Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: chmaj who wrote (7090)	2/2/1998 10:13:00 PM
From: Zebra 365	Read Replies (1) \| Respond to of 27307

Chmaj you wrote: <<A question to all: if aol has a 10 billion valuation, why can't yhoo have such a valuation as well?>> Good question, lets compare revenues, not EPS to look at valuation. Since these are both internet companies, a dollar's worth of revenues should be roughly worth the same to a shareholder. AOL: 2,442 million gross revenues in 1997 (My best guess by trend, actual report 2/6/98) 103 million shares. Generating about $23.70 per share in revenue. So, at todays closing price, 100 1/8, you would pay $422 to buy stock representing $100 in revenue at AOL. YHOO: 67 million gross revenues in 1997. 43.1 million shares. Generating about $1.50 per share in revenue So, at todays closing price, 66, you would pay $4,400 to buy stock representing $100 in revenue at YHOO Let's repeat that: So, at todays closing price, 100 1/8, you pay $422 to buy stock representing $100 in revenue at AOL. And, at todays closing price, 66, you pay $4,400 to buy stock representing $100 in revenue at YHOO. Neither one seems like much of a bargain, but I'm pretty comfortable with a YHOO short here. Didn't jump in all at once so if it goes up, I'll just short more. I agree, overvalued stocks can get more overvalued. But, over time, prices seem to come to more rational valuations. If I made any math mistakes please let me know. At these valuations, I am strongly reminded of PRST. Is Howard Lutts behind the curtain here? Hope we all make money Zebra