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

To: jwk who wrote (45409)	1/24/1998 6:23:00 PM
From: Milo Klanke	Read Replies (2) \| Respond to of 58324

I normally eschew posting to these forums, and this one in particular but I am dismayed at some of the comments directed at KE. In my opinion he has succeeded brilliantly to date and done exactly what he was hired to do. He has been criticized for not giving "the street" enough guidance. I think that giving too much "guidance" only opens one up for liability in the form of shareholder lawsuits, while offering no substantial long-term benefit to the company. There is much criticism of the timing of the split. This is perhaps valid but I consider it to be a minor issue of little long-term consequence. Finally, the issue of the announced $100 million marketing campaign. My view is this: The overall plan for the zip drive calls for making it the removable storage leader far into the future and building a mass market for removable storage. The zip drive is unquestionably the market leader at this time. The mass market does not yet exist. Most home computers still have no removable storage other than floppies. Iomega has been satisfying pent-up demand from relatively sophisticated users. Now is the time to expand the market. The first step in any consumer buying decision is recognition of a need (Marketing 101). The ad campaign is designed to build awareness among the vast majority of neophyte computer users that they have a need and that Iomega products are the best way to fill that need. Is it a bold undertaking? Yes. Is it necessary to take Iomega to the next level and eventually become a true standard? Yes. Does it entail a huge risk? Again yes. (and of course the market hates risk and requires a greater return to undertake it so the stock falls) Will it work? I choose to look at Kim Edward's background. Before Iomega he was a VP of marketing at GE. If there is a better training ground for executive talent than GE I don't know where it is. As a business student everything I know about marketing tells me this is the right move at the right time. Sometimes you just have to trust your instincts and your vision even if the entire market has turned against you. I have been a student of business all my life and recently returned for more formal education. I have followed Iomega closely since mid 1995. To go from $200million to $1.7 billion in revenue in 3 years blows my mind. Positive cash flow of $132 million!!! Look at ROE and tell me this company deserves a trailing PE of 20. Am I merely rationalizing an investment decision that went bad? I don't think so. I've been down this road enough with other investments and I have no trouble admitting errors and cutting my losses and running. You need to look closely at your risk tolerance and decide if Iomega is an appropriate investment vehicle for YOU. But don't blame Kim Edwards for the drop in market value. Don't accuse him of "mismanaging" the conference call. He told it the way it was. Regards, consolations, and good fortune to you all, Milo

To: jwk who wrote (45409)	1/24/1998 6:34:00 PM
From: Linda Pearson	Read Replies (2) \| Respond to of 58324

jwk, < You can tell it like it is without telling it like he did.> I think that this sentence sums it up. The same information could have been spinned to sound very positive going forward. There are other CEO's who also plant both feet in their mouth. He's going to have to learn...or start thinking that shareholder value is important. I'm trying to figure out a way to speak to Kim myself. How about some shareholder relations KIM??? DO YOU HEAR ME! This spouting is due to the VAST $$$ that went down the tubes in options and the value of my stock---and in sympathy with all other longs here and those holding worthless options. Frankly, I have to believe that the $100 million ad campaign was devised utilizing pro forma income statements. There MUST have been projections done estimating the potential sales of drives and disks (because of the ads)...and the possibility of future awareness of their products ---which would lead to additional purchases. Actually, when I heard $100 million advertising, I said to myself, this is great! They have needed to build up exposure to people who have not yet experienced the convenience of a Zip Drive. Surely, if they go through X dollars, and the orders have not improved to their mean estimate of sales resulting from the ads....they would back off. Just business. Linda