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: Bill Lin who wrote (53119)	4/20/1998 12:28:00 PM
From: s. bateh	Read Replies (2) \| Respond to of 58324

Update: Ingram has updated the price on the atapi 5pks, and they are selling like crazy(in other words a lot, like 123 5pks this morning already)and they are out of the zip+ drives, sold them all as i posted on saturday, just noticed that they sold 37 jaz20pks of disks today as well, good luck to all.

To: Bill Lin who wrote (53119)	4/20/1998 1:32:00 PM
From: Jock Hutchinson	Read Replies (2) \| Respond to of 58324

Bill: Your response is required on this thread rather than the repeated verbal assaults from a variety of punks that inhabit this thread because they thought they were going to make easy and quick money. As you know, the huge money in Drives is made working the cycles-Buying at the bottom and short selling at the top. If IOM does stay around it will be just such a company and a joy to trade over the course of its various cycles. Of course for the emotional immature, these swings just become too much. I obtained the historical data on Seagate and Western Digital from Value Line. I merely calculated the sales ratio to the high and low prices for the year. If one takes forward looking numbers in stock prices to the next years sales the ratios still support my position unless you take last years high on Seagate of about $58.00 and this years current revenue projection. In prior posts you have done a very good job of noting that the cash flow problem is an inventory problem; is a raw material problem, which does soften the issue of negative cash flow to some extent, since at some point in time the raw materials will get used if there is any kind of market for the product. But in my experience this scenario is never viewed as a plus, especially for a company that touts itself as a growing dynamic company. And in the dynamic world of storage, I would hate to sitting on my money in the form of raw materials when I could be spending hard cash on developing new products. Your best case scenario is that these raw materials get used. My experience tells me that over time there is a further write down of these raw materials if only because the product mix changes. I won't challenge your assertion that there is a need for the100Mb disk. But I am certain that there will always be a need for the current floppy because God forbid no one wants to lose that much printed work that one could lose on a Zip. If Rocky loses fifteen minutes of a commercial because he misplaces a Zip, he is going to be very angry. If a lawyer loses two years of briefs that he has stored on a Zip, his career will end. So for the printed (inputted) word, Zip is an excellent backup, and might even be used a second time as backup. But it will never be the point of origin for inserting one's writing. Currently Zip size drives have a wonderful role for downloading certain size files off of the Internet, but downloading Diablo takes up to one half of a Zip drive, and there is no question that over time files that are multimedia will increase in size thus relegating Zip to the backburner. For some purposes, the Zip is too big and for others, it's too small. It does and always will fit a certain niche, but at its current size the niche it will retain is backup for printed material and small files, and the niche it will lose is large-scale multimedia storage. But the problem within that stronger niche is compatibility. I have never heard a word from IOM about their plans for making a compatible floppy drive or disk, and that is THE huge market for a disk that is Zip size. You so often hear the constant blather about an installed base of 12 million Zip drives. Big deal. How big is the installed base for floppies? 200Million? Now be honest Bill. Why would anyone want to install a Zip like drive in his or her computer if there was a product "out there" that didn't require such installation, but provided the same amount of storage? Please educate me. You mention Sony. Sony is going to be selling yen made products for American dollars. There is no way on God's green earth that IOM can compete on that field. I would add that you failed to address the issue of why anyone would want to invest in a company that cannot forecast its sales for the next quarter, but can assure you that in three quarters it will make a profit. It makes no sense. This reminds me of the situation in early '97 when USRX had a nice slice of the modem market, but like IOM , it had a huge inventory of products that would become out of date with increased bandwidth. Like IOM, people in at the right time got filthy rich on the stock. Like IOM, USRX had a "huge" installed base and customer loyalty. But Casey Cowell knew that the handwriting was on the wall. He knew that he needed additional "muscle" and sold out to 3Com. As we all know, the deal worked poorly over the short-term for COMS. IOM is in a much worse position right now. But what makes its choices ugly are the lawsuits. You have approximately 250 million shares of IOM. Truly superior law firms are going to make a very strong case that the price of IOM was manipulated at least four dollars a share, which equals a total liability of over one billion dollars. Do you think that a company such as Seagate with its stash of one billion is cash is going to throw their hat into that ring? No way. Bill, when I invest in a stock is I want a 1:3 risk to reward ratio. IOM may survive, but at best, it's only a one in three chance of doing so. Do you really feel it's worth your hard-earned money? If so, please let me know why.