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June 2, 2005

SpeculatingStocks.com Stock Pick: eCOST.com, Inc. (ECST)

Stock Price: $3.91


eCOST.com, Inc. is an online discount retailer of high quality new, "close-out" and refurbished brand-name merchandise for consumers and small business buyers. Through eCOST.com the company markets products from leading manufacturers such as Apple, Canon, Citizen, Denon, HP, IBM, JVC, Nikon, Onkyo, Seiko, Sony, and Toshiba.

EBAY announced after the bell that they plan on acquiring all of Shopping.com (SHOP) outstanding shares for a total of $620 million. This is over a $100 million premium over SHOP's market cap. ECST will now deserve a higher market cap as well, as the spillover effect benefits ECST.

eCOST.com was recently spun out from PC Mall, 14 million ECST shares were distributed to MALL shareholders on April 11th. Dilution should be in the past for ECST and now they can focus on expanding. Its very possible they may be a buyout candidate. At a market cap of $68 million, ECST is undervalued with net sales of $55.1 million for the first quarter. Net loss was $1.7 million. The company plans on becoming profitable during the second half of this year.

124,000 new customers were added last quarter taking the total to 1.2 million.

There are 15.46 million shares in the float.

ECST almost filled the gap yesterday from $3.35 to $4.04.

 
     
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