To: Boplicity who wrote (3050 ) 7/26/2000 9:30:03 AM From: Wyätt Gwyön Read Replies (1) | Respond to What's your take on the market through Oct? sales . JDSU and SDLI are not much better, but at least these three are real companies with real sales (unlike CORV). If CORV hits 100 tomorrow, it will have about a 33BB market cap. That is absolutely insane for a co with no sales (there are planned sales to customers WCG and BRW, which should make a killing off their CORV warrants/shares). This kind of thing breeds cynicism in market efficiency, as far as I am concerned. The customer gets money off stock-price appreciation and can therefore afford to overpay for equipment. The startup can then claim that they have "real" customers. This makes it look like the startup has real sales, even though the sales were perhaps heavily influenced by the warrant/share/option grants that may effectively pay for the equipment (and then some). By accepting these "sales", the market can then attach a fancy multiple to them to prop up the market cap and say it's not hype. Meanwhile, the relative valuation game gets played, and people can say, "Well, if CORV is worth 30BB on no sales, then XYZ must be worth 100BB since it has sales of 500MM!" Certainly FO is a much more legitimate (profit-potentialwise) sector than B2C or B2B, but the same momo mentality gloms onto it and distorts the valuations. I'm increasingly uncertain that I'll ever be a LTBH investor, but I'm trying!
