Well, this is it. The time for talking is past. All that's left now is for America's professional football league to settle the score between its twin conferences' surviving teams in the big game on Sunday. Even if you hate the game, we bet you'll be watching for the commercials -- if not the halftime extravaganza (remember those?).

If nothing else, the hoopla might help take investors' minds off the Fed, the dollar, GDP, and corporate profits. Hey, those things are important and all, but once a year, isn't it time to just take a break? Then again, an AFC win is good for the bulls ... or was it da Bears?

In today's Motley Fool Take:

Pixar Takes a Pass

In a surprising move, Pixar(Nasdaq: PIXR) has given Disney(NYSE: DIS) the kiss-off. That's right, the two heavyweights, which had been best buds in the animated world since 1995's Toy Story, will go their separate ways come 2006.

According to Steve Jobs, CEO of Pixar and Apple Computer(Nasdaq: AAPL), the companies had been negotiating an extension to the existing deal since last spring. It was clear that Pixar had outgrown a partnership that had the maturing Pixar doling out half of its movie profits to Disney.

Disney apparently thought it had a stronger hand. CEO Michael Eisner's move to shutter Disney's Florida animation studio seemed to hint that a deal was in the bag. While Disney can point to Pixar's extravagant demands and its pipeline of animated projects, cutting ties with the creator of the past decade's highest-grossing animated features can't be easy.

Since Disney's 1999 release of Tarzan, only Lilo & Stitch has broken the $100 million mark at the domestic box office, while Pixar's five titles have averaged $239 million in stateside receipts.

One has to think that even a deal giving Disney little more than a token distribution fee -- the kind of arrangement that Pixar is likely to secure from someone like Time Warner(NYSE: TWX), Sony(NYSE: SNE), or Viacom's(NYSE: VIA) Paramount -- would have been preferable to Pixar's parting after The Incredibles this year and Cars in 2005.

Instead, Disney is working on its own hand-drawn and computer-generated features as well as teaming up with upstart tech-savvy outfits, as it did with Pixar before the apprentice mastered the master. Disney is also taking up its contractual right to make Toy Story 3, even if it means that it might be more like Godfather 3, absent the storytelling and rendering talent of Pixar's crack crew.

Pixar's enviable track record, which prompted David Gardner to recommend the stock in Motley Fool Stock Advisor, will be greatly missed by Eisner. Somewhere, Roy Disney Jr.'s podium inched a few inches higher and his megaphone a few decibels louder.

Discussion Board of the Day: Pixar

Do you think Pixar is doing the right thing by moving on? Are negotiations dead or is there a chance that this could simply be Pixar calling Disney's bluff? All this and more -- in the Pixar discussion board. Only on Fool.com.

Gateway's Got Gumption

The problem with writing about Gateway(NYSE: GTW) is that there remains little left unsaid about the company. Regular visitors to the Fool and especially members (Not a member? Sign up here and enjoy full access to our discussion boards) already know the two main stories on Gateway:

Story One: Gateway cannot compete successfully with the likes of Dell(Nasdaq: DELL) and Hewlett-Packard(NYSE: HPQ), and consequently is remaking itself into a hybrid between those "mail order" companies and the big-box stores such as Best Buy(NYSE: BBY), Circuit City(NYSE: CC), and privately held CompUSA.

Story Two: Gateway is conducting a fighting withdrawal from the PC wars and girding itself for battle on the consumer electronics front. Despite continuing losses, the company is husbanding its cash and remains a value play, or " green gene stock" if you will. If for no other reason, it's worth investing in because its market capitalization is nearly equaled by its cash and equivalents, minus its long-term debt.

Much as the company's stockholders may have hoped otherwise, Thursday's earnings announcement for the fourth quarter and full-year 2003 fails to rewrite the story. Yes, the company continues to bleed red ink throughout its self-surgery. (Indeed, things may be worse than the text of the earnings announcement explains, as the company's balance sheet suggests that part of the year's narrowed losses is due to tardiness in paying its debts. Accounts payable rose from $279 million to $416 million over the past year -- a 49% increase.)

And yes, Gateway still has about $3.02 per share in net cash ($2.41 if you count its preferred shares as long-term debt), versus a stock price of just over $4.

So if there's a story worth telling here, it's one of hopeful fantasy. Gateway's 5-megapixel digital camera has garnered glowing evaluations, and consumers seem to have noticed this. The company reported that sales of Gateway digital cameras shot up 200% between Q3 and Q4 and were still accelerating, with November's sales doubling again in December's crucial holiday shopping season.

Now, I happen to know of another company that is interested in expanding within the digital photography market, is profitable and free cash flow positive, but in need of a big pile of cash to help pay down its $2 billion debt. What are the chances that, if Gateway hung out a "For Sale" sign, Eastman Kodak(NYSE: EK) might come knocking?

Quote of Note

"If a man watches three football games in a row, he should be declared legally dead." -- Erma Bombeck

The Overstock Letter

By Jeff Hwang

"Super-de-duper." That's how the holiday quarter went for Motley Fool Hidden Gems pick Overstock.com(Nasdaq: OSTK).

Much has been made of the frank shareholder letter Overstock President Patrick Byrne included with the fourth-quarter earnings release. What's impressive isn't just the amount of information, but also Byrne's dedication to helping shareholders -- the owners -- understand it. This respect for shareholders, already evident in his Berkshire Hathaway-esque (NYSE: BRK.A) Owner's Manual, is fully borne out in the now-infamous "The rhythm of the Dao is like the drawing of a bow" letter.

Simply put, the quarter was "super-de-duper," as Byrne said.

Gross merchandise sales soared 94% to $130 million. Gross profits, however, grew only 29% to $11.8 million, as the "25% below Amazon.com(Nasdaq: AMZN)" deal that spurred sales of books, music, and videos brought "extremely slim margins." The $0.07-per-share profit in last year's quarter also turned into a $3.1 million, or $0.19-per-share loss, as the company started to spend money on advertising to gain brand recognition.

"Jeff, I can't believe you're buying that spin! The company grew revenues and turned a profit into a loss ... and that's a good thing?"

Overstock could have turned a profit in the fourth quarter. It did last year, but without the extra $5.8 million in marketing expenses. As Byrne explains, the goal is to ramp up revenues as fast as possible -- even if that means sustaining small losses -- and to secure repeat purchases with both competitive prices and strong customer service. For this, he is willing to sacrifice short-term profits to gain bigger profits down the road.

The company, which had previously shunned advertising, found that it could build valuable brand awareness by spending a few dollars. As a result, recent sales and marketing expenses more than doubled those of any previous quarters. Byrne even provided a link to a chart with the earnings release that shows the extent to which the advertising had worked.

Of interest to many investors, Byrne also explained COO James Hyde's exit from the company as the end result of "team benching," an Overstock team "last chance" practice. He also talks about areas where Team Overstock fell short in the quarter and where it could have saved money.

Patrick Byrne's knack for communication helps him make shareholders understand what's happening with their business and how he intends to grow it. The letter reflects a respect for fellow owners that all CEOs should have.

As an investor, you shouldn't have to choose whether to trust your CEO. And with Overstock.com -- as it should be with every company -- you don't have to. You merely have to decide whether or not you agree with Patrick Byrne's strategy, and how much you are willing to pay if you agree.

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