Robert:
Call me old-fashioned, but when someone says "Forget about fundamentals", I run for the hills.
Yes, I have been saying eBay was overvalued since 80.
No, I don't kick myself every morning because I sold at 50. There are plenty of other reasons to kick myself <g>.
The fact is, if I had kept eBay, I would have sold it by now.
Sure, I would have loved to have bought a bunch at 25 and sold at 250. Who wouldn't? But I could say that about a lot of stocks, especially Microsoft.
The funny thing is that everyone knows this (and many other) net stocks are way overvalued. They all know there will be a big bust. Yet, these big busts come when they are LEAST expected.
I agree that eBay will beat estimates this quarter, because the analysts have been sandbagging. I expect revenues will be about $18M, maybe as much as $19M.
Annualized, that means eBay trades at a price to sales ratio of 125.
By contrast, I believe that Microsoft's price to sales ratio has never been higher than 20.
At a price to sales ratio of 20, eBay would trade at about $40 per share. |
