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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (39437)	12/28/2000 1:24:06 AM
From: JRI	Respond to of 42787

RIMM vs. Gateway...thought this might be interesting... Market cap: Rimm, 5.52 B Gateway, 5.98B Sales: Gateway, 9.8 B annual (as of end of next quarter) Rimm, 220 m annual (as of end of next quarter) Profits, 2001: Gateway, yes....Rimm, not really (small)... Cash on hand: Gateway, 900m....Rimm, 700m Year-over-year sales growth, last quarter: Gateway (about 20%), Rimm (about 165%)....expected sales growth for 2001- Gateway (about 10%?), Rimm (about 100%) Q-o-Q sales growth (most recent): Gateway (19%), Rimm (45%) Approximate market share: Gateway (7-8%), Rimm (10%) Conclusion: Either the market is expecting the overall market for PDA's in 10 years to be bigger than PCs now (???), or that Rimm is going to dominate its much larger PDA rivals (Palm, Motorola, Sony, etc....)AND cellphone is not going to compete with PDAs..... OR Rimm is overvalued relative to Gateway....(Rimm should be so lucky to have Gateway's 10B in sales in 10 years....if so, will it also have Gateway's 5.98B valuation? That would make it a pretty lousy long investment now...no? Why are PDAs margins going to be any better than PCs margins are now or any other consumer electronic device .....Those current 40% margins should shrink precipitously going forward....) Note: I am thinking about shorting RIMM as soon as it loses some price momentum....I can see no reason for this inflated valuation....over 300x earnings and 25+ times revenues...