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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: Bill Harmond who wrote (4018)12/9/1997 7:37:00 PM
From: Bill Wexler  Read Replies (2) of 27307
 
<<Youre ignoring the run rate and including historical losses>>

I'm not ignoring the run rate. I would argue that it is too premature to project the current rate into the future. I have already pointed out (what is it now...100 times already?) that it is relatively simple to grow from a few million in sales to a few million more...but it is dangerous to extend this early growth rate too far out.

I really have nothing against Yahoo, but long experience has taught me that overpaying for these story stocks too early in the game can be detrimental to your financial health. You are making a 1 to 3 billion bet on a company with a very short track record and a double-digit PSR. I don't care how good the story is - when a stock price inflates to unrealistic levels relative to sales and earnings then time becomes your enemy, since the stock will require more and more of it to "catch up". And you know what else can happen if general market conditions should turn south.

In essence, you are betting that market conditions will remain stable or improve and Yahoo's earnings will grow so fast that the current price will seem reasonable. You now have a 60 PSR and over 1200 P/E to grow into. Good luck.
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