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

To: Mo Chips who wrote (904)	3/13/1998 4:00:00 PM
From: William Vu	Read Replies (1) \| Respond to of 4903

To All: ONSL is the most simple company to research on. Unlike, say, ORCL or NSM, where you don't know what is going inside. Unlike Kmart, or Sears, where you can't estimate their revenue or earnings, everything happening in ONSL you can see. Then, one step further is to estimate their future growth. This is slightly more difficult, but analogous task for companies like ORCL and NSM are much more difficult that for this one. Here, you can take into account supply and demand, estimate the growth of demand in this type of products that ONSL sells, and the growth rate of internet auction businesses. So, take a calculator (or open a calculator and put at a corner of your computer monitor), open www.onsale.com, and compute their sales for the day. Assume that everything will be sold at a price equal to or 30% exceeding the quoted prices, whatever you like. Than calculate their revenue, which can run from 1% to 5% of their sales, whatever you like. They have three sections: computer, sports, and consumer electronics. It takes you about 40 minutes if you want to finish this boring work, but you can save two thirds of the time by computing the computer section only (by far the most heavy one), and times three to get the whole (inflated) number. After this calculation you will be shocked to see that ONSALE IS in fact a small business. ONSALE is a small business and will remain a small business in whichever year you want: 2000, 3000, .... Why? Because it is very easy, let me repeat, it is very very easy to make a business like ONSL. Buy a server, and organize in your garage, put an attractive webpage, and advertise it, and you already started a home based e-commerce business. It is true that they are the pioneers of e-commerce (one of the first), but this does not mean any advantage for them. There are many online auctions nowadays which are as popular as ONSL, visit www.ebay.com, www.firstauction.com,... to mention just a few. The number of competitors grow very fast, which will compete for relatively small source of supply of discounted and used computer products. I have more to say but I am tired of typing, so I post now as is. William

To: Mo Chips who wrote (904)	3/14/1998 10:44:00 AM
From: StaggerLee	Read Replies (2) \| Respond to of 4903

You said: >>You'll see it has stayed pretty close 10% over the long term. When I said essentially the same thing, you said I was posting inaccurate information to tank the stock! Get your facts together before you flame other posters. I'm glad you now agree that my postings, with respect to gross margins, have been correct. Also, here's a real gem of yours: >>Bottom line, they have not seen the erosion in margin for the reasons you say. Of course not! By definition, inventory-related charges take time to appear. You don't take an inventory charge the same quarter you take stock of the product. It will take several quarters for shrinkage and obsolescence issues to manifest themselves. Obviously you have no accounting experience or you'd know this. Perhaps you should contain your irrational distain for CPA's, and rather, learn from us. GET IT?