Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

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Nov 14 9:30 AM EST

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To: Bill Wexler who wrote (2572)	7/28/1999 6:41:00 AM
From: RockyBalboa	Read Replies (1) of 10293

EGGS & ONSL ... your favourite dogs: redherring.com What were these eggheads thinking? By Tom Davey Redherring.com July 15, 1999 Although their press release is sunny-side up, the $400 million merger announced Wednesday between Onsale (Nasdaq: ONSL) and Egghead.com (Nasdaq: EGGS) appears to be a desperate scramble to whip up their values. Both companies' stocks had been around a quarter of their 52-week highs, and the merger news edged them even lower. The peddler of closeout computer inventory and the former brick-and-mortar software shop say their combined operation's sales rate is "approaching $500 million." They also expect to rank number one in traffic among online technology retailers. The companies say pooling their resources will eliminate duplicate expenses. They aim to build a single brand around the better-known Egghead.com name and leverage Onsale's ability to convert site visitors to paying customers. Before the merger, neither company expected to show a profit until at least late next year. That shouldn't matter, because the combined companies have a $148 million stash of cash, according to recent filings with the Securities and Exchange Commission. The not-so-good news is that they are burning it at a rate of about $56 million a year, which could still keep them in business a few years by consolidating costs, even if they never make a penny of profit. ...

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