UBID - an IPO spinoff of Creative Computers Message Board

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Technology Stocks : UBID - an IPO spinoff of Creative Computers

UBID 3.000

0.0%

Jan 21 4:00 PM EST

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To: jjs_ynot who wrote ()	12/27/1998 2:06:00 PM
From: Steve Lin	of 581

To all, I think the key factor here to consider when trying to compare it to eBay is its growth possibility. While eBay sells everything under the sun, UBid sell surplus computer equipment and accessory. While eBay facilitates buyer and sellers and takes a % of the sale, Ubid buys from the seller and assumes the risks of devaluation and the cost for inventory. A gentlement few posts back said it was ludicrous to think that the differences between the business model matter. I respect your opinion. However, I think it is very clear that UBid's modus operandi is drastically lacking growth potential. The main reason Amazon and eBay's shares have soared is because investors expect exponential growth - a growth rate that is enabled by the business model. Amazon became the 900lb gorrilla when it became obvious that its brand name is incomparable and when it became obvious that Amazon will sell whatever it can to take advantage of that brand name power. eBay was supported by the analysts because of its business model that will allow it to sell virtually anything and still able to grow exponentially. Now, how fast can Ubid grow selling surplus computer equipment that incurs inventory cost and risks. What happens when there is no buyer for the stored inventory? What happens when there is demand for items that is not inventoried? Not only does UBid have risks and costs with this model, it will also lose opportunity when it can't keep up with the demand. How fast can it grow under this model. I think UBid may decide to change its model. But maybe not. It may not be able to compete in the large marketplace and decide to hold on to its niche - computer surplus equipment. Afterall, these are the PCMall and MacMall people. They have an edge in this niche. Go outside to it, you face intense competition. I think it is dangerous to assume that UBid will change its business plan at this point. It is better to assume that Ubid will stay its course and stay in the niche. For those of you who have not go through UBid's site or don't understand its business model, you may want to do that. For those of you who have and already come to your conclusion, my hats off to ya and respect your conclusion, whichever it is. ubid.com best wishes to all, steve

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