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

To: Pauly who wrote (959)	3/20/1998 3:22:00 PM
From: saber hormi	Read Replies (2) \| Respond to of 4903

4 Million bids... let's take a close a look at those bids. Onsale auctions (I would say half of them) start as low as 9 dollars for products that sell for 500 to 1,500 (more or less), and bid increase could be as low as 5 dollars. Believe it or not most people would start their bid at the initial price 9 and keep increase their bids by 5 dollars until the target price of 500 or more. Do the math of the bids entered, you can have as much as 100 bids, theoretically, to sell one product, I'm not saying that's what happens all the time but one has to realize that bids don't mean a thing and ONSALE shouldn't try to use that number to boost their stock price.

To: Pauly who wrote (959)	3/20/1998 9:12:00 PM
From: William Vu	Read Replies (2) \| Respond to of 4903

Pauly, the statements and numbers in the company releases are either misleading or inconsistent. Let me give you a couple of examples. 1. According to your data, which were taken from the press release, the "revenue" for the 4th quarter was $33 millions, and the number of orders was 232,000, which results in the average price of $142 per order. Thus, it is clear that "Onsale" accounting practice is to count "sales" as revenue (or very close to it, say, "sales"-"postage"="revenue"). Therefore, if "Onsale" has to pay more to acquire the merchandise then it will also have more "revenue". Can you see the paradox ? For retail companies, "sales" should not be identified with revenue. The "Onsale" management of course should know this elementary fact, yet they intentionally used the wrong accounting practice in order to mislead the public, to inflate ONSL stock price. 2. "Onsale" management boasted about the number of "bids" and the number of "customers". Enough has been explained to you about "bids", let me point out to you that the number of customers is also a misleading number, which is another tactics that "Onsale" management used systematically, and very effectively, to artificially inflate the stock price. Let me prove to you why the number of customers is irrelevant, using "Onsale" own statistics. First, there are 232,000 orders (in the 4th Q.), of which 73% from repeat customers. A short quiz: (I like to give you quizzes to make you think): how many orders from repeat customers? Answer: 169360 orders are to repeat customers. (232,000 x 0.73). Now you can easily see that there were only 62,640 orders left for the total number of the so-called "418,000 registered bidders", so in "average" 6.6730523 customers must share one "purchase", be it an extension cord or whatever, and for the whole quarter ((o: Isn't it clear to you now that the number of "customers", (as they defined "customer" is a person who gave his or her name and credit card number), is a very superficial number? "Onsale" should not use this number, this statistics at all. The number of the so-called repeat customers is essentially less, because of this "Onsale" did not reveal this number. The tactics is clear, a bigger number gives more effect to hype the stock price. William >><Pauly: Is it not true that the ONSALE management sent you to >> this thread in order to hype the ONSL stock?> > No, I'm a shareholder.