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To: Michael Burry who wrote (6208)	3/5/1999 1:58:00 PM
From: jeffbas	Respond to of 78471

Mike, on CPU, I have followed this for a while and avoided. There was decent insider buying at double the price. The store near me is quite crowded whenever I go. I think the problem is a bad business model. Dell and Gateway is the best business model for selling computers. MicroWarehouse is another superior one. Free standing stores is the worst by far. The guys who buy this stuff are typically much more sophisticated than average. It is no big deal to window shop at CPU and buy over the Internet. This kind of stuff is quite vulnerable to Internet shopping, as opposed to the fashions that fill most stores in malls. It is no coincidence, in my opinion, that none of the malls near me have any computer stores in them. They probably overpaid for the Computer City chain as well, creating debt that in effect won't fully service itself. (1 + 1 = 1). I think that at $6 it might be a good trade, but I am skeptical of its long term outlook.

To: Michael Burry who wrote (6208)	3/5/1999 2:50:00 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78471

I agree with Jeff, that CPU is particularly vulnerable to Net competition and their customers will go to the net quicker than other, less sophisticated customers. They even encourage customers to do so by having thier own online store and a build-to-order PC program in the stores or from the net. Meanwhile, other big box retailers like Best Buy will take potshots at best selling items while not stocking a lot of the slower stuff. On Computer City aquisition. They buy a bunch of stores then close a fair chunk of them... Let's say there were 6 chain stores competing for computer business in a 5 mile radius: Compusa, computer city, Best buy, circuit city, Office depot and office max. Compusa buys and closes the computer city store. Do all of city's customers automatically default to compusa? Nope, Compusa gets 20% - 40% of them while the other guys get a boost at no cost. This is not to say that their's no room in market place for bricks and mortar computer super store... this situation bears watching.