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Technology Stocks : eBay - Superb Internet Business Model
EBAY 91.75-2.2%1:54 PM EST
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To: JF2155 who wrote (3136)5/5/1999 12:11:00 PM
From: paulmcg0  Read Replies (1) of 7772
 
<<I just doubled my long position on EBAY at 170>>

Yes, an example of the kind of person the capital loss part of Schedule D on the tax forms was invented for!!

My prediction over the next few months is that EBAY will drop below 150, then 100, then maybe 50. It's like the limbo -- how low can you go? By any measure of value investing EBAY is way overpriced.

A simple question -- what happens when more people want to sell EBAY shares and fewer people want to buy EBAY shares? What happens when people start getting margin calls because EBAY is declining and dump their shares further forcing the share price down?

And don't expect new buyers to come rushing in to bail you out. A number of people now realize that stocks in general, and Internet stocks in particular are far too expensive, and are sitting around waiting for share prices to collapse so they can buy stocks at a discount.

The mania for Internet shares is similar to other financial manias. You might want to go to your local library and find Mackay's book "Extraordinary Popular Delusions and the Madness of Crowds" and read about financial manias in the past such as the Dutch Tulipmania and the one over the South Seas Company.
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