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Strategies & Market Trends : Value Investing
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To: Michael Burry who wrote (6208)3/5/1999 2:50:00 PM
From: Bob Rudd  Read Replies (1) of 78476
 
I agree with Jeff, that CPU is particularly vulnerable to Net competition and their customers will go to the net quicker than other, less sophisticated customers. They even encourage customers to do so by having thier own online store and a build-to-order PC program in the stores or from the net. Meanwhile, other big box retailers like Best Buy will take potshots at best selling items while not stocking a lot of the slower stuff.
On Computer City aquisition. They buy a bunch of stores then close a fair chunk of them... Let's say there were 6 chain stores competing for computer business in a 5 mile radius: Compusa, computer city, Best buy, circuit city, Office depot and office max. Compusa buys and closes the computer city store. Do all of city's customers automatically default to compusa? Nope, Compusa gets 20% - 40% of them while the other guys get a boost at no cost.
This is not to say that their's no room in market place for bricks and mortar computer super store... this situation bears watching.
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