I believe the SparQ will have virtually zero impact on the Zip. With Zip drive prices now down in the $99 range (and moving lower), over 10 million sold (and moving higher), and important compatibility advantages, the Zip has clearly established itself as the current leader/winner in the so-called superfloppy category. It does appear Syquest believes the SparQ and SyJet target different sub-markets, I have to believe that if the SparQ becomes a smash hit, then it will significantly impact SyJet sales (and Jaz). Perhaps I am underestimating the importance of the minimal differences in capacity, speed and performance. In any case, Iomega's response (if any) is still of course an unknown. As you point out, they could lower Jaz product prices. Given their volume and profit margins it does appear they have room to do so. In addition, Iomega has a huge R&D budget which could at anytime reveal a new competing product. While I think this possibility is somewhat remote, I think it's safe to assume Iomega won't give up their Number 2 product line without a major fight. While I believe Iomega is Syquest's main competitor, you'll still need to keep a close eye on Castlewood. The Orb appears to be better than the SparQ (on paper) and I would have to imagine that they feel very confident about getting past the legal issues. It's still quite early with no product shipping and what are probably limited resources, however this company could be a very good acquisition candidate. Regards - Dale