DRIV (DIGITAL RIVER). Get in on internet IPO. Message Board

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Technology Stocks : DRIV (DIGITAL RIVER). Get in on internet IPO.

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To: M. Frank Greiffenstein who wrote (2737)	10/25/1999 6:42:00 PM
From: Charlie Smith	Read Replies (1) of 3198

Frank: Gross margins awful and unchanged. Their e-commerce software sales a tiny fraction of overall sales. It is becoming less and less clear how DRIV (and BYND) will ever make any money with this business model. I also continue to wonder the wisdom of booking the entire software sale as revenue You do not understand "gross margin". It's net sales minus cost of goods sold. DRIV books the "entire" sale because it comes right back out in cost of goods. The publisher books a sale to DRIV (which becomes DRIV's Cost of Goods) and DRIV marks it up like any retailer. Sustainable gross margins in the 20 percent range (DRIV was at 19% in the quarter, UP from 16.3% a year ago, not unchanged as you stated) are actually not bad for a retailer with no selling floor. For comparison, the average "bricks and mortar" retailer has GMs in the 26% range. Charlie

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