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

To: Cogito who wrote (41006)	12/21/1997 2:44:00 PM
From: Bearded One	Read Replies (5) \| Respond to of 58324

Here's my opinion of the Conference Call: 1) At one point, someone mentioned that lowering the price of the drive to consumers will help in the long run because of the increased sale of disks. I disagree. Reason: Consider two consumers, Mr. X and Mr. Y. Mr. X is willing to spend $150 on a drive, but Mr. Y is only willing to spend $100. I claim that Mr. X is willing to purchase more $10 diskettes than Mr. Y as well. If this is true, then tie ratios will go down with cheaper zip drives, perhaps radically. 2) Someone assumed Iomega is trading at 20x multiple of future earnings. Earnings, of course, are much more ephemeral than sales. You have to get sales projections correct within a few percentage point to have any handle on earnings. Since I disagree with them on sales (see point 1), I disagree on this item as well. 3) Claim that increase in supply to retail will increase gross margins. What if people want the OEMs now that they are available? That would explain my observations at various stores about slowdown in retail sales. A computer company in the 80's once went bankrupt because they let it known that they were coming out with a better model later. That screwed up their current sales. The same thing may be happening here. 4) Sony being too little too late As long as the floppy drive SLOT is available on the laptops and all computers, it is not too late. They were also making assumptions about Sony's marketing (will sell at too high a price) that may be unwarranted. Overall, their predictions were based on their assumptions just like any other conference call I've heard. Specifically, I heard Emerald Research talk about Zitel (now trading at 1/7th their heighest price). The assumption of the Zitel longs was that the experts in the conference call knew more about the Y2k problem than everyone else. I see that assumption here as well. My assumption is that all analysts who work for companies that trade in the stocks they analyze are paid shills.