Some good remarks.
<<Well, it depends on what you use to value companies. If you use price to sales, then EGGS is undervalued with respect to it's [sic]competitors. >>
But we went through this already- just as it's a mistake to look at PERs in isolation from eps growth, so too it's a mistake to look at PSRs in isolation from top line growth. And as I mentioned before, when comparing EGGS to other online retailers, it doesn't have the same kind of revenue growth rate, and so there's no reason why it should deserve their (IMO, silly) multiples.
Ohh, and as far as the land grab thing is concerned- that's true for some companies. But not every company that has something to do with the internet is in virtue of that fact an "internet company". Portals are one thing; but just because I sell beenie babies over the web doesn't make me some juggernaut- it just makes me a beenie-baby-seller that happens to exploit the web as a means of "disintermediation" (yadda, yadda, yadda). For most companies, the internet aspect of their business is a temporary advantage to sales (though not earnings, yet)- there are no barriers to entry, and but for a momentary lead, soon everyone will be doing it.
Anaxagoras |
