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Technology Stocks : eBay - Superb Internet Business Model
EBAY 87.10-0.8%Dec 30 3:59 PM EST
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To: Doug Fowler who wrote (2570)4/11/1999 1:02:00 PM
From: Jing Qian  Read Replies (1) of 7772
 
Doug, you are right. The first big question is if the sales growth would actually grow to 128 Billion from 3.8 Billion today. No body can predict for sure, but this is Keenan Vision Inc.'s best estimate.

I have a different opinion on the valuation of eBay when the total sales grow to 128B/year. My opinion is that eBay may as well maintain the same valuation in 2003 as it is today, i.e., P/E of 8300. My point is, if the market really grows like that, Internet would have proven itself as the main engine for the economy. By that time more people would have believed in the netsocks as a real thing and more money would be pumped into the Internet market to maintain that valuation. You know, from the latest research, only 15% of total investors have a Internet stock in their portfolio. But we might expect a lower P/E because I believe in the later phase of development, earnings' growth will outpace price growth. That's what is happening to AOL. 128B/year sales to the online auction market might be only 1/3 of the way to the supreme height. I don't know how high that would be, 6 trillion? anybody's guess. So, I feel eBay might stand a chance of sustaining its price appreciation in line with the sales growth per year. That means eBay could multiply 30 times from now.

But for now, I am not going to fantasize that 30 times appreciation.
It would be great for me to see eBay rise 10 times which is very reasonable and rational to me.
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