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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (4490)	2/19/1999 6:07:00 AM
From: Bill Wexler	Read Replies (1) \| Respond to of 4634

Reiterate strong sell/short sell recommendation...EGGS I initially recommended shorting EGGS at around 25 a share as part of a linked trade with going long CPU (at that time around 13). EGGS is currently at 17 and change, CPU at 10 and change. Investors have bid up EGGS stock as an internet play. Egghead was driven out of the "bricks and mortar" business by CompUSA and promoted its web site in order to reignite interest in the stock. Naturally, insiders have been bailing out as internet mania propelled the stock price beyond their wildest imagination. EGGS still trades at half the market cap of CPU. I believe the stock will soon trade south of 10 a share and will eventually trade south of 5 a share. Egghead, for all intents and purposes, is a defunct retailer - so we have the first problem of the company being fundamentally unsound. Second problem is that the internet stock bubble is collapsing due to a flood of new supply hitting the market. This will affect the wannabe-internet companies such as EGGS and KTEL much more than the Yahoos. On the flip-side, CPU is grossly undervalued. Investors have thrown away the stock as if the company was about to go out of business. The perception is that rapidly declining ASPs, stiff competition from the electronics retailers, and price wars on the internet have completely obsoleted CPU's business. I think that while these are valid concerns, CPU's business will continue growing nonetheless. CPU has already made plans to spin off its direct sales/internet division and is rapidly growing higher-margin segments such as technical services and training. In fact, I think that in another year or two, the ASP of a PC will have dramatically less impact on CPU's bottom line. I also think there will be rapid consolidation in the office products/computer retailing category. So it is very likely that office/computer retailers with good balance sheets and high volume - but depressed stock prices (CPU and OMX come to mind immediately)- will very likely become takeover candidates.

To: Bill Wexler who wrote (4490)	2/19/1999 3:42:00 PM
From: Michael Bidder	Respond to of 4634

I couldn't read it all. eom

To: Bill Wexler who wrote (4490)	2/19/1999 5:23:00 PM
From: BelowTheCrowd	Respond to of 4634

Bill, Interesting that this rant should focus on the banks and financials as being in so much trouble. Anybody who's researched this would come to the same conclusion Cramer published a day or two ago: I Like the Banks. Here's Why By James J. Cramer 2/17/99 12:43 PM ET ...Me, I like the banks. Let me give you my thinking. First, Japan looks like it is bottoming. For some reason, well-documented in this morning's American Banker, Japan's strength correlates strongly with the banks'. Second, in that very same issue, there is an article that talks about how the Y2k spending, which has killed the banks, is concluding. That could cause earnings to ramp, particularly for the banks that have made many acquisitions and have had to integrate many different systems. Anybody who is talking about the "future" of Y2K companies is out of their mind. The spending in that area is already drying up, and most of them see no way out. Even the big systems integrators like Anderson Consulting are expecting major falloffs in revenues later this year and on into next. And ZITL sure ain't no Anderson... mg

To: Bill Wexler who wrote (4490)	2/19/1999 6:40:00 PM
From: Bill Ulrich	Read Replies (1) \| Respond to of 4634

Hey Hey Hey! You're forgetting the post where Sosiapath says one impact of Y2K would be on SI members; that SIers would have to prove Y2K compliance in order to post: #reply-5364063 (as if dates were really relevant to posting on the internet) Now that is the "most insane Y2K rant".