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

To: Michael Collings who wrote (7894)	3/6/1998 6:27:00 AM
From: craig crawford	Read Replies (2) \| Respond to of 27307

<< William,you really do make some very good points. But there is one problem, it isn't proven that YHOO is worth 4 billion or will be. It isn't proven that YHOO will remain the leader, and it isn't proven that they can earn significant money on their business model. >> So you are saying that people should have just dumped C$CO way back when it wasn't easily apparent that they were worth $4 billion? Remember back in 1990 when C$CO came public most people knew nothing of the internet, and nothing of the routers needed to build the infrastructure. When it becomes obvious that YHOO is going to rule the internet and do billions of dollars in commerce and ad revenues, you will have to pay $40 billion! Some of us don't want to wait and pay $40 billion for YHOO after it's obvious they are for real. The people who get rewarded handsomely in the market are the one's who can see the opportunities that others can't. People shied away from C$CO for years while they balked at the valuations. << As with so many industries, todays winner does not mean next year's winner. I do not doubt the importance of the internet, I just doubt the claims of Yahoo's permanent dominance over it. Microsoft was not the first software company, but microsoft became the industry standard. Way back when, I remember Novell being the hot software stock. Microsoft was pretty young and just another software company >> So what are you getting at? We shouldn't invest in the old stalwarts like MSFT? We should invest in the young start-up's like MSFT was to NOVL and YHOO is to MSFT? In your argument it sounds like MSFT is going to turn out to be a NOVL and YHOO is going to be the next MSFT that stole NOVL's thunder. << In this model, there is so much competition from so many areas, I find it hard to believe that anyone can proclaim permanent dominance. I am sure that the annual meetings of all the internet companies are just singing the praises of the potential. You couldn't possibly imagine them doing anything else. I am sure YHOO is very good at it. >> What emerging business with huge potential doesn't have competition? To just say that there is competiton is not enough. I can provide you with several examples of little start-ups that generated billions in sales while their larger brethren stood there dumbfounded. The simple fact is that big companies don't always catch on to things the way innovative start-ups do, and little companies who outfox the 800 lb gorillas can grow to dominate their business. << And I am also sure all the institutions want the public to believe the miraculous potential of this company because they will need to believe it to pay these kinds of prices so early in the game. >> What is so ridiculous about the growth of the internet? Secondly, you can wait until it's obvious that YHOO is entrenched, but it will cost you a lot more than $3 billion when that happens. << There are no disappointments factored into this price and that alone should be a cause for concern >> This is true. But the market will wait until YHOO disappoints before it takes it down. Just maybe YHOO will never disappoint. << A company this young could easily make a few mistakes here and there especially in this kind of competitive race >> Once again we harken back to your argument that it is too risky to invest in young start-ups. That's fine, you can stick with the big gorillas that have been around for years. They are safer. But they don't offer the same potential that a YHOO does. << They may be able to continue to dilute their stock to keep a competitive edge for awhile but only if they don't disappoint. That may be an unfair demand upon a young company like this, but at this stock price, investors will demand no less. >> Investors don't care about dilution if the money is being put to good work. Just a paragraph ago you said that YHOO doesn't have deep enough pockets to weather a storm, now you say that if YHOO tries to get more capital from the equity markets is a negative. Sounds like they're are damned if they do, damned if they don't. << This run has been wonderful for the longs to date, but there comes a time to take some cards off the table. I have never enjoyed seeing the public take a bath on any stock, but almost every time they do. And that is because the stories are always so convincing. I don't know how many times I've heard about the wonderful prospects of and growth potential on overvalued stocks just before they collapse on some announcement. And almost every time you can look back on the volume in the weeks proceeding the announcement and you will see some record volume. But the real record volume hits when the stock is collapsing. >> Correct, the psychology can change on a dime and YHOO could start plummeting at any time. But usually for a high flyer to plummet it needs a negative catalyst. It seems to me that the shorts are just playing the odds that something will go wrong, and usually this is a dangerous proposition.

To: Michael Collings who wrote (7894)	3/7/1998 2:35:00 AM
From: Bill Harmond	Read Replies (4) \| Respond to of 27307

>>it isn't proven that YHOO is worth 4 billion or will be. It isn't proven that YHOO will remain the leader, and it isn't proven that they can earn significant money on their business model. What's with "proof"? Nothing's proven. Proven returns come at money-market rates. If you need proven returns, buy T-bills, insurance, laddered bonds, and utilities. The greatest returns are always accompanied by the greatest risk. >>As with so many industries, todays winner does not mean next year's winner. I do not doubt the importance of the internet, I just doubt the claims of Yahoo's permanent dominance over it. I don't think Yahoo will ever dominate anything. It doesn't need to in order to prosper. It just needs to provide compelling choices. So far Yahoo is best at doing that and seems to be leveraging itself beautifully. That's why it's lead is widening. >>Microsoft was not the first software company, but microsoft became the industry standard. Way back when, I remember Novell being the hot software stock. Microsoft was pretty young and just another software company. Every technology company's roots are unique, and comparables are nearly impossible to find. For a good part of its history, Novell was a hardware company like 3com. Microsoft masterfully leveraged itself with per-processor contract terms to PC manufacturers, while it provided a stable unified platform for application-building. Microsoft benefited from an open PC platform, Intel's engineering and production skill, and the productivity needs of American corporate restructuring. Yahoo's roots are in a different time and place. Yahoo was born into the Web. The adoption of web usage is several orders of magnitude faster than the adoption of PC's ever was. At it's fastest point, in 1994, PC unit growth was 24% a year and now is 15-20% a year. Web user growth running 17% a month, and the productive offerings on the web are accelerating usage. There are more and more good reasons to log on. Important change is occuring in Wall Street's attitude toward technology investing. Few need the lastest PC technology because desktop software doesn't require it and network bandwidth isn't sufficient yet to drive the need for more desktop power. Investing on the desktop is a dead area, with the exception of companies like Microsoft and Electronic Arts who are prime beneficiaries of higher volumes of cheap PC's. Microsoft gets its same Windows royalty whether the box costs $2,000 or $700. Investment money is moving onto the network infrastructure plays because that's where the bottlenecks are, and into the network content providers because that's where PC users are spending their time. >>There are no disappointments factored into this price and that alone should be a cause for concern. A company this young could easily make a few mistakes here and there especially in this kind of competitive race. Right now they don't have deep enough pockets to weather much of a storm and there are competitors that do. The price is always a concern, but Yahoo could make some mistakes and not die from them, nor even suffer loss of its lead. Every company makes mistakes. Microsoft has made some big ones. Yahoo has a $100 million cash reserve. Yahoo burned only $6 million during their first year as a public company. Now Yahoo is cash-flow positive. If I were short Yahoo, I'd get over it and move on. To bet short on this company and resolutely compare Yahoo to some convenient failure is nonsense. To dream of an imminent exhaustion top is just that, dreaming. This stock is a repeat of America Online, and since coming public Yahoo has even slowly gained relative strength compared to AOL. Right now AOL and Yahoo are the leading issues in the strongest sector of the market, and they have plenty of company with the likes of @Home, OnSale, Insight, Cendant, Sportsline, Amazon and others. If you're short Yahoo, ask yourself why. I don't think a high price is sufficient reason, because it's clear that a lot of money coming against you. If you're short, you're betting this move is ending.