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Technology Stocks : eBay - Superb Internet Business Model

EBAY 83.82

+3.7%

Nov 7 9:30 AM EST

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To: Charles Tutt who wrote (4857)	8/13/1999 4:16:00 AM
From: paulmcg0	Read Replies (2) of 7772

"Precisely what law of mathematics would be violated if EBAY went up forever?" For example, here's one that would that be violated, using some rough approximations. From it's 52 week low of 8 dollars per share, EBAY has increased 1042%. Using a simple compound interest formula of (1 + i)^n where i is the increase divided by 100% and ^n means to the power of n, if you put in the current rate of increase to give a value for i of 10.42 and you use a value of n = 3 years, and multiply that calculation by EBAY's current market capitalization of approximately 11 billion dollars, you would see that if EBAY went up at the same rate it has for the next 3 years, the market cap would be more than 16 trillion dollars, or double the entire GDP of the United States. Somehow, I don't think that's going to happen! Get your calculator out and calculate this, if you don't believe me: ((1 + 10.42)^3) * 11E09 (11E09 is the scientific notation for 11 billion)

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