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.
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