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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: peter shi who wrote (3047)	11/21/1997 7:42:00 AM
From: Pancho Villa	Respond to of 27307

Peter: RE shorting YHOO> you did better. I went in at 513/8. Don't be so sure this puppy won't scare you. It will, but if you are patient and don't chicken out [IMO] you will be rewarded. Pancho

To: peter shi who wrote (3047)	11/21/1997 8:59:00 AM
From: William Minich	Read Replies (2) \| Respond to of 27307

Another short here at 53 1/2 as of yesterday. Why ? Grab a cup of coffee and read on......................... I believe that the price of many of these trendy Internet stocks defy sound reasoning. Now I certainly wouldn't fault short term investors here..they have simply been riding the trend...a smart move for any investor ! But long term I have my concerns..especially when it comes to companies like Yahoo, Excite, or Infoseek. I do a lot of work in the Internet industry and spend hundreds of hours online per week. I would ABSOLUTLY agree that the Internet (or at least the concept) will indeed make radical changes in the way we live and conduct business. The net is already my biggest source of information and I only see that growing....however, I believe we will see massive changes as the concept grows from adolescence into maturity. New user interfaces, more powerful bandwidth (a necessity), and global standardization will be the keys to this I believe. However, as we move from point A to point B, companies will come and go. Anyone here remember how large the user base was only a few years ago for software products like WordPerfect or Lotus 123..heck go back before that and you'll find market monoliths like Visicalc and Wordstar ! Times do indeed change..or at least markets do... Now Yahoo has a nice set of services. I personally use their International market page and find it to be extremely useful (http://quote.yahoo.com/m2?u), but what specifically warrants the stock's price ? Assets ??... Is it equipment...do they have that much equipment ? ....no nothing even remotely close, besides computer equipment depreciates extremely fast... Ok, maybe it's patented technology ? Does Yahoo own some powerful technology that's inaccessible to other companies...I don't think so... hmm...ok, then it must be profits....Surely Yahoo has powerful profits to justify it's price ??...well...er I guess I'm wrong there too..but close ! Alas - Indeed the price must be based on future profitability ! Now, assuming that Yahoo could actually create earnings to justify it's stock price, I wonder what would actually happen ? I believe that if that occurs, BIG publishing players will jump all into their niche market ! Remember what happened when eTrade started showing strong sales and earnings growth......amazing how all these brokerage firms suddenly became "on-line" discount brokers. Profits motivate... No, the BIG publishing companies haven't broken into their industry yet..but there are plenty of companies that have the capital and resources to do exactly what Yahoo is doing...heck simply pick up your phone book and turn to the yellow pages...Why haven't they ? Obviously, the profitably isn't there yet.. Now one could argue that some said the same thing about television networks in the 50's. They too had to rely on content creation and advertising....and look at their growth !... however there's one MAJOR difference here....something economists like to call "barriers to entry" The early broadcasting companies had expensive equipment and entertainment personalities under contract (a monopoly themselves) that one could not simply duplicate. On the Internet, there are relatively few "barriers to entry" - this is indeed what makes it work in the first place ! Companies can move into a market with relative ease. Ok, maybe you're thinking.."well maybe that's true but with a great base of listings like Yahoo's, why wouldn't one of these BIG publishing companies simply buy them ?" A great idea I believe..but not for anything close to a market cap of 2 billion dollars ! ****************************************************************************** Speaking of market cap, here an idea...Now one of Yahoo's biggest assets is the number of customers that list their sites through the company. In fact if I had to name it's strongest asset, it would probably be that. Suppose I started a directory like Yahoos, slickly designed with lots of bells and whistles....I find the best 10 site designers money can buy..maybe get a few from Yahoo too..give em 5 million a piece for coming over ! Cost, 50 million. I then purchase the finest hardware possible for running the site. For illustrative purposes we'll say I spend 50 million here too. Next, I run an ad compaign to generate investment interest in the company and get people to visit the site...maybe I top the famous Apple Superbowl ad campaign and I spend 100 million dollars on that ! Throw in another 20 million for administrative costs and add 5 million for underwriting expenses.... So far that's a total of 220 million. Now to get people to list their web sites on my new venture, I pay THEM $ 10.00 each, we'll assume I want to start out with 1 million sites listed there...so that's a cost of 10 million.. I now have one of the fastest, best designed directories on the net with over 1 million listings and incredible name recognition...maybe I even call it "Hellyeah"...poetic justice for Yahoo.. My cost to date for all of this.... $ 230 million... Now, I take it public ...offer 43 million shares shares (that's how many Yahoo has). Your cost per share to invest in my little venture.... just $ 5.34 a share...the other $ 48.00 per share is pure gravy..that leaves an additional $ 48 per share to play with....by the way, based on a Yahoo value that's a little over 2 billion dollars I believe... Sounds good to me....YAHOO !!