Victor, I guess that this is another place we'll disagree, though we do agree in some parts. Internut valuations are/were based on the premise that they would produce profits in a tolerable number of years. I see no difference. Some will, some won't, just like the biotechs. In the internuts there will definitely be consolidation, another similarity.
I also disagree that internuts can easily adapt their business plan, and that Amazon could just flip a switch and become profitable - at least not for long, and not profitable enough to justify their valuation. One of the things I am watching with interest is the progress of various E-tailers as they burn down their cash. Many have only enough to last another quarter or two. Some have already tried to "adapt their business plan" (e.g. BYND), but are still burning cash though they have eliminated their growth. In the end I expect some traditional retailers to purchase them for a song, possibly out of bankruptcy. Too bad I didn't short them.
As for CMGI, I can't comment specifically because I don't understand them. As for NETP, I disagree strongly with your statement that they were never grossly overvalued. At its peak of 66 it certainly was overvalued. The PSR was up around 70 times the most recent quarter. In the end NETP will probably trade at a PSR of about 3, and it is still at 6 times the most recent quarter. Thus if NETP doubles its sales by the end of the year it is possible (though not likely) that the stock will not rise at all. My expectation of a price in the 20-25 range by year end is based on an assumption that the PSR will gradually fall as the company grows.
FWIW I did own NETP last fall. I sold it at 41.5 (on the way up) precisely because I believed that it was grossly overvalued. I repurchased at about 16, and then took some profits at 19 (but not enough - LOL) because it was getting overvalued given the anti-internut attitude. I do think it is a good value here, but I haven't repurchased any shares recently.
Carl |
