Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Ariba Technologies (Nasdaq-ARBA) -- Ignore unavailable to you. Want to Upgrade?

To: Spytrdr who wrote (1191)	9/25/2000 6:14:04 PM
From: Bruce Brown	Read Replies (1) \| Respond to of 2110

Really? Dell's profit margin has historically been between 6 and 9%. Based on their annual revenues, how do you come up with 'billions in profits'? Last year Dell's net margin (profit margin) was 7% and the gross margin was 21%. Good news? The cash king margin was 14%. Revenue growth rate? Dell's in the 30's now. You mention the lack of profitability for Ariba. All the cash flows - CFO, the OCFM, the FCF and the CK Margin - are beautiful. Believe me, with the numbers they put up in these metrics profitability is coming and it's coming soon. They've been cash flow positive for 12 quarters. Combine that with Ariba's conservative accounting practices which understate the revenues (38 - 50%) and the company looks a lot better than if you just scratch the surface. Deferred revenues of $154 Million. Gross margin was at 83% last quarter. Revenues were up 101% from the previous quarter and 578% from the year ago period. I was an investor in Dell between early 1995 and the week after Christmas of 1999. That was an amazing growth story and shareholders were rewarded well. Granted, the market cap of Dell in 1995 was well below Ariba's $40 Billion, but Dell had no proprietary technology outside of their direct business model and manufacturing supply chain (thank you i2 Technologies). You may very well be able to make some money in the short term on your position trade. The potential in the longer term could take Ariba to the front of the pack where it will be one of the leaders of the Nasdaq this decade just as Dell was in the previous decade. You've had six chances in the past month to take some profits in the low to mid $140's. What happened? the wholesale dumping going on at INTC is a bit frightening. Not really. Reality that the PC technology adoption life cycle is very mature rocked through the royalty plays like Compaq, Dell, Gateway, Micron and others sooner than it did Intel. This is perhaps one of the check points as we saw so much money run into the 'safety' of the large-cap horsemen during the meltdown of the market earlier this year. The money is simply rotating into tomorrow's leaders and other areas of the market. That's actually a healthy thing. Very healthy. It won't stop all the chatter about the key support levels of Intel, Cisco, Microsoft, Dell, Oracle - blah, blah, blah. However, I think Ariba will continue to get some of that investment money coming its way going forward. BB