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Outerwall Inc. Message Board

  • earnings_man earnings_man Apr 10, 2013 10:09 AM Flag

    Short interest updated yesterday: 13.2 million shares

    27.3 days to cover based on the decline in trading volume. lol

    Anyone expecting an earnings beat?

    Sentiment: Buy

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    • Yeah, shouldn't be hard now that expectations have lowered. Atleast someone has been smart enough to cover some shares.

      I'm just wondering how much revenue those paypal conversions are producing so far. That's the most interesting issue to me.

      • 1 Reply to bear_bull88
      • Hmm. It is interesting, but I wouldn't expect that to be significant. I also am not sure exactly what the value proposition is there - I can see some people using it as a payments mechanism, but it wouldn't be a one-stop shop so I'm not sure just how many problems it solves.

        Still, the coin/money kiosk business is a steady $1/share net income business, and adding functionality like that is a good thing - provides incremental value and diversifies a bit further beyond coins.

        The biggest things that could impact the company's profitability in the medium term imo are a) price increases - CSTR will have significant leverage here and b) Redbox instant, which is the biggest variable of all. Verizon has the means and a huge incentive to push this, and it is a differentiated offering. I'm tired of hearing about how CSTR has "only" 4600 movies. None of the critics have even watched 4600 movies, so why does that matter at all?

        The key issues are

        a) does the system work?

        I have to believe the answer here will be yes, no matter what happens at first.

        b) does it have the program I want to watch?

        The answer here is almost certainly no for Redbox Instant, Amazon Prime, and Netflix - virtually none of the newly produced network content or latest movies are available for subscription streaming on any of these platforms. So the only remaining relevant question is

        c) is there something here worth watching?

        I'd say yes. Most people's standards are pretty low.

        Finally, even if all three answers are no, I can't imagine a world where RI is unable to draw hundreds of thousands of customers. If I had to bet (and I am, at the moment, by being long CSTR), I'd guess that in a year or two RI will have millions of customers.

        Sentiment: Buy

64.04+0.39(+0.61%)10:49 AMEST

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