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Technology Stocks : Cyberian Outpost (Symbol: COOL)
COOL 0.103+10.6%Sep 5 5:00 PM EST

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To: Stallion who wrote (1086)2/5/1999 2:26:00 PM
From: JudgeJudi  Read Replies (1) of 1932
 
I do understand the difference between net and gross profit.

Cools gross profit runs at 10 percent of sales(which, for a retail business is amongst the lowest going). Its competitors like compusa and microwarehouse run a full 6 points better, although those margins are moving down quickly in the face of onsale and others.

I understand that with gross profit at 10 points, and marketing and other operating costs running close to 40 points, EBIT runs a negative 30 points. Great business, the more you sell, the more you lose!

I also understand that when the CEO tells you he can increase GP in the face of such intense competition, it is just pure BS. I understand michael porter teaches at HBS and has never sold a computer in his life.

Regards.
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