In Business This Week: HEADLINER
KIM EDWARDS: END OF A REIGN AT IOMEGA
HIS SPIN AT THE WHEEL IS OVER. On Mar. 25, Kim Edwards abruptly resigned as CEO of Iomega, maker of the popular Zip disk drive. During his four years, Edwards turned Iomega, whose products offer high-capacity backup storage for PCs, into a high-tech highflier. Driven by heavy spending on catchy ads, sales skyrocketed to $1.7 billion from $141 million, and Iomega's stock became a Wall Street darling.
But the company has been losing its luster. On Mar. 16, Iomega told Wall Street it would likely post a loss of $10 million to $25 million in the first quarter, thanks to tough competition, high marketing costs, and a slump in the market for peripherals.
Edwards' marketing budget was already a sore point with investors. In January, when Iomega reported lower fourth-quarter earnings, Edwards told analysts he would more than triple the budget to $100 million. Iomega's shares fell 31%. On Mar. 25, the shares closed at 7. Edwards couldn't be reached for comment. Taking over for now is director James Sierk, most recently a senior vice-president at AlliedSignal.EDITED BY KELLEY HOLLAND