Just got back home. Fortunately I wasn't around to watch this ugly market. Is sanity returning to the internet market? I say returning because though I'm sure many of you here don't remember it, the internet market was once fairly sane. Does anyone but me remember it? After netscape et al had gone crazy, wall street went into a "show me the money phase" and netscape and the rest fell like lead balloons for months and months on end. It looked then like some sort of sanity had possessed wall street. Of course, as we know now, and as I completely missed then, it was just a temporary phase and wall street went back to its insane valuations with these money losing fleeting companies. But maybe the bubble is finally bursting here. When sanity does return then amzn will trade for at very most 2 times the market cap of bks and very likely half or less the market cap of bks. Likewise priceline will trade at a small fraction of the market cap of one of the airline stocks probably. One way or another the price of amzn and bks must gradually converge. Of course we hope it's by bks going up as amzn collapses and not just by both going downward. But bks has a real decent p/e, unlike previous wonder stocks like zd, dbcc, etc. That provides some security. In fact, maybe bks could even be considered a value play but I guess it's p/e is slightly too high for that apparently.
Anyway, since I was in zd for its ipo zdz I remember that after the ipo announcement they masterfully had a new pr press release every couple of days which worked wonders to drive the price higher. I hope we can start seeing some of the same pr work from bks and gs now. We definitely need to see volume over a million. That prevents most of the manipulation from taking place. If they've got some good news, now is the time to lay it on us. Incidentally, great point whoever made it about the huge float bks is selling. Wow that's big. I hope that doesn't screw things up. Has there been such a big float before in one of these backdoor ipo's?
Let's get a nice pr release, a nice market day, and a million volume day, and see what we can do. I agree with American Spirit that bks might be the one exception to the rule and prove worth holding onto longterm. I mean it is the leading bookseller in the US so that should be worth something shouldn't it? When the market returns to sanity things like that will count more than they do now.
I hope the fate of aol doesn't impact this ipo. It shouldn't really. aol is definitely overvalued, though unlike amzn, pcln, and almost all the rest aol makes money, has a dominant position, and might really be worth its market cap in a couple of years so it's not as outrageous as the rest. It's interesting to speculate how much of amzn's problems right now might be due to bnbn coming after them. I think bks senses blood in the water, and I think that amzn still could drop another 50 points from here with a little luck. In fact, I believe that bks could be the new theme of the rest of '99, the return of the "establishment". The brick and mortar companies are now gearing up to fight the internet companies, and I for one wouldn't bet against bks hd wmt gps etc. They have the franchise and the name recognition already. It's really not that difficult to develop a decent internet site. That's why these internet valuations are even more outrageous. Competition is looming... |
