Well, I don't know too much in reallity, but I have been a follower of CPU for years. I don't think its going bankrupt, but it does have razor thin margins, so a downturn in sales hurts. So we have the situation that;
1) Cheap computers are the rage now. These produce lower profit margins so this hurts the bottom line.
2) There is nothing coming out in the near future that is a "must buy" for the computer users like Windows 95 was. So sales are not being driven.
3) The entire MSFT thing is hurting the sector, especially if Windows 98 gets held up.
4) We are in the traditional slow season.
5) The Comp USA computers have had some problems getting started, which has hit the bottom line hard.
So put that together and you get a pretty sick sales forcast, hence the stock downturn. Now, for the future, this could very well be a buying opportunity because:
1) Cheap computers are entry level only, and they are, for the most part, not scalable. Hence when more power is needed, people will probably upgrade to the newer more expensive computers.
2) School will be starting soon, which starts the normal busy season that goes till Christmas.
3) The Apple store within a store concept seems to be working. And Apple seems to be recovering. Since CPU is the sole retailer, they should benifit.
4) The MSFT thing will be resolved as far as Win 98 goes soon, so that should go away.
5) People have money to spend, so they will.
OK, thats my two cents worth. I'm buying down here. We can weep together or sing together, depending which way it goes. But you will have to wait for about 6 months to see. |
