To: sheila rothstein who wrote (51196 ) 3/25/1998 5:40:00 PM From: Jock Hutchinson Read Replies (2) | Respond to
IOM is a diamond in the raw You got that right doctor . A diamond in the raw is Methane, and Methane is sewer gas. I notice that you have been an investor for all of one and one half years, so let me fill you in on how stocks ultimately are valued. Like it or not, IOM is in the storage business. While its products are covered by various patents, its products clearly do not have the technological sophistication of products that are made by companies such as Seagate, Western Digital and even Quantum-companies you have wishfully pandered as takeover candidates of IOM. The traditional way to value storage companies is by a ratio that consists of the Price of the Stock to the Price of Sales. Currently Seagate is selling at a ratio of two dollars to three dollars (Price of Stock to Price of Sales) WDC and QNTM are selling for one dollar to three dollars. Using a similar valuation for IOM would place it in the price range of $4.25 a share to $2.10 a share. And to repeat, IOM has a less technologically sophisticated product than these other companies. You asked Rocky why other companies are quickly gravitating to this business. That's easy. It's the margins--the unsustainable margins that IOM relied upon to drive the price of its stock up, which Kim Edwards sold, which you are all currently holding for a loss that will surely increase before it has any chance of going higher. That's the whole point of Edwards' campaign. He knew that if he couldn't develop brand loyalty, he had no chance of sustaining margins, and it is very obvious that he failed. Now we have a bunch of Iomaniacs looking like Bambi staring down at the headlights of an eighteen wheeler--people who are among the least civilized on the entire SI boards. The same people who have provided enormous entertainment to the world while mumbling something about Ingram. Oh. Lets not forget about the fact that a very much commodity product such as this is going to be made very cheaply in SEA. To effectively compete with the devalued currency, people in Roy will have to work for wages comparable to what the homeless make selling the newspaper "Steetwise" in Chicago. And folks, America is at full employment. Here is the real challenge for the new CEO. What does he do with the surplus of cash. Does he squander it on some useless ad campaign? Does he continue to accept the mounting losses? Or does he sell out the company at a fair price of about four dollars a share to an interested buyer? If he does, justice will be served. For the truly long term investor will have realized a one thousand percent return on her/his money over a period of less than three years--a tremendous return for the truly astute investor. And at the same time, the talking head quick buck artists who are late in the game will be punished again by the market--victims of the next Zitel, Presstek etc.. Finally, you and the other very clever people on this board can make as much fun of my name as you wish, but I spoke with the University of Chicago today, and if you wish to obtain advice on your obvious ethical violations, I will be most happy to provide you with the phone numbers of some of the most respected medical ethicists in the world. What you did was a disgrace, and you should be ashamed of yourself and the way in which you cheapened your profession.
