"someone posted earlier about the similarities between the internet stocks and the Y2K stocks and I agree. "
There is one BIG difference between Y2K stocks and internet stocks, internet stocks don't have a deadline.
Y2K stocks had to start performing before the year 2000. As 1997 came to an end lemmings who bought the stocks on hype started to sell when these high-flying turkeys didn't perform.
Internet stocks don't have any such deadline, the can keep going on hype indefinitely and lemmings will continue to buy. Case in point: AOL.
AOL is the premiere hype stock (YHOO is a new kid on the block), they have gone through earnings disasters, scandals, lawsuits and all sorts of rationalizations for lower values while befuddling bears. I have been reading about AOL's over-valuation and upcoming demise for years, yet the stocks continues to go up.
What's scary is that YHOO has just started to go up, they don't have AOL's expenses and drawbacks. They aren't expected to perform until the 2nd half 0f '98. If they announce another split, 100's is not unthinkable. With such a small float and so many eager shorts, they might achieve triple digits even without a split.
The key to remember is that this is unlike Presstek, Iomega, Zitel or another high-flying turkey. The "potential" can always be pushed out to tomorrow, and tomorrow might never come.
Buyer beware and Happy New Year! |
