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Technology Stocks : eBay - Superb Internet Business Model

EBAY 87.09

0.0%

Dec 31 3:59 PM EST

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To: John O'Neill who wrote (2696)	4/16/1999 11:03:00 PM
From: Barry Brugman	Read Replies (2) of 7772

Is It Worth $2.3B, though? >> i think 4 million auctions/week, >> at $2.50 per auction, >> 10 million per week, >> 520 million cash machine per year, Your numbers assume a doubling of the auction count, and they don't include advertsing income or any expenses. I'll accept them as an optimistic rough estimate of the potential a year from now, though. What do you think a cash flow of $500 million a year is worth? EBAY's current market cap is about $2.3 billion. Would you pay $2.3 million for a company that had a cash flow of $50,000 per year? I sure wouldn't. I would put my $2.3 million to work elsewhere. The only possible justification for paying today's price is the hope that someone will pay you even more for your shares in the future. Sooner or later, there won't be enough such buyers left out there. it is only a matter of time. I agree that EBAY will be a very successful company, but it is wildly overpriced at this point, and it will inevitably come down. The only question is - when?

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