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I posted this over in the CC board, but there's not too much action there, so I thought I'd try over here:

Here's the original post:

Can anyone explain to me why an analyst has issued an outperform for CC?

They've already stated that Divx will negatively affect the EPS this year, and should Divx fail, it could have a tremendous negative impact.

Furthermore, CC is now competing with suppliers (such as Toshiba) with their Divx technology. Is this going to win them friends?

Furthermore, I read a Carmax interview in the Ft. Lauderdale paper and I got the impression from the Carmax CEO that there is a LOT of corporate overhead which will only be reduced when more stores are opened. Doesn't sound highly profitable to me in the near term.

In an industry with razor thin margins and given these risks, why would CC be such a darling?

Is this a good short candidate?

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