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Technology Stocks : Webvan Group (WBVN) -- Ignore unavailable to you. Want to Upgrade?

To: mmeggs who wrote (185)	6/22/2000 3:15:00 PM
From: Wizard	Respond to of 464

yes, your corrections are appropriate. Webvan can/is doing gross margins in excess of 30% - these are not tiny margins and similar to B&M supermarkets. The difference is that Webvan is targeting 12% operating margins, double supermarket margins. The difference is because a large percentage of the B&M supermarket expense structure is people and pricey real estate. Webvan's distribution centers sit on cheap real estate and while they have the selection of 18 supermarkets, the headcount is about 1/3 relative to B&M. This is a major competetive advantage with how Webvan can price and still achieve substantial operating margins. I don't know if 12% is doable or not but WBVN can be a successful company even if it does single digit operating margins. The stock is up a lot today because Goldman Sachs said Webvan will report their quarter at least 10% better than consensus revenue estimates. This is a risky story but customers love Webvan and the B2C environment has been left for dead which really isn't consistent with what is happening at Webvan.