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Technology Stocks : Data Dimensions

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To: Staff who wrote (3455)	11/3/1997 11:27:00 AM
From: Robert E. Bruss	Read Replies (1) of 4571

>Say you have 12 million shares outstanding and the earning even come >in at 25 cents/share. How do you say with a straight face that that >legitimatly equates to $30.00 or $40.00 or $58.00/share as some have >been touting?? The stock price is a reflection of expectations of future earnings, or in theory the net present value of those earnings. High pe's are usually associated with either current high growth or expectations of such growth in the future. Of course the current pe is ridiculous, but not if growth is sufficiently rapid. I don't know if they're going to hit $2.00+ per share next year, but evidently the market thinks it's at least possible. Otherwise the stock price wouldn't reflect the apparent optimism it does at the moment.

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