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Strategies & Market Trends : Shorting stocks: High fliers
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To: Q. who wrote (437)3/20/1998 3:39:00 PM
From: Funda  Read Replies (1) of 709
 
Most Internet stocks have potential intrinsic value

I can't help pointing out, that Internet stocks are future oriented businesses. While their PSRs may not look good, that is not surprising - most of these companies just opened shop. And many of them have valid businesses and good revenue growth.

At this point in time there are no indications either way as to whether their business models will hold up. So going short or long in these stocks is a gamble.

As to the bigger names like Yahoo, their valuations are based on the number of hits their sites get. The thinking is that companies with more hits ought to be able to attract and charge more for adverising. Like a newspaper with larger cirulation gets to charge more and also attracts more ads.

I don't hold any positions in any of these, but would be very careful shorting them - the Internet sector is one of the hottest sectors now, so it may be a long wait.
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