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Technology Stocks : OnSale Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Richard G. Woodland who wrote (846)	2/28/1998 4:35:00 PM
From: StaggerLee	Respond to of 4903

>>I think you will agree that we are all 90% repeat customers of the following: Home Depot Gillette Microsoft Intel<< Yeah, but those companies are all hugely profitable, with ROE's over 25%! They never need to add another new customer; as long as they focus on serving their present customer base they'll do well for their shareholders. (Incidentally, I think all 4 are way overvalued, and I bet that on a global basis well over 10% of their customers are first time buyers.) ONSL, on the other hand, is a money loser, but presumably in a growth phase (thus the ridiculous valuation). If only 27% of their quarterly users are new customers, it suggests that they're further along the maturity cycle than a lot of folks believe. (ie., a year ago I bet 75% of their users were new customers.) They'll never be consistently profitable, let alone earn 25% on equity, at this pace. Ever.

To: Richard G. Woodland who wrote (846)	3/1/1998 8:50:00 PM
From: Mo Chips	Respond to of 4903

Richard, You are one of the few grounded ones who seem to understand this company. E-commerce is in its infancy. I a way, this era resembles 100 years ago when mass production made many new people enter the age of consumerism. I view the internet as being nearly as impressive of an era. The end result is we are witnessing the next century's nabisco, ford, gillette, wal-mart, home depot, etc. being born. You are right, it IS NO SMALL FEAT TO GET $100M in SALES! Onsale could lose it in a flash, but they haven't yet. You do need to watch valuation and not let it get ahead of itself. I believe we are at the high end of the current range and would not commit new $$$ unless we got below $20. I would ignore staggerlee, he is a bean counter with no vision and with an over eagerness to short. You couldn't convince him to go long if you paid him to hold the stock. Mo