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

To: William Vu who wrote (963)	3/21/1998 4:06:00 PM
From: Mo Chips	Respond to of 4903

William, I think your comments are mis-leading. 1. <<it is clear that "Onsale" accounting practice is to count "sales" as revenue>> Onsale has addressed this and made it VERY clear as to how, from accounting perspective, they account for revenue. From ONSL 10-Q: "Gross merchandise sales represent what the Company's total revenue would have been if all Agent Sales had been made as Principal Sales." They do not count agent sales in "revenue." And you also say, <<if "Onsale" has to pay more to acquire the merchandise then it will also have more "revenue">> Also from the same 10-Q, "In an Agent Sales transaction, the Company does not take title to or possession of the merchandise" So I see no paradox. They are clear as to what these numbers represent. Now a question for you, do you know what these numbers do provide? Answer, among other tihings, more details to really understand the business. Here's an example of what you can use these numbers for: Message 3766811 2. <<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">> Why are you excluding the orders to the repeat customers? If the total number of orders is 232,000 to total registered bidders of 418,000, then orders to registered bidders is .55. Why exclude registered bidders? Some or all could be winners, your logic here makes no sense... Mo

To: William Vu who wrote (963)	3/21/1998 8:37:00 PM
From: Pauly	Read Replies (1) \| Respond to of 4903

William, I'll take your analysis one step further. Your analysis makes no sense. The following is what you SHOULD have done, which shows the strength of ONSL's concept. 1. There were 232,000 orders in 4th quarter, of which 169,360 were to repeat customers. So 62,640 of the orders were to new customers 2. There were 418,000 registered bidders at end of 4th quarter, up 30% from prior quarter. So there were 321,538 bidders at end of 3rd quarter and therefore 96,462 new customers were added in 4th quarter. 3. These 96,262 new customers made 62,640 orders in the 4th quarter, which is .65 orders for each new customer (62,640/96,262 = .65). 4. Let's assume that the "repeat" orders all came from the customers who already existed before 4th quarter. (I think this is the correct way to think of it. If anyone else has another idea, please share it.) The repeat customers made 169,360 orders in the 4th quarter, which is .53 orders for each pre-existing customer (169,360/321,538 = .53). 5. I would expect orders per customer to be higher for newly registered bidders (this is the .65 number) than for pre-existing bidders, since the reason someone probably registers in the first place is to place an order. However, the orders per customer for pre-existing customers is also very high, .53, which shows the loyalty of ONSL's customer base and the health of their business. Paul