The stock has held up well despite the turmoil.
Friday's rally on light volume bodes well for next week.
What we have seen has been a dramatic shift in investor sentiment to a preference toward positive earnings in the near horizon.
This change has represented a major turnaround and no one could have easily predicted that it would come about so quickly, or even at all. Thus, because the transformation in investor perceptions was both extreme and unforecastable, the impact has been incredible.
Newspapers, magazines, etc. will continue to talk about it. But it is too late. The market has already incorporated all of these newfound fears into prices, and appears rather overdone in some cases (particularly in the case of ETYS).
We have witnessed a crash in internet stocks generally. Time to look ahead. The lessons for short-term risk management are clear, however.
BNBN will increasingly benefit from its strength in the fledgling e-book sector. It represents by far the number one player in this revolutionary field that promises to accelerate rapidly in coming years. The "writing is on the walls", as one might say. Names such as Mr. Bill Gates are associated with these novel developments.
barnesandnoble.com promises to bring electronic publication to the broad public. No matter how sound the underlying technology is, this role of making it widely available and easily acceptable to the consumer typically proves crucial.
It should be stressed that bn.com is the first mover here.
In my opinion, they are also the best all around online store for books, software, and music.
Furthermore, they anticipate profitability by 2002. Even so, the backing of parent Barnes&Noble and media giant Bertelsmann provides a security blanket elusive to most other net enterprises.
I think these positive factors may be increasingly incorporated into the share price as time passes.
It is shifts in sentiment which drive stock prices, and in this case, a change to a rosier outlook has become more probable.
As the past few weeks have reminded us, though, it remains important to take into account the risk of short-term fluctuations.
Based on the current negative gauge of sentiment, there is a massive degree of short interest outstanding in BNBN. In the face of positive results, this could intensify any emerging positive trends, thereby leading to surprising rallies. Nonetheless, the market may remain a bit shaky overall.
Good luck,
JM |
