Benny --
It's a cool little company. Check out their website, sign up (use 11023 for a zip code (Great Neck, Long Island -- it should work ok), and give it a test drive.
Do some test shopping, without submitting the order, and tell me what you think...Make sure you try the "favorites" list, etc., and read through their online help (which details their cost, policies, etc.).
Also, it's worth looking back a thousand or so messages on Yahoo's board (which has recently become almost unreadable due to distortions from shorts and the like). "Online Grocery Watcher," "Busy_chicago_mom," "Mugspod," "Foolish", "NYFineman," "CPA-Logic" and some others are definitely worth reading for their opinions and insight. "BG" (who also posts here on SI) recently went short some shares, and is one of very few "contrarian" posters worth reading.
You're right on about the costs, but their move to a wholesale-based automated warehouse picking model should help them to scale up and earn some margin.
In my ever-humble opinion (borrowing freely from Mr. Lynch) -- if it makes your life easier (at a reasonable price), people will line up for it. I know I will when it comes to Northern NJ (supposedly sometime soon). I would pay alot more than $5 bucks an order to have a full fridge and not have the hassle at the supermarket.
Also, the fact that they may never reach profitability may not hamper the stock's potential. Think about Ticketmaster/CitySearch or WalMart buying these guys somewhere down the road just to bundle their products along with your weekly grocery delivery (not to mention acquiring the potentially huge revenue number from Peapod's business to consolidate with their own (even if the underlying margins aren't so spectacular)...
Just random thoughts, although this one is MUCH, MUCH more speculative than the current favorite stock to own...
Good luck -- I could be wrong, but I think time is on your side in terms of timing an entry point on this one.
RK |
