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eLong Inc. Message Board

ibanker_nyc 3 posts  |  Last Activity: Mar 5, 2014 9:26 AM Member since: Oct 4, 2007
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  • ibanker_nyc ibanker_nyc Mar 5, 2014 9:26 AM Flag

    vow!! whattay revelation...We (including Wall Street analysts) never thought about this!! :)

    Sentiment: Strong Buy

  • Reply to

    vs Amazon

    by ibanker_nyc Jan 28, 2014 12:36 PM
    ibanker_nyc ibanker_nyc Jan 29, 2014 10:37 AM Flag

    I am talking about operating margins. Are you referring to gross margins - well, hell yeah they make money on the gross profit line - everyone is supposed to do that. But the scale of their business requires that SG&A. If you scale back your SG&A, your business will suffer. You have to increase your gross profit dollars...period...and amazon is not doing that.

    I believe best buy will be around till Amazon's day of reckoning. Remember, they do not have a liquidity crunch...and Best Buy is the largest retailer of consumer electronics (if I am not mistaken) and As long as consumer electronics is innovating, people will need to feel and touch...

    My biggest grieve with BBY is their customer service - which downright sucks...The GEEK SQUAD is awesome and no I am not a novice who needs to call help desk to install an antivirus.

    BBY should buy square trade...As that is where they are losing their high margin service business..I would rather turn my defect CE into a store rather than shipping it via UPS to some random location.

    Sentiment: Strong Buy

  • ibanker_nyc by ibanker_nyc Jan 28, 2014 12:36 PM Flag

    We all know the story here..

    Yes, BBY margins have been impacted, but they are still much fatter than AMZN margins..

    At some point, Wall Street will lose patience with AMZN if it continues to operate at breakevn - you dont need a break-even business, you need a business that makes money!

    When wall street loses patient, AMZN either starts increase pricing or shares start tanking - in either of these scenaro, best buy's relative value proposition increases immensely

    Sentiment: Strong Buy

LONG
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