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Technology Stocks : Booking Holdings (formerly Priceline) -- Ignore unavailable to you. Want to Upgrade?

To: Victor Lazlo who wrote (2365)	5/3/2000 10:13:00 AM
From: Joe Mintz	Read Replies (1) \| Respond to of 2743

It should be kept in mind that PCLN represents a rather young company whose early growth has far outpaced even that of AMZN for example. The conceptual framework underpinning the business is new, and with anything pioneering, difficulties remain impossible to entirely avoid. It is key, however, to focus on the big picture and on where this company is heading in the longer-term. There clearly do exist some downside risks for any stock. To avoid any chance of capital loss, one has to confine the range of possible investments to T-Bills or similar vehicle. Concerning the share-compensation scheme, this has had the benefit of helping to propel growth to an astounding pace, but this does pose a risk for the supply side of the stock. Major airlines such as Delta have dumped holdings of PCLN, which may have contributed to the weakness in the stock, already compounded by a soft market. I would be careful not to overestimate the impact of this in the long-run. As the networks of participants are built up, the expansion in the float will gradually be disposed of. This is a temporary factor for the supply of shares, given that the core group of airlines, hotel chains, etc. will tend to solidify near the outset. How likely is it that a significant number of new airlines will be signed on, for example, leading to additional payment of shares? After a certain point, the expansion in business is likely to stem mostly from increased volume of transactions, given the network already in place. And the apparent trends seem promising indeed. But it does remain appropriate to view this factor as a potential concern for short-term movements. On the other hand, growth has been nothing short of phenomenal, supported by this strategy; revenue results have surprised even the most optimistic participants. In the longer-term, the brand name status of PCLN will prove key, associated with their scope and ease of use. The recent figures have shown to what extent consumers are willing to rely on these services. I do not necessarily agree that the airlines themselves could easily form a type of joint business operation resembling PCLN. History shows that cooperation has been difficult to achieve in this industry. More generally, collusion in industrial organization has been unstable; prolonged maintenance of agreements represents the exception and not the rule. An able, outside operator like priceline.com brings together the necessary activities under one stable umbrella. One should not neglect their technical expertise and their ability to execute smoothly in the face of a massive explosion in demanded transactions. Also, once the network comes into being, it can amass significant value and become exceedingly difficult to replicate; first-mover advantages apply here strongly. I believe that the investment community is correct in their bullish long-term outlook for priceline.com. Targets around 150 are typical and may be eventually surpassed by a wide margin. Still, the short-term risk is considerable here. Margin should be used with care. In the long-term, not playing this stock may lead one to miss out on one of the great gems available in the market today. I believe that this risk of failing to seize this opportunity may prove far greater than the chance of downside price action. Anyway I am happy to hear some conflicting opinions, particularly since one of my main worries with PCLN has been the apparent unanimous consensus on positive developments. Regardless, time will tell. Going long here provides an edge; but that certainly does not imply a risk-free proposition. Good luck, JM