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Technology Stocks : Creative Computers(MALL)

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To: Tom Hua who wrote (383)	11/23/1998 8:17:00 PM
From: Clarksterh	Read Replies (1) of 1634

Tom - I used WS valuation for comparable computer auction net stocks as a benchmark for UBID, specifically the leaders in the field ONSL. It turns out EGGS (no more brick-and-mortar, all net now as you know) is getting almost the same valuation as ONSL too. I agree that uBid is not deserving of the same valuation as eBay because it has much lower gross margins. But neither is it deserving of the same valuations as ONSL or EGGS. Although these two companies have margins much closer to uBid's, they have none of the growth of uBid. uBid is more than doubling revenues every quarter, albeit on a gradually slowing curve, while ONSL et al are only growing revenues at a few 10's of percent a quarter. Put it another way - if uBid's does the following completely reasonable sequential growth (Q+1 - 150% (Xmas), Q+2 - 70%, Q+3 - 55%, Q+4 - 45%) then they will revenues of more than $150M per quarter in less than 1 year. At a P/S ratio of 1 that is still a price twice the current stock price. It is that that convinced me to dip my toe in the water, although I admit that it gives me the heeby jeebies. Clark

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