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Technology Stocks : All About Sun Microsystems
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To: DiViT who wrote (42573)4/2/2001 5:10:02 PM
From: Wayners  Read Replies (1) of 64865
 
Before the Andy Neff reductions I'd figure short term players would be willing to only pay $3.13 for book value and another $4.80 for future earnings based on an estimate of .36 cents for earnings over the next year and interest rates of 5.5% and sales growth of 13%. These new numbers put even these low numbers into jeopardy. The sad thing is this is how short term players value this stuff, with complete disregard to what's a realistic long term growth rate. Thats why you end up with severe under and overvaluations of growth stocks. They'll only pay a multiple on whats "visible"--which is a code word for if we don't buy till we get the inside forward looking sales information so we can basically make money without ever assuming any risk.
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