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: Steven Seefeldt who wrote (51964)	4/5/1998 10:37:00 AM
From: Mel Boreham	Read Replies (2) \| Respond to of 58324

Steven, I just responded to one of the folks over on the Motley Fool board over the response I recently sent to you about my glimmers of hope for Iomega's stock price an KE's list of problems. Anyway, here is my response... Repost follows: Subject: Re: Good News Author: WSProspectorÿÿÿ Date: 4/5/98 10:13:59 AM (ET) Mafisoi, Sorry to take so long to get back to you, but weekends seem to be the main time that I have to work on this sort of thing. My glimmers of hope may be pretty faint at the present time with so many unresolved problems and much bad news coming to light every day about new law firms seeking more plaintiffs for the court case against IOM and its upper management. My main hope is that the new management will be able to get things turned around before the competition has time to really take a good piece to the removable storage market. Right now there are a few vapor threats via Sony and Orb, but it will take some time to overwhelm the marketplace where IOM now has a huge lead. I would not be surprised to hear that Iomega has shipped over 14 - 15 million Zip drives and untold numbers of Zip disks at their next conference call on the 16th of April. I know the figures mentioned over on SI by persons in the wholesale market indicate that the Jaz 2 is selling very well and that the ATAPI Zip packs are also not gathering any dust on the shelves. As soon as they are received they are shipped out. I am hopeful that we may see much better sales figures than have been projected by the bears. Of course I certainly could be wrong too, as I was caught with over 10K shares myself, so like you I have a big negative figure in my portfolio with this stock. The problem with the split is that for each point drop you loose twice the amount that you would have pre-split. I know the market is supposed to make up for that by keeping at about the same percentage moves based on the value of the new stock, but it really did make things worse. A new, respected CEO would help and was glad to see that they have gone ahead with the appointment of a new COO with good quality control experience with Dell Computers. When they talk about new paradigms in the market, we are right in the middle of one right now. The sub-$1000 market is really having a big effect on OEMs decisions to take on anything that might affect the bottomline. They are attempting to find just the right "sweet spot" for improving sales. The old idea of keeping prices at the $2,300 mark and just giving the customer a bit more in speed, memory size, and new sexy peripherals like DVD players, 3D-game cards, etc. is now out the window. We will see how long this new way of selling computers takes before the marketplace demands more expansion capability and is willing to pay more for it. Right now we are going to have to wait to see how this new scenario pans out. I still think that removable storage is a very logical thing to have, I know I really appreciate having a Zip in my new NEC computer when I download files larger than can be easily stored on floppies. Hard Drives tend to fill up pretty fast and it will take some months for the new buyers to get to the point where having a Zip drive really has appeal I see the Clik! drive as an excellent new product if they can bring it to market on schedule and if it gets good reviews from the computer mags and other testers. It certainly could be excellent for the forthcoming digital photography market. I think we will finally see prices and camera resolution meet at a good price point about the time for the Christmas buying season. If Clik! can be there at the same time then Iomega will certainly have a practical solution as compared to Flash Memory cards at about 1/10th the cost. I realize the battery drain will be a problem with any electro-mechanical device, but after all the drive is mainly for dumping photos from the camera's flash card so it could be in a "sleep" mode most of the time. I'm sure that IOM engineers are working late nights and weekends to get the kinks out before this summer. I look forward to a real push on the Clik! about the time the NY Computer Expo takes place in June. Iomega has used this show in the past to show off new products and I would imagine that this year will be no different. The next conference call will be an interesting one now that KE is no longer at the helm. I do hope that they can put some positive spin on recent developments and hope that their legal staff is up to beating down the current spate of class action suits. So does any of this give one hope for the future price of IOM stock? Glimmers are there, but only real world actions can help. Iomega needs to regain respect from the investment community and a new CEO with better communication skills would help. I still think that we will see some new products released later this year, especially a higher density Zip drive with possibly a USB connector. This would make it much simpler to connect to the new lines of cheap computers. I think that most come with USB connectors, although this mode of connecting peripherals is not being pushed at the present time. Lower prices may be in line, especially for the media and the thought of including some sort of value added programs to the box of disks, such as they have done with the Recordit program in the color disk 10 packs. Throwing in an extra disk with some really neat programs would also be a come on if the program was really useful, such as Norton Rescue Pack, Anti-Virus programs, Voice Recognition programs, PDA programs, and maybe even some good games for the family. Who knows what would work best, but lets get some bright folks in marketing working on this. Last, but not least, get a new ad agency! The TV ads were not very well focused on why someone should go out and buy a Zip drive. Still think that advertising should be done, but they really need a new way to look at why someone shoud put down the bucks to add a Zip drive to his mail order computer or add one to his sub 1000 bargain box. I may be wrong, but I will continue to hold even though it could get worse before we see any interest in the stock. It has been hurt, abused and is bleeding at this time, but maybe with a "transfusion" of new blood in upper management we will see a recovery to the pre-split levels again before the end of the year. Stranger things have happened. I have seen stocks make amazing recoveries in the past and have wished later that I had held rather than taking big losses. Just hope that this will be one of those that will respond sometime later this year. Wish I had more than the above to add. Will just have to wait until the CC on the 16th. Mel