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Technology Stocks : eBay - Superb Internet Business Model
EBAY 93.02-3.2%Jan 16 3:59 PM EST

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To: TokyoMex who wrote (1986)3/6/1999 12:04:00 PM
From: RetiredNow  Read Replies (1) of 7772
 
The thing he doesn't tell you is that when it falls 50%, it will take 75% of the people who own the stock into red territory. For all you believers out there, consider this. I read an article that said there is growing belief that amazon will be bankrupt within 3 years. Why? Because the banks are coming off their euphoria at lending to an Internet company and are starting to wonder if they will ever be able to collect on the debt amazon has (they borrowed $75 M last year and $325 M this year). Also Amazon's cash flow sux because margins are so slim. Amazon will never make money yet its market cap is $19 B! Go figure.

So for those of you wondering how to value a company, try calculating price to economic cash flow. This measure has proven itself to have more correlation to market value than PE. Here is a link to an article that I suggest you all read on valuing today's companies:

rcmfinancial.com

When I have time, I will try to value E-Bay based on the above premises and see what I come up with. Good luck folks!
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