Just bought long ETYS at 2.56 They will survive the e-tailing shakeout and one might be hard pressed to find better pricing on the stock and the season for good stuff is around the corner.. Some quotes from analysts on how its a far different story than Pets.com.
"Mr. Blodget said there's a good chance that eToys (ETYS), Buy.com (BUYX) and Webvan (WBVN) will eventually raise more capital because they are larger and closer to profitability than this week's casualties. But until it becomes clear that they will be able to raise funds, Mr. Blodget thinks the upside potential for trio's stocks is limited.
He estimated that eToys has three quarters of cash left before it would need to raise capital, adding that management has indicated it would need an additional $100 million to $150 million to reach profitability or break even. Webvan has cash for nine to 12 months of operations and needs an additional $80 million to $100 million by the third quarter of 2001. Mr. Blodget thinks Buy.com has enough cash to break even next year, but the company has said it may have to raise working capital.
At 4 p.m. EST on the Nasdaq Stock Market, eToys shares slipped by 78 cents, or 23%, to $2.56, while Buy.com shares dropped 28 cents, or 15%, to $1.65 and Webvan shares declined by 31 cents, or 19%, to $1.38. Earlier in the day, shares of EToys and Buy.com hit 52-week lows.
Other analysts said that despite eToys' continued stock drop and Pets.com's downfall, the toy seller should see strong holiday season sales and has good long-term viability.
Melissa Williams of Gerard Klauer Mattison & Co. in New York said Pets.com wasn't a fair comparison to eToys. She contended eToys is poised to have a very strong holiday season thanks to improved capacity and order management, and still expects the company to have earnings before interest, taxes, depreciation and amortization in the second half of fiscal 2002.
EToys spokesman Ken Ross said the company is "well prepared and well positioned" for the holiday season. He added that the company stands behind its target to break even in fiscal 2002, which ends March 31, 2002.
Analyst Kevin Silverman of ABN AMRO Inc. in Chicago said eToys will have a bit more trouble raising about $100 million to $150 million in new funding next year due to the dot-com fallout. But the company is "clearly on a ramp to profitability" and revenue for the holidays should double. He also expects eToys to break even during the second half of fiscal 2002.
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