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Technology Stocks : CLST - CellStar Corporation -- Ignore unavailable to you. Want to Upgrade?

To: emil who wrote (222)	1/15/1998 10:34:00 AM
From: JBruin	Read Replies (1) \| Respond to of 641

Perhaps because of the relatively severe dilution of earnings. Primary earnings were .57 but diluted were .52. Where did the extra 2.7 million shares come from? Maybe Wall Street is questioning the motive behind whoever sold those. All IMO.

To: emil who wrote (222)	1/15/1998 12:47:00 PM
From: HVN	Read Replies (1) \| Respond to of 641

These guys are being hit by the Asian flu. Just look at where they are set up in SE Asia - and having hired top talent from MOT, they've been pushing rather aggressively there. One of the big ways they have made money in the past is transhipping to SE Asia from the US. Phones are sold at a lower price in the US. They tranship to Asia, where the phones are marked up many times over - historically there have been worldwide shortages of equipment. That's were a lot of the margin has come from. However, that's not the case any more. So, now their margins are down. And they'll get worse as cellular customers start disconnecting their cellular service. See what's happenning in Korea. With the economy in a bad shape, the first thing customers are doing is disconnecting cellular service - latest reports indicate that it's happenning in the tens of thousands. When customers disconnect, not only does CLST most probably lose residual revenue on the service(if they were getting any), but the market has the potential to be flooded with 2nd hand phones (refurbished phones) - something CLST does not sell. It also means that less people are activating. As a result, not only does CLST sell less phones, but the phones they sell, have to be sold at a lower local price - means a hit on $ revenue and earnings. And that's only Korea. I see no reason why this trend shouldn't start hitting the other markets. I think CLST is going to hurt a lot more later this year.