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Technology Stocks : Egghead Computer (EGGS) -- Ignore unavailable to you. Want to Upgrade?

To: Philipp who wrote (2109)	7/25/1998 9:00:00 AM
From: Kip518	Read Replies (1) \| Respond to of 8307

Phil, while I respect people who get into stocks because of FA, I'm not one. I came to EGGS only because of TA. However, my guess is that what you know from briefing books, SEC filings, etc. is all that you can know at the moment. Steve Harmon, who has recommended EGGS since its move to the internet, estimates quarterly earnings at -.35 (http://isdex.yahoo.com/isdex/) but won't recommend purchase above 20 until the company reports. I think you are quite right that EGGS is in a position to fashion its report as positive or negative. Presumably, it will be cast positively (if XCIT, CNET, AMZN, etc. use wink-wink accounting, surely EGGS will as well). If you looked at the proxy filing (linked in an earlier message) you'll see that over 10% of this stock is owned by brokerage houses. My guess is that after earnings release, those houses will issue positive recommendations. This is why I closed my short positions yesterday & will not be short going into earnings, but, given TA on EGGS, I believe any spike after earnings must be sold short. Kip From DJ yesterday -- Elsewhere, Egghead.com (EGGS), the software retailer that announced plans earlier this year to close its stores and sell its products exclusively on-line, has a market cap of $517 million. The company hasn't turned a profit in three years. But its brand name is well known among computer enthusiasts. Shares surged earlier this month on the coattails of the sector's larger players to a year high of 29 1/8, about three times the stock's July 1 trading price. "People see something like Egghead come along, and they suddenly see a chance to make money. But there is nothing fundamental about it. The only way you can place a fundamental handle on it is that the companies people have poured money into have not disappointed people yet because there are no fundamentals yet. So the fact that there are no earnings or huge revenues is no big deal," Ram's Matthews said.

To: Philipp who wrote (2109)	7/25/1998 9:21:00 AM
From: HairBall	Read Replies (1) \| Respond to of 8307

Philipp: Thanks for posting the FA data and bringing attention to it. I have already read much, if not all of, the data you just posted. I have already posted this, but I still have my Egghead discount card somewhere and an old torn Egghead tee shirt somewhere. Now having stated my sentiments for Egghead, I have no idea how to value these "internut" stocks, using standard FA. I remember back in the late eighties when the Japanese stock market was soaring. It too, had PE multiplies in the stratosphere. Everyone was saying, they are different. They are saving their money and are very productive. That saving ethic was helping to drive the speculative bubble in real estate and securities, by bringing constant money flows into the securities markets. (Something the US market is experiencing today with retirement and offshore money flows.) Many, including myself, said these PE multiples where out of site. (60-90). I expected a major down turn in 1990 and it came. Now having said all that, I don't have any idea how to value these "Internut" stocks. Traditional FA is out the window on many stocks these days. It is purely a momentum play. Look at the price earnings multiple of MSFT and DELL for instance, they are way above historical averages. I do not have any idea how manic investors will see EGGS earnings report. Heck AMZN, has yet to turn a profit! Do these manic investors really believe, that Barnes and Noble, for example, will be sitting on the sidelines, watching the web profits go by? EGGS, already has a lot competition from solid companies, that have had a good net and catalog presence for years. (PC/Mac Connection, PC Zone, Computer Discount Warehouse, CompUSA Online) Just to mention a few. If I knew what the earnings report said today, I am not sure I could predict what the MM direction with the price would be and the reaction of manic investors, to that movement. That is why, I am day trading EGGS and not investing in it. (Of course, many TA investors, believe that the fundamentals show up in the TA. Anyway, back when fundamentals seem to matter!) The Big Money, will bring this market back to earth, it always does. However, it always does it with its pockets full of money from individual investors. Someone, has to pay the freight, will it be YOU? Be careful out there! BWDIK Regards, LG