Biased Media
I fail to understand what the media and analysts have against Netscape. Various explanations have been offered for the today's jump in Netscape's market valuation. The most common argument given was that market has overreacted to Homer's comments on Tuesday that Netscape was in talks with various media companies about possible alliances. The same news articles also quickly brushed aside investor exuberance stating that investors may have read too much into Homer's comments. Some even said that the buying frenzy was unjustified and only proved their theory that investors had lost all sense of rational thought and were only gambling at this time.
"They (analysts) said the widespread willingness of people to buy the stock on the basis of Homer's general comments underscored the gambling mentality that had overtaken the whole sector of Internet stocks."
"It's a speculative bubble, regardless of the company's price or its valuation," Bob Walberg, chief equity analyst with Briefing.com in Chicago, said. "People are trying to get involved in the next 'deal company,' and the valuations are becoming obscene."
If they are calling Netscape's valuations obscene, they don't know what they are talking about. Yahoo, Excite and the likes - I'd agree, but certainly not Netscape. Come on. Netscape stock price has hardly moved, given so much positive news coming out of late.
Anything can happen in the short time. But I maintain that for the long term, Netscape is bound to go much higher; their business plan, based on AOL's successful strategy of signing deals with many business partners to increase their revenue stream, is definitely the way to go.
Netscape has played catch-up to Yahoo and other content providers and is now closing the gap with clear intentions. Investors are beginning to see that. Look at their management and you'll clearly see one motivated bunch of people. The only thing which did not catch up so far is their stock price. It is too early to say but looks like it is finally happening too, if today's rally is any indication.
The best part is that Netcenter gives only part of Netscape's full picture. Netscape is now beginning to make strong inroads into the enterprise market - Citibank, John Hancock etc. There are rumors of other pending deals with Federal Express, Ford Motors. So how can things not be upbeat?
I feel the turnaround is finally happening. As always only those who are patient and have long term investment goals will gain the most. The volatility in the stock price will surely kick in, given today's surge, so while there may be downturns and consolidations, the trend to me looks upwards from here on.
Chet |
