Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : CompUSA (CPU) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (918)	12/28/1998 8:40:00 PM
From: Doug Fowler	Read Replies (2) \| Respond to of 3187

CompUSA needs to spin off its online operations, and make sure it operates out of only one state, or operate only of of sales tax free states. One very big item that makes CompUSA less competitive online is the sales tax issue. 6 to 8+ percent can be a very significant dollar amount when buying a computer. CompUSA, as it currently operates, has to charge sales tax in every state it has a store (which is most of them). Quite frankly, I go into CompUSA to see and touch an item. If I decide to buy it, I compare prices to PC Connection and a few other online stores, and then figure in the sales tax. In 95 percent of situations, it is cheaper to buy it online. (I will often buy software at CompUSA, but while I have bought about 10 PCs in the past two years, none of them have been from CompUSA, because they didn't offer the best deal.) Egghead is doing less than 1/20th of the sales of CompUSA, yet it has half the stock market capitalization. CPU will extract much greater value for its shareholders by spinning off its online operations.

To: Bill Wexler who wrote (918)	12/29/1998 4:02:00 AM
From: Bill Wexler	Read Replies (1) \| Respond to of 3187

For those of you that are a bit more adventurous.... A suggestion for a linked trade. In addition to loading up on CPU prior to the new year: Short EGGS. Despite the pseudo-internet facade of this defunct retailer, I believe that it will be a very safe short as soon as the opening bell rings on Jan. 4, 1999. If no shares are available, then I suggest selling premium. The March 30 and 35 calls look attractive (EGQCF and EGQCG). note that while a platoon of CPU executives were buying 500,000 shares of stock in September and October, Egghead executives were "scrambling" to sell their toilet paper. In the meantime, super-intelligent gamblers are already thumbing through Beverly hills real-estate guides while they wait to cash in on their EGGS long positions and CPU short positions. My guess is that the universe will come back into order with amazing speed and ferocity.