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

To: Rocky Reid who wrote (43722)	1/17/1998 3:39:00 PM
From: Cogito	Read Replies (1) \| Respond to of 58324

>>>In the latest conference call, KE said the split was to permit the continuation of stock options incentives that would attract top talent.<< This is what makes no sense. Does Iomega management think that their employees are idiots by thinking they are getting twice as much money by offering them 2000 shares @ $12/share instead of 1000 shares @ $24/share?<< Rocky - Unsurprisingly, in your headlong rush to place a negative interpretation on every single thing Iomega does, you have missed the point completely. The idea is not that current employees are supposed to believe that their options are worth more. The idea is that instead of having, say, 1,000,000 shares available to distribute to NEW employees as options, they now have 2,000,000. Therefore, they can offer each new employee 10,000 shares, or whatever, and they won't run out of available shares as quickly. (The exact numbers are not what's important here, it's just the concept.) Remember that Iomega is growing as a company. They are hiring at a rapid clip. In order to attract the top talent, they have to be able to offer attractive options packages. The split doubles the number of shares that are available for this purpose. Moreover, it does this without diluting current shareholder's equity. The split was, therefore, a conservative move by the Iomega Board. I do agree that it did not help the momentum of the stock price. But when the decision to split was made, the price was over thirty. The Board had now way of knowing that the asian crisis would bloom, killing the upward momentum of the market in general, including IOM. The Board could have reversed the decision and not done the split. I think that there are two reasons they didn't. First, it would have looked pretty funny. Second, the Board is not enormously concerned with short-term price movements. Their responsibility is to long-term investors, not short-term traders. As long as they continue to work toward building earnings over the long haul, I'm in. - Allen