Channon

Beware the 'Wal-Mart Effect'

Without commenting on your conclusions, I do believe you have a logical flaw:

"To continue at this pace, AIPC would need to rapidly expand its operations…meaning higher fixed costs and a higher threshold for probability."

Without knowledge of where the company is running relative to capacity, this is not a logical conclusion. Are they running their "high fixed cost" equipment at capacity? On how many production shifts? Can they add a weekend shift? A second weekday shift? How about an overnight shift? If they are currently only running this equipment 40 hours per week, there is a phenomenal amount of capacity left before they will be faced with higher fixed costs or a higher threshold for profitability.

Your argument is that AIPC is not favorably scalable; unfortunately, that information is not contained in the company snapshot at Yahoo Finance.