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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion. -- Ignore unavailable to you. Want to Upgrade?

To: javajake who wrote (45212)	4/28/2000 6:34:00 PM
From: myturn	Respond to of 150070

EGGS article a must read for those who are sitting on the fence. Look for this one to move up. Trading up in after hours. streetadvisor.com Egghead Not Whipped Scott Greenberg Apr 28 2000 Investing in Internet companies without taking into account its cash position is obtuse, and some of the thanks?or blame--for this perspective can go to Barron?s. Unfortunately for many investors in Internet stocks, Barron?s was more intent on contaminating the Street with its bearishness, as opposed to getting the facts right. Many of the companies that appear on Barron?s infamous burn list are far from bankruptcy, as they continue cutting costs and increasing cash through financing. This is especially true for Egghead [EGGS], and I maintain my buy rating on the stock. In the company?s latest quarterly results, sales were decent, and margins improved. More importantly operating expenses decreased by 64 percent sequentially and customer acquisition costs fell by 52 percent. I view this as substantial progress, which can lead to profitability--as well as evidence that Barron?s #17 ranking of Egghead in its ?soon to run out of cash? list is wrong-headed. Taking into account the company?s balance sheet, Barron?s is the entity getting burned--not Egghead. At the end of its first quarter, Egghead had $64.8m in cash, cash equivalents, and short-term investments. Adding an additional $23m that the company received through an equity sale to Acqua Wellington earlier in April, this amount grows to $87.8m. Taking into account the additional shares offered, Egghead currently has $3.87 per share in cash, valuing Egghead?s entire business at 75 cents per share. Digging deeper into the numbers, you realize Egghead is not going to be out of cash in three months, as Barron?s suggested. In fact, they have enough cash for over a year (once you take out the one time cost of the Onsale acquisition). (in millions)