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

To: RetiredNow who wrote (52999)	4/18/1998 12:43:00 PM
From: Herb Fuller	Read Replies (2) \| Respond to of 58324

mindmelt , Would you mind applying your theory to AOL ? AOL's PE is 500+ at this time . Your theory doesn't take into account Iomega's present and future sales therefore earnings . exchange2000.com Herb

To: RetiredNow who wrote (52999)	4/18/1998 2:53:00 PM
From: Rational	Read Replies (1) \| Respond to of 58324

I am sorry. I was reading the messages in the reverse chronological order. What you are referring to is the standard Gordon growth formula that applies to a predictable CONSTANT growth rate in earnings and risk-adjusted cost of capital. You are assuming a constant growth rate of 10%, a COC of 15% and a current EPS at .35. How do you know that IOM is a fully mature firm with such CONSTANT predictable numbers? You are absolutely wrong in assuming that this is the only formula taught in finance courses. You need to look at models for super-normal growth following sub-normal growth. In any case, all these models need assumptions about the parameters (earnings, COC and growth) that clearly are unknown (precisely) for many companies like IOM, Yahoo!, AOL, NSM, CY, etc. I do not think you should be getting rude based on a clearly wrong presumption on valuation, IMHO. Sankar

To: RetiredNow who wrote (52999)	4/18/1998 7:12:00 PM
From: robert read	Read Replies (2) \| Respond to of 58324

mindleft, iomega has a present fair price value of 10.80, this is going to be its price in a few weeks.

To: RetiredNow who wrote (52999)	4/19/1998 12:37:00 AM
From: Rational	Read Replies (2) \| Respond to of 58324

Mindmeld: I have a simple question. If you believe that the WS is using this or some other valuation model (with due judgement)to determine price, the current price should be the fair price, should it not? The current price reflects the current information about the company and cannot tell what the future information will be. The future price will be determined by the exact future information which is unknown to us now. Thus, all the future price predictions are basically a guess work. However, a growing company with innovative products will have a stochastic price process with a positive drift larger than the rate of interest; unless you believe that the company will cease to exist. It is just some food for thought to help alleviate any dogmatic predilection for future prices. Sankar