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Technology Stocks : StorageNetworks, Inc. (STOR)
STOR 32.210.0%Feb 3 4:00 PM EST
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To: David Hansen who wrote (34)7/12/2000 10:50:42 AM
From: Rupert  Read Replies (1) of 187
 
It's true that I don't know how to assess the valuation of STOR. STOR seems like a good idea and I had hoped to buy the stock. It's just that according to Quicken, the present market cap based on the current stock quote is $9.5 billion dollars:

quicken.excite.com

This means that if you are buying STOR now in the hope that it will double, you are placing a bet that the company will be worth almost $20 billion dollars. This just doesn't sound like a good bet to me. Please compare this market cap to other, better known companies that have been around for more than a year or so and the revenues of which fall into more than 7 figures.

We've seen this pattern too many times recently (PALM, LNUX, FMKT, etc): A high flying IPO gets lots of attention (in this case from Gilder), gets a massive valuation, and then turns into a ski slope in which individual investors are left holdng the bag. Might not happen in this case of course, but I don't want to challenge the odds here.

I'm generally looking for quality IPOs that are overlooked, and was hoping that STOR would be overlooked as well. It wasn't. The overlooked IPOs have been better bets for individual investors than the high flyers:

Message 12815186

PS. Just noticed that while I was writing and editing this post, the market cap of STOR went up 7.5% ($600 million)!
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