Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: Eve Edelson who wrote (38702)	12/7/1997 8:49:00 PM
From: Steve Wiz	Read Replies (9) \| Respond to of 58324

Just a few comments: I was surprised to see everyone bashing Lukens comments on the Malayasian Ringgt's temporary effect on operations. His comment was much needed and conservative. From second quarter to third quarter the Ringgit's drop helped fuel cash flow upward considerably. Iomega's cash on hand of almost $166 million raised alot of eyebrows the street. It wasn't to long ago that Iomega was pandering for money on Wall Street. The dollar vs ringgit has continued to go in Iomega's favor. After breaking through resistance of $1:3.5 the ringgit now stands at 3.7325 to the dollar. This will have a dramatic effect on Iomega's cash flow in the fourth quarter. Even with Comdex and new product introductions cash flow will continue to trend higher. Luken wants to make sure that Analysts realize that the current cash flow trend isn't totally indicative of Zip driven business. Any fruther gains will be used to lower zip and jazz asp's. Luken is just trying to keep the Street in check. Others are questioning why Iomega hasn't lowered Zip prices to $99 yet. Why? Iomega isn't quite sure how much of current retail backlog is firm and how much is soft. Iomega which sells internals to OEM's for $50 to $60 can maintain margins at the expense of retail purchasers. Also, Iomega allows PC oem's to sell Zips as options for $99. Since IOM ships these drives to OEM's for 50/60 IOM probably allows PC manufacturers to pocket a little change on each sell. Giving them an incentive to offer them. Now is not the time for $99 Zips. With inventory levels high at retailers IOM would owe price protection on these drives. Better to wait till inventory levels are low after christmas. I suspect that IOM will lower Zips to $89/99 a few weeks before Sony introduces it's HiFD 200mb to blunt any inroads. Offering the best selling removable storage drive of all time at an extremely cheap price will blunt Sony. I do have to comment on the Barron's article last week. It was probably the most reflexive, bias piece of journalism I have ever read. I was quite amused. I only feel sorry for Savitz who after being cajoled by Barron's wrote a piece displaying that he knows absolutely nothing about the technology sector. His credibility has also been damaged. Sony's HiFD 200mb is faster than the Zip, holds twice as much data, is being introduced by a giant multinational, has Teac as a supplier etc. But, Sony's HiFd 200mb being a Zip Killer is complete perception. IOM shipping 1,000,000 drives a month is reality. This is where the bias lies. Indications are that Soros fund management has doubled their position, ditto for Fidelty. A short squeeze is almost imminent. Steve