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Non-Tech : Borders Group (BGP) -- Ignore unavailable to you. Want to Upgrade?

To: jcurrie who wrote (302)	4/21/1999 7:57:00 PM
From: Eggolas Moria	Read Replies (1) \| Respond to of 411

The CEO was always a stretch to some, coming from book publishing and not retailing. The Chairman needs to articulate a firm vision and find the CEO to implement it, IMO. The drop was in part because the comp store sales numbers were in the low-end of expectations, the earnings from stores were below expectations and nothing was said last week by Mrkonic in this regard. Throw in a ML downgrade from 1-1 to 2-2 and another firms lowering from long-term buy to hold and that was probably enough fuel on the fire. At least, that's my interpretation of the day's events.

To: jcurrie who wrote (302)	4/21/1999 8:12:00 PM
From: Michael Burry	Read Replies (2) \| Respond to of 411

I doubled up today. To me, this is not unexpected except for one thing. Analysts were only expecting a penny. They're going to be a little under that, but this is a seasonally slow quarter for bookstores in general. It's not like analysts were expecting anything better than basically breakeven, which is what we'll get. And the reason we'll have a small loss is the internet ops and the CEO severance pay, the former of which is going to be minimized in the future and the latter of which will be nonrecurring. So the earnings/numbers/concept are all still fine with me. The CEO was brought in to give the company an online push. There's been a strategy turn. No dumping more money down the internet hole. And now the CEO is out. My guess is he was a little high in his intentions for the online/brick&mortar ratio of the business, which clashed with the more conservative existing management that for the last two years has intentionally de-emphasized the online business in favor of current profitability. With the new focus, he's not the man for the job. And there's most likely a personality clash too. Fine with me. What I don't like is his severance package. It gives me a little bit of doubt about the remaining management that they gave it to him in the first place. Maybe they needed to agree to this to get him onboard, though. And maybe kudos to the board for getting him out before he mucked things up. So it's not an issue for me in terms of buying the stock. Too, maybe Borders knows now what it doesn't want, and this second search will prove more fruitful. Marriages work that way (second ones are more successful than firsts) so why not CEO searches? ;0 I'm happy with my investment. But I think rationally we must realize that sometimes businesses get dirt, dirt cheap. And BGP isn't there yet. A good long-term hold. Who knows if it will be a good short-term hold? So it's got my long-term money. I feel very comfortable holding BGP. Reassuring words, but as I said on the value thread, I'm now officially biased. Good investing, Mike