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Technology Stocks : eBay - Superb Internet Business Model -- Ignore unavailable to you. Want to Upgrade?

To: Terr who wrote (6292)	1/18/2000 2:09:00 AM
From: Doug Fowler	Respond to of 7772

If Microsoft, with a market capitalization of $500B, buys a company like eBay and pays $20B in stock, and the company acquired is not losing money, then the MOST dilution it would cause for Microsoft is 4 percent. So, MSFT buying eBay would NOT be "badly dilutive" as you state. As for sales, eBay does not collect gross sales, it collects listing fees and commissions, so those are their sales, and they will be in the $300M area this year. In fact, these are very high margin sales, which is part of the allure of eBay. You won't get any argument from me that eBay is richly valued if not overvalued, but that does not mean a company like Microsoft could not derive great benefit from buying it, especially if the acquirer has better management and a better game plan for leveraging their position.