Yahoo and other bubbles...when will they burst? Message Board

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Strategies & Market Trends : Yahoo and other bubbles...when will they burst?

YHOO 52.58

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Jun 26 5:00 PM EST

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To: marion (Hijacked) who wrote (11)	1/31/1999 10:01:00 PM
From: Dave Mansfield	Read Replies (1) of 139

The main reason marion formed this board was to foster a discussion about how and when this bubble might burst. That obviously assumes that this indeed is a speculative bubble that must burst. Some might argue that Yahoo deserves this valuation and that there is nothing to burst, but I believe most here consider it a bubble. So back to the reason for this board. I'm still formulating a more definite plan as to how when it will happen and how to play it, but my thought is the bubble will pop when it becomes apparent that Yahoo cannot grow it's revenues and earnings to the degree necessary to support this price. I don't believe it will be a market issue based on the collapse of Brazil or a general crash in the market. So when will the realization set in that Yahoo cannot grow fast enough? I believe an inkling of that might occur when the current quarter's earnings are released. They might actually show a slight drop from the last quarter, the Christmas quarter. But that will probably not be enough. Perhaps when Softbank can no longer sequentially increase their advertising spending on Yahoo. That could be three or four quarters down the road. And I'm sure that the fourth quarter of 1999 will again be a good one. But not as good as 4th quarter '98 over 4th quarter '97. Lets say 4th quarter '99 can be $0.31 or about a 50% improvement over 4th quarter '98. And then the first quarter '00 a drop from there to about $0.25 (but an increase from first quarter '99). That's my guess. 2nd quarter '00 when they announce first quarter '00 results that will indicate that the price cannot be supported. In the meantime I see Yahoo trading anywhere between $250 and $500. So I'm out for a while unless somebody else can paint a scenario where the crash might happen sooner that sounds convincing to me. Dave

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