Michael, I'm also a believer of the internet, but I've a hard time believing the valuation of many internet companies. Take for example, Sportsline USA (SPLN). The market cap is $418 M for a company that generated $10 M in revenues in 1997 but incurred $26.5 M in net losses. The company is expected to lose $2/share this year, that alone will wipe out 75% of its cash. It's expected to be in the red in 99 as well, I think we'll see a secondary offering this year, perhaps within a month.
Inspite of nightly promotion on CBS during the Olympics, the final tally showed that visits to SPLN's web site (CBS Sportsline) was ranked third, behind ESPN's espn.sportszone.com and Nagano's official web site.
And yet, the stock has almost tripled this year. IMHO, it's a good short, if not tomorrow, then very soon.
Regards,
Tom |
