Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: torquatus who wrote (13449)	6/13/2000 1:42:00 AM
From: RockyBalboa	Read Replies (1) of 18998

Maybe now? After Reel.com is dead dog? Though, a time back, Mr. P$nk said: Message 13505975 dailynews.yahoo.com In fact, it was high customer-acquisition costs that may have played the biggest role in sinking Reel.com. The company had enjoyed rapid growth with revenues last year reaching $40 million, from $7 million the year before. ``But because we were in such rapid customer-acquisition mode, we had to sell our videos very cheap,'' explained Chief Financial Officer David Martin, who said the company had operated last year at a negative 13 percent gross margin. Although it had managed to nudge margins back into positive territory this year, they were never sufficient to cover hefty spending on advertising and infrastructure. ``A year ago that was all fine,'' added Martin. ``The markets just told us to grow, grow, grow. We did everything we were expected to do.''

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