Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Dryer who wrote (12374)	9/24/1999 9:44:00 PM
From: GraceZ	Read Replies (1) \| Respond to of 28311

is Go2Net at a $2.9 billion valuation overvalued relative to Yahoo which has a $55 billion valuation (including Broadcast.com)? Lorraine Wang (if she really did make the "under $10" comment to the Forbes reporter) better be looking for another job... a non Wall Street job. Jeff- You are as ticked off as we are reading these analysts (that obviously did little or no research), saying ridiculous things in trusted, mainstream, financial magazines like Forbes. But, look at the bright side, every time I see stuff like that it points up how much the individual investor needs a place like SI to sort the truth from the drivel. I can't tell you how many times I've sat here yelling at the TV because of blatant inaccuracies on CNBC. (My husband thinks I'm over the edge!) I know that these are things are inaccurate primarily because of information that was brought forth and debated right here on SI. (sometimes exhaustively so) I come away feeling sorry for those people out there that rely on this constant stream of mis-information from some of the mainstream financial press. What ever happened to magazines that prided themselves on never having to print a retraction? Are there no fact checkers left now that the media conglomerates own all the magazines? Thank goodness we have SI!

To: Jeff Dryer who wrote (12374)	9/24/1999 9:50:00 PM
From: V.	Read Replies (1) \| Respond to of 28311

I'll be sure never to get on your bad side! ;) All you said is true though, and analysts are not held responsible for the damage they cause and the misinformation that they disseminate. It's just part of the game. Their game - which is to instill emotional reactions of panic/fear or elation in shareholders of companies about which they know very little much of the time. Today it's overvalued and tomorrow it's a strong buy, depending on how quickly they and theirs can get in and out of the stocks themselves. I do not run around screaming, "Manipulation!" but it makes no sense as to why any of these prominent brokerage houses would allow such total crap to be made public by their analysts besides what I'm suggesting above. They need to be held responsible for what they say and back-up their assertions with the numbers. Either there is no real research and/or understanding of the very companies on which they are reporting, or these people need a crash course in elementary mathematics. Many of the members right here on SI have a much better handle on financials and valuations analysis than these supposed 'experts'. They understand the meaning of the term "DD". It's pathetic. A retraction/correction is in order and if the tables were turned, law suits would be flying. The same standard needs to be applied by all. Take some responsibility for what they write, or take the heat. That's what's needed here. Though investors should be responsible for their own decisions, the effects of misinformation in the media should not be discounted. The brokerages are being paid handsomely by their clients to provide a service and when they abuse that responsibility, only they are to blame. The effects on the overall market due to such comments can wreak havoc on even the most well-informed investor because when big money talks, many will listen regardless of whether what they're saying is BS or not. IMO.

To: Jeff Dryer who wrote (12374)	9/24/1999 11:28:00 PM
From: Obewon	Read Replies (1) \| Respond to of 28311

Jeff, It sounds like Lorraine Wang applied only an income and asset approach to your company. On a market approach, of course, your company is valued by the current value of the stock. The income approach depends on all the company's future cash flows discounted back to the present time. Seeing the current lack of revenue ($15 million is less than most private businesses I value) and rather insignificant earnings (even if they are slightly positive), getting a large present value out of your cash flow is difficult. Personally, I wouldn't be surprised if it is negative due to the capital expenditures that your company will be making. Added to the strange events that have come together to create the current Internet craze is the abnormally low discount rates that are applied to Internet companies. Usually the risks involved with a company like yours would require a return on equity of 35% or significantly greater as opposed to a relatively stable business like car dealerships which may have a cost of capital of 16%. However, instead of having a cost of capital of 35%, venture capital firms have been throwing money at Internet companies for an essential cost of capital in the single digits or less. It is a fact that most Internet companies will never make a penny in earnings and are therefore worthless from a fundamental point of view. However, the market has put such a ridiculous value on these worthless companies that one must make the statement, "Well, if THIS (worthless) company is worth $1B, then Go2Net must be worth more because it has better fundamentals." Someday, probably when the economy starts significantly slowing, people are going to realize en masse that the earnings can never justify the current price levels and ALL the Internet stocks will get crushed even if they can show earnings. Venture capital firms are going to in turn be burned by their heavy recent concentration in these issues and the supply of equity capital will dry up so fast that the entire economy is likely to tank HARD since the banks are also going to be affected and need to raise the cost of debt capital. That being said, it sounds like she needs to do a little better at explaining her justification of less than $10 rather than just throwing it out into the market. BTW Congrats to your brother's upcoming event! Obewon

To: Jeff Dryer who wrote (12374)	9/25/1999
From: Carolyn	Read Replies (1) \| Respond to of 28311

Did anyone from Go2Net contact her after the article was published? Or her supervisors? Or Forbes? SEC? Do you ignore it or address it? (I don't know the best thing to do in these cases.)

To: Jeff Dryer who wrote (12374)	9/25/1999 12:29:00 AM
From: Sarkie	Read Replies (1) \| Respond to of 28311

Jeff, We have been discussing this article since Tuesday evening after KLP so graciously typed it for the benefit of the thread. Message 11321433 I don't know if you read the posts, but you are not the only one Lorraine Wang angered with her comments. I feel that for some reason she singled out Go2Net to try and prove her point. Unfortunately she failed to research to back up her argument. The worst thing is that there are many people out there that will take her comments as fact, and GNET will leave a bad taste in their mouth. Lorraine Wang, Robert J. Sherwood, Morgan Stanley Dean Witter and Forbes should be held accountable for allowing this type of misinformation to be printed. ~Sarkie