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Technology Stocks : Brightpoint - CELL
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To: Brian Lempel who wrote (337)1/18/1998 11:47:00 PM
From: David G.  Read Replies (1) of 1999
 
Brian, Brightpoint provides contract financing to its customers. They have strict credit requirements. It is one of the many value-added services that Brightpoint is providing to its customers, and Brightpoint has told shareholders that it intends to expand its higher margin value-added services to increase revenues, and despite what these guys think, wall street likes the innovative strategy. CLST does not do this, but CLST has said that they intend to (so these guys complaints today are CLST's fuzzy vision of the future). The financing is paid back at prime+2 points which represents a 10% margin. Deals are closed faster when vendors facilitate contract financing.

Despite the fact that there is some overlap of distribution of manfacturers between CLST and CELL, the fact remains that Brightpoint's market share is growing while CLST is eroding. CLST has some good carriers and will probably even lose a few to CELL over the next year. Either way it's flat or decling growth for CLST over the next year, and continued growth for CELL.
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