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Technology Stocks : InfoSpace.com -- Ignore unavailable to you. Want to Upgrade?

To: Spytrdr who wrote (1833)	4/4/2000 7:43:00 PM
From: Guy E. Fleming	Read Replies (2) \| Respond to of 3070

Kill the caps.

To: Spytrdr who wrote (1833)	4/12/2000 10:13:00 PM
From: Spytrdr	Respond to of 3070

the populace is coming to the realization that the emperor, indeed, has NO CLOTHES... from Briefing: "InfoSpace, Inc (INSP) 62 5/16 +1/16: Based on the performances of stocks like Motorola (MOT), In Focus Systems (INFS), and Research in Motion (RIMM), we know that techs aren't responding in a positive way to earnings news... This is bad news for market bulls as most expected the strong quarterly results to add fuel to last week's recovery try... So far no dice... Another sign of trouble is that techs aren't responding to favorable ratings and/or price targets... Take InfoSpace (INSP) for example... Wedbush Morgan (okay it's not Goldman) initiated coverage today with a STRONG BUY rating and a price target of $240... That's right $240, or 285% above current levels... A couple months ago news like this would have resulted in a quick 20%-30% pop to the upside... In the current environment, it's good for a tiny (1/16)... What gives? Aside from the obvious change in sentiment, reality appears to be creeping into the Net world, and that is bad news for stocks like INSP... As Briefing.com pointed out in a recent Brief entitled, the P/S Ratios & the 24 Riskiest Stocks, INSP traded at over 400x sales - an astronomical valuation which left no room for disappoint (or a change in market sentiment)... The stock has fallen sharply since then but still trades at very high levels (365x trailing 12-mo sales)... Equally troubling is the fact that INSP isn't projected to earn a profit until FY01, and even then the gain is a relatively puny $0.07 per share... Gross margins are very high (85%), and if INSP can sustain those margins going forward it's easy to see how earnings will ramp quickly... But Briefing.com doesn't see any way to make the math of a $240 price target work... Maybe we will enter another period of market mania and analysts will be able to make a name for themselves by throwing out seemingly outrageous price targets only to see the stocks take them out amid a flood of fast money... Until then, however, we're afraid that some of the old valuations rules are beginning to apply to the new economy leaders... If true then the selling in INSP could be far from over... Traders should note that the stock recently split 2-for-1 (removing a buying catalyst) and is due to report earnings on 4/26... Street looking for a loss of $0.06 v. $0.00 in same period last year... Now that's a headline that makes you want to pay 365x trailing sales - not... First support is in the 50-48 range -- RW"