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Staples, Inc. Message Board

  • cybermoor cybermoor Sep 21, 2000 4:16 PM Flag

    SPLS & -READ-

    Does anybody know what this means ??

    the performance of this investment
    effect the next
    earning report

    Investments � Staples accounted for some investments on a
    fair market basis (i.e., market values) rather than on
    a cost basis, consistent with accounting
    requirements. Year to date, Staples has invested $65.6 million
    in various Internet-related ventures, the largest of
    which is ($33 million). The
    investment is being accounted for at a fair market value of
    $71 million, which appears to be an important
    contributor to the $69.6 million in unrealized gains Staples
    is reporting in assets.


    BOSTON (Reuters) - A spectacular unrealized gain
    recorded by Staples Inc.(NasdaqNM:SPLS - news) in late
    July from an Internet investment has lost nearly
    two-thirds of its value in less than two months, a U.S.
    regulatory filing made on Tuesday

    Framingham, Mass.-based Staples, the No. 2 U.S. office
    products retailer, told the U.S. Securities and Exchange
    Commission it carried a $71 million unrealized gain from its
    7.5 percent stake in, which registers
    Internet addresses. But since Staples estimated the gain
    on July 29, shares have plummeted to
    about $9.70 from $26.75.

    The diminished value
    came as Staples reported a 19 percent drop in its
    second-quarter earnings as mounting losses from its own Internet
    operations weighed heavily on its

    Staples owns about 2.3 million shares of New York-based's common stock, with warrants to buy about 1.64
    million additional shares, the company said in the
    filing. Staples has recorded the investment at a cost of
    about $33 million, according to the SEC

    Earlier this year, Staples' investment in
    had the makings of a windfall, considering it bought
    2.04 million shares in 1999 at $3.43
    apiece, SEC filings show. Shares of
    skyrocketed to nearly $100 after the New York-based company
    went public in March. priced about 5.2
    million initial public offering shares at $24

    While Staples' total stake in approached
    $200 million on paper, revenues from its own
    electronic-commerce operations, which include,
    and, came to just $95.7 million in
    the second quarter, the company reported last month.
    Staples expects its Internet business to become
    profitable by 2002, a year earlier than originally

    Meanwhile, Wall Street's enthusiasm for has
    waned considerably. Earlier this month, for example,
    Banc of America Securities analyst David Scharf
    downgraded to buy from strong buy. The
    downgrade came a few weeks after said it
    planned to withdraw its secondary stock offering of four
    million shares due to unfavorable market conditions.

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