luckychucky

Coinstar Investors Counting Pennies That Don’t Exist

In tough economic times, logic says people will likely have less spare change lying about. They'd also be less flippiant about letting 8 percent of it go just for the convenience of having a machine count it out for them. That kind of cavalier consumer attitude about fees is usually a sign of flush times, not lean times. My gut feeling is that their business model is just too flimsy a gimmick to represent solid strength.

To respond to 'CSTR Shareholder's comment above - <i>of course<i> Redbox has captured the #1 share of the movie rental vending machine market...nobody else is in that market because it's utterly pointless, and they can have it all to themselves in the face of Netflix, cable tv and downloading, both of the pirated and legallly sanctioned kind. Even if a CD-based rental business fantasy can currently manage to eke out some toehold, its days are guaranteed to be critically numbered in the face of the absolutely inevitable trend toward completely virtual media disribution over ever-faster Intenet transmission speeds. Any business model which can't see that one coming is blind a a bat. Look to Netfilx, if nowhere else - they're moving everything, sometimes slowly, sometimes quickly, toward streaming and downloading. RedBox will go the way of the 8TrackTape. So yes, Redbox dominates that market, and I'll breathe a great big sigh of relief that I don't.

As the above article states, where you ever do see 34x-60x PE multiples and there is any attempt to actaully justify them in the light of reason, it's usually for spculative growth companies with phenomenal potential if the bet pays off: say, if they discover the cure for cancer or develop photovoltaic power via a special porces which will make it half as cehap as coal... look at this dog of a stock (a dog with fleas) and honestly tell us it's anywhere within meteor-strike range of that kind of breakthrough profitability. This star seems highly likely to implode.