To illustrate the overpopulated internet space and the upcoming shakeout, I refer you to some nice little blurbs from Forbes ASAP:
- From 1894 to 1903, an estimated 20,000 telephone companies were started in the United States.
- In early 1900, the number of railroad companies peaked at around 1,380 and show a more recent count of 30.
- In the mid 1980's, Hard Disk companies peaked at around 52, and troughing at around 12.
- Right now, there are about 400 public internet companies, and the author speculates that the number can compress to just under 50.
Pigs I have shorted tend to have low cash positions, high cash burn rates, ineffective marketing returns (e.g. 10 cents in sales returned for every dollar spent on marketing), a disadvantaged competitive position, or offers a commodity, and is hitting new stock price lows below solid long term bases.
I think short hedges such as these will be increasingly important in this weakened stock market environment.
Rainier |
