To: Wyätt Gwyön who wrote (72118 ) 10/16/2006 10:59:34 AM From: ild Read Replies (2) | Respond to "Morgan Stanley's Mary Meeker, the 'Queen of the Net,' values (Google) at $500. She estimates cash flow for the next 10 years and how much the company will be worth at the end of that period and then figures what all that money is worth per-share in current dollars. The trouble with such discounted cash-flow models is that small tweaks of the assumptions -- the discount rate used to calculate current dollars, value at year 10, future growth rate and operating margins -- have a big impact on the outcome ... Bill Miller, money manager of Legg Mason Value Trust, applies more than a dozen methods to value Google. Relative analysis compares Google to the young Microsoft and other early-stage growth companies. Technical analysis examines where Google and other Internet stocks have traded in the past. He also looks to see what Google would be worth if its growth slows to the market's rate over various time periods. Using all that, Mr. Miller comes up with a price of $450 ... Mr. Miller calculates that Google's business options add roughly $45 to the price, which would make it worth a total of $495. This 'real-options' method has a similar drawback to others. Despite their precision, the assumptions upon which they're based are little more than hunches."
