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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 689.23

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Jan 23 4:00 PM EST

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To: HairBall who wrote ()	12/6/1999 7:43:00 PM
From: Eric Wells	Read Replies (2) of 99985

As of today, Yahoo, at it's closing price of 280, has a market cap of $74 billion - with annual revenue running at $465 million and annual after tax (and after non-recurring expense) net income at $34.5 million (per Edgar SEC filings). Microsoft had a market cap of $74 billion some time in mid 1996 - Microsoft's stock price was the equivalent of approximately $14 per share at that time. Yet for the fiscal year that ended June 30, 1996, Microsoft reported $4.6 billion in revenue and $2.1 billion in after tax net income. That's 10 times Yahoo's current revenue, and 60 times Yahoo's current net income. It seems that a dramatic change has taken place in the factors that go into pricing stocks. And yet, it seems that YHOO will continue to go up (or so many investors are saying) - even though Yahoo does not appear to be growing as fast as Microsoft was in 1996. How long can this last? I have no position in YHOO (nor do I intend to take one). -Eric Wells

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