Gateway (GTW) Message Board

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Technology Stocks : Gateway (GTW)

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To: Marc Newman who wrote (6072)	7/8/1998 7:52:00 PM
From: Kory	Read Replies (1) of 8002

Amazing that so many who would post here still lack understanding of the country store. Whether you are long or short, at least understand what the companies operating methods and objectives are. Gateway's objective in the country stores is to generate market image, brand awareness, and sales leads without stocking inventory. It is really a unique form of advertising - not an attempt to enter the retail market. As I said before, if Gateway nails another quarter, the short-term mentality on Wall Street will likely begin to believe that Gateway has finally mastered the direct-sale method (ala Dell), and could possibly start valuing Gateway with similar PE's. Gateway's attempt to move to higher margin services revenues (Internet access, leased computers) is very similar to GE's strategy of moving away from simply being a manufacturer. Add to that the talk about Gateway becoming an Internet player, and shorting this stock is extremely risky IMO. I am not implying that I believe that Gateway is undervalued. On the contrary, even though I am long, I will not add to my position at these prices. For those with high risk tolerance - bet at your own risk.

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