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Electronics Boutique Hldg (ELBO) Message Board

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  • natrl9 natrl9 Jan 25, 2000 8:14 PM Flag

    To summarize the situation . . . .

    on advertising costs, etc. As has been previously
    discussed on this board, ELBO is due to earn 14-16M from
    the website. Same number as announced by Firestone
    last January. For once I agree with L2PS. Spending
    $.30 from the bottom line to earn only what you were
    factoring in sales from the beginning, makes no sense. Only
    way this can turn into a positive is if ELBO does
    GREAT numbers for the 4th qtr., and year end, thereby
    meeting current estimates. Also, Wall St. takes this into
    account, thereby rewarding a co. that is undervaled
    according to the industry multiple that has been set for
    it. Currently, SSB has set a multiple of 17X. As I
    have stated in other posts, the groundwork that ELBO
    has laid with their state of the art service and
    calling center, along with their customer serviec, will
    bring in the numbers from Sony PS2, and Nintendo
    Dolphin, when it is finally released. Other than that,
    sometimes ELBO gets lost in the shuffle.

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    • In your last post you say... <<"ELBO spent
      too much on advertising costs,
      etc.">>

      natr19, you and I have seen eye to eye on EB for quite
      some time now. I know this has been a very profitable
      holding for us both in the past and I have confidence it
      will be just as profitable (if not more so) for us in
      the future. I must say however, that I disagree with
      your statement regarding EB's expenditures on growing
      the E-commerce side of their business.
      Firstly,
      Let me say I believe very strongly in the adage...you
      need to spend money to make money.
      Secondly, I also
      believe just as strongly that the internet offers
      opportunities for sales growth and product expansion, moving
      forward, that this company could never achieve as a bricks
      and morter "only" entity.
      If the internet was a
      nine inning ball game...we would still be in the
      pre-game warm ups. For EB to have gone from zero to $15M
      in revenue in E-commerce over the last two years is
      astounding...but the thing that is most astounding about this
      growth is that they have accomplished it without burning
      though $150M in startup costs and branding expenses like
      most of the folks out there trying to build a web
      presence. The internet is on the verge of a broadband
      explosion that over the next two years will change the face
      of doing business. EB knows this, EB understands the
      ramifications and EB has decided to be part of this changing
      world and not be left behind. I applaude their
      foresight and their determination to be a player in this
      new arena called the internet.
      As far as the Q-4
      earnings and full fiscal year numbers are concerned...I
      believe ELBO will surprise by enough to cover the
      0.19/0.20 cents spent on the i-net part of the business and
      still beat analyst expectations just like they did last
      quarter. It should be an interesting year to be invested
      in ELBO with the introduction of the Sony
      PlayStation2 scheduled to be the biggest single event to ever
      hit the industry. Just a little patience and then a
      big reward. Gotta love it.
      Best regards,
      RBL