Originally Posted by
Balance
I am with Roger on this one :
"Upon reflection I think 8.5 -9 x 19 = $1.61 -$1.71 is a fairer price range than the $2.00 I suggested the other day but the caveat to that is I would only invest at that price if I believed management had a viable plan to turn the company around and stem the losses in the finance unit."
Warehouse entry into the finance/credit card business is the best example of a company which has lost its*way. On paper, it all looks great - big customer base to sell credit cards to and by offering 5% discount, capture more of their retail spend.
What is very telling is its inability to execute the strategy successfully.
First it bought Diners' Card - a dinosaur which retailers and restaurants refuse to accept (or charge 3.5% surcharge for using) presumably to use its platform. Next, it raised $115m to support the roll out of the business and expressed great confidence of a two year plan to achieve profitability. Well, nothing to plan so far and it looks grim.