I've been giving thought to the "repeat customer" issue. Is it better for ONSL to be showing a lot of repeat business, or would it be better if, say, 90% of bidders were new?
In the beginning, all bidders were new (i.e., 0% repeat customers). Then as time went on repeaters arose, and now it's up to 70%, they say. I don't think this rise is a good sign for the company! If you think about it, once repeat customers gets to 100%, they're attracting zero "new" bidders.
It would appear to me that the vast growth in this business is in generating new customers (as opposed to striving for more sales to existing costomers). Once new growth dries up, the company is mature. And the stock's multiple to sales or earnings (or whatever) contracts. I suggest this company is much farther into the maturity phase than people realize. It's never going to be a billion dollar machine.
Short where it counts,
The Stagg |
