Egghead Computer (EGGS) Message Board

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Technology Stocks : Egghead Computer (EGGS)

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To: Bo Didley who wrote (2823)	10/13/1998 12:56:00 AM
From: Street Walker	Read Replies (2) of 8307

Company Update: ----combine this with TA and we have a winner ! Company Update from bigdogsf (yahoo msg board) Oct 12 1998 11:57PM EDT Believe it or not, after leaving a message for George Orban four days ago I received a return phone call. I spoke to him at length (about 20 minutes) and learned a number of very informative facts. 1) According to Orban, next to amazon and onsale, egghead.com is the third largest pure e-commerce company at the moment (larger than cyberian outpost and beyond.com). Funny how egghead's market cap is below both of these companies. 2) The company has much more cost reductions in terms of people as it transitions off of its old systems and onto a new one requiring less corporate overhead. The g&a will continue to decline over the next two quarters in absolute dollars. 3) The company is adding many new categories as its auction site expands. 4) Orban believes the company will get formal coverage some time in the next 3 months as the company reports another quarter and Wall street takes more notice. The primary reason for the lack of coverage to date has been a lack of potential business egghead could give to a wall street firm because its high cash balance negates the need to raise capital (ie. the investment bankers are not interested in publishing research unless they think there is a deal around the corner) 5) a number of egghead products purchased from the surplus auction site is showing up the E-Bay site. According to Orban he believes that certain wholesalers are reselling egghead products at a markup because the price offered by egghead is so compelling. ( as a note, e-bay is valued at 10x the market cap of eggs). 6) Orban is definitely the right CEO for this business. He is very aware of minimizing costs and he is definitely investing in the business for the long term. While he understood my frustration that the stock price doesn't reflect true value for eggs, he noted that he thought it was absurd how the market was valuing eggs relative to cool, bynd and onsale. Without saying it, he intimated that the "results will speak for itself". He is very focused on the Christmas quarter and sounded very excited about its prospects. 7) Orban did note that the volatility in eggs stock price was mostly linked to hedge funds and speculators trading the stock up and down for marginal gains and this would subside once eggs develops a firmer institutional shareholder base. He noted that he thought amazon was the only company with this type of institutional base at the moment. I think that Orban is an excellent CEO based on his vision and willingness to make the tough decisions. His comments led me to believe that he is determined to do whatever it takes to grow the top line and post a profit in the next quarter or two. This stock will be in the $13- $18 range for sure in the next few months following earnings and coverage. There is no doubt about it. ---------

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