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Technology Stocks : CMGI What is the latest news on this stock?
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To: The Vinman who wrote (459)4/30/1998 9:36:00 PM
From: Carlos Ferreira  Read Replies (1) of 19700
 
The value of company is exactly what someone else is willing to pay for it. If you don't want to pay $96, then fine, maybe someone else will. If there is no one else, then the price (value) goes down. Internet search engines company are perhaps the most misunderstood "internet" companies. They are really media stocks and not tech stocks. They are a "user" of technology. They do not sell it. CMGI's business model is not well understood. They are a venture capital company that specializes in providing capital and management help for companies to mature and then eventually be sold to to the public. The fastest and most profitable way to make money in the stock market is to take a company public. This is mainly due to different ways private and public companies are valued.

You complain that YAHOO has a market cap (value) of 7 Billion dollars. Well can you imagine owning even 50% of YAHOO before it went public? You would be worth 3.5 billion right now. This is the type of business the CMGI is in. Now, they can't do this every quarter or even every year, so critising last quarter's results or even the previous results is meaningless. After all they can only "make" a profit after selling a company or selling a portion of a company. Internet companies are not commodities.

By the way, most successful companies are "always overvalued". I have been saying this about Microsoft for at least 10 years. Had I only been "stupid" enough to buy some back then. The stock market is a sorry place for people to insist that they are right.

Carlos

BTW, I think the "market" doesn't know how to value this stock. That is why you get >5% price swings both sides day after day. Only time will tell. Best of luck with your investing.
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