Altaba Inc. (formerly Yahoo) Message Board

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Technology Stocks : Altaba Inc. (formerly Yahoo)

AABA 19.63

0.0%

Nov 6 4:00 PM EST

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To: Charles Hughes who wrote (765)	6/18/1997 12:53:00 AM
From: Bill Harmond	of 27307

Please tell me. The market pays a discounted(by interest rates) price for future earnings. If, as expected, YHOO makes $0.50 in 1998 on a doubling of 1997 revenues, it could earn $1.00 in 1999 on only a 50% increase in revenues from 1998. If revenues double in 1999, earnings could triple to $1.50, based on the current expense model. About this time of summer the market starts discounting next year's earnings. This time next year the market will be looking at 1999. Assuming the money markets cooperate, the stock could be selling well above 50x 1999 earnings one year from now. Call it $1.00. Use 70x, the current forward P/E. That's a double based on conservative earnings potential. If content or commerce providers start paying Yahoo for premium listings, like CUC International has just agreed to AOL, then earnings could be much higher still. The industry is emerging and there are plenty of risks. But to be betting Yahoo! short is like playing with dynamite.

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