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Non-Tech : Iomega Thread without Iomega -- Ignore unavailable to you. Want to Upgrade?

To: Bill Lin who wrote (234)	6/29/1998 12:58:00 PM
From: dale velkovitz	Read Replies (1) \| Respond to of 10072

<This $21mm is expected to return how much profit?> It is a bit unclear what the actual purchase price for Nomai is. According to the AP Story: <<Iomega agreed to purchase 53 percent of Nomai's stock for $21 million. In addition, Iomega will purchase ''certain technology'' owned by Nomai for another $3 million.>> If this is correct, since IOM is required to tender for the remainder of the public shares as well, the total amount paid to Nomai and its shareholders would be approximately $42.6 million. Nomai is on a 6/30 fiscal year end and the deal is being accounted for as a purchase, so there shouldn't be any impact on the IOM books this quarter. Next quarter the impact on the financials will depend on how much of the purchase price IOM assigns to "technology in process" and "restructuring costs". As of the latest financials available on the Nomai website, Nomai had a total bookvalue of around $8.4 million, subsequent to that date they have raised some additional capital and most likely have incurred substantial operating losses as well, so in all likelyhood the bookvalue acquired will be substantially less than the purchase price meaning that IOM will either book a large amount of goodwill or a large amount of writeoffs for "technology in process".

To: Bill Lin who wrote (234)	6/29/1998 1:03:00 PM
From: Alan Rosen	Respond to of 10072

Bill, I thought that Nomai only had 2 lines capable of producing Zip disks and did not have access to additional equipment, therefore the "threat" was always small. archcc

To: Bill Lin who wrote (234)	6/29/1998 1:04:00 PM
From: Jeff Hayden	Read Replies (1) \| Respond to of 10072

Bill, I think you underestimate the cost of poor perception on Wall Street to the value of IOM stock. While, no doubt, Nomai was a gnat on Iomega's ass, the unfounded worry that the patents wouldn't hold up were part of the drag on IOM. I think management is finally beginning to show a little gumption. On the Street, perception is reality. Jeff

To: Bill Lin who wrote (234)	6/29/1998 1:36:00 PM
From: d-fndr	Read Replies (2) \| Respond to of 10072

Bill, Re: Nomai patent threat Although I respect your analysis, I concluded that Nomai was much more likely than not (3- or 4-1 odds) to prevail on the patent infringement. I think the information contained in the press release is IOM posturing and that, as part of the deal, Nomai was willing to admit in public that it was infringing. Part of what IOM is paying for is this "acknowledgement". Why? To scare off other would-be copiers: if the most aggressive copier "admits" that its product wouldn't stand up in court, maybe Maxell, Sony, Fuji, fill-in-the-blank, shouldn't bother wasting its time. Why do I think that Nomai was going to prevail? IOM lost almost every round in court. Study the California case docs, and you'll see that the only non-compatibility was in some (not all) notebooks. Look at IOM's website and their explanation doesn't say that other disks don't work, only that IOM does extensive testing of other disks. Also, look at Europe, where Nomai has been available in some capacity-I think I saw somewhere about 500,000 disks. If the Nomai disks destroyed IOM drives, IOM's lawyers would have presented that evidence in California and every other court-and they didn't. As someone heavily invested in IOM, I am happy to see this issue resolved for all of the above reasons and because, as Sierk said, I'm sure it was extremely distracting to (and caused a great uncertainty for) management. Every trial lawyer knows that no matter how strong your case, once it goes to the jury, anything can happen.