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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel?
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To: Erik T who wrote (9353)8/26/1999 8:27:00 AM
From: Benny Baga  Read Replies (1) of 20297
 
>>>>What concerns me is we are nowhere near seeing 50% of new revenues going to the bottom line. Yes they are preparing for big growth (2 million new subs over the next 9 months), but how much will it cost to service the next 2 million? And the 2 million after that? With the need for so much customer service support, when do we see the 50% margin on new business?

Couple things. Clearly the '50% to the bottom line' has changed with their increased spending/expenses. And you have some very good questions about When?

IMHO, you really have to look at this stock like a long term investment. Hell, if I was looking for a fast buck I would be surfing the IPO market. IMHO, When will come when...

1. CheckFree adds 2 million subs, but the new subs account for less than 20% of the total subs.
2. A better adoption of E-Bill which greatly reduces (but not totally) the cost of customer care and the # of customer care reps needed per # of subs.
3. Down the road is Business to Business EBP, with is a larger and more profitable market.
4. The price of a stamp hit's 50 cents (after better adoption of E-Bill).

IMVHO, you have to look at AOL a few years back and then realize that CheckFree is a long term stock, no matter what the short term stock price does.

Benny.
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