Pot calls kettle black (Grant's International, 10/29/99)" 'EarthLink, MindSpring Overvalued, Softbank Exec Says,' a
Bloomberg headline proclaimed late last month. Nothing new here.
Rather, the news value of the pronouncement lay in the identity of the
individual who pronounced it. Bloomberg's skeptical executive was
none other than Bill Burnham, general partner of Softbank Capital
Partners. Burnham should know a thing or two about overvaluation. His
venture capital firm belongs to the fold of Japanese Internet
conglomerate Softbank Corp., itself a not-inexpensive stock.
Furthermore, Softbank Capital Partners invests exclusively in up-and-
coming Internet ventures, some of which would, no doubt, make
MindSpring (MSPG) appear less overvalued by comparison. Although
Burnham is quoted as describing current trading conditions among
Internet stocks as 'a liquidity-driven bubble,' he assures that 'it will last
a decade, because it's being driven by U.S. and global demographics.'
The precise demographics to which Burnham alludes were not
disclosed. But they are clearly the stock-buying kind. However, a
countervailing demographic, the stock-selling kind, may some day
make its presence felt in the Internet sector. If, perchance, the Internet
stock bubble (Burnham's words, not ours) does not last one decade
more-if, indeed, it does not last one year more-international
investors may find Softbank stock to be as black a kettle as the
MindSpring pot."
Get the full story in the October 29, 1999 issue of Grant's
International.
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