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Technology Stocks : Egghead Computer (EGGS)
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To: Big Dog who wrote (6234)1/26/1999 5:24:00 PM
From: Scott Williams98  Read Replies (1) of 8307
 
Positives/Negatives re:EGGS

Kinda what I expected based on the recent trading and increased short positions in Dec...no real surprises here. Let's break it down a bit.

Some good things:
3rd Q. rev's increased 77% over same period last year.

Nine months revenues increased 94% from nine months last year.

Registered bidders on auction site increased 35% from last q.

At end of year, EGGHEAD.COM ranked 7th most visited sight on entire internet by at-work/at-home visitors (good exposure).

Company has $59mm in CASH.

Some not-so-good things:

3rd quarter sales increased just 19% over 2nd quarter (compared to
UBID's increase of 58% for example). I was expecting much stronger increase...

Margins in 3rd q. dropped to 8.0% compared to 10.6% in 2nd q. OUCH..(The "increase in the company's aged inventory" was the stuff they were probably "Blowing out" on their last e-mail to customers on Monday..<g>)

My guess short term:
We'll see a sell-off tomorrow and maybe through weeks end (hope I'm wrong!). Within a few weeks, we'll get some analyst coverage to boost the stock (doubt it'll be a "strong buy").

I sold half my position earlier in the day, but plan on holding the rest through '99. EGGS should do just fine. Personally, I had a pleasant experience shopping EGGS on-line and plan to be a repeat customer. I love the auction sites.

Any other opinions?

Best of luck SCOTT

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