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

To: nlam who wrote (12636)	7/10/1998 11:36:00 PM
From: Steve Holmes	Respond to of 27307

Growth may justify price. I am one of the many non believers who missed out on a lot of upside on Yahoo. Recently, I finally decided to do a little work and consider if the price has any basis in reality. First I wondered what the market potential for advertising and transaction fees on the web may be. The primary real world example I felt would be a mature broadcast firm like CBS or NBC. Though not exactly the same, these large industry leaders are dependent on advertising dollars and provide value added content. It turns out that CBS has average sales of about $4 billion per year which includes TV and radio revenue. If Yahoo wins as an industry leader and the buying public begins to use the web for commerce, $4 billion in annual revenue for a single company may be possible in a few years. Perhaps as PC prices drop, new commerce products emerge and other WEB access devices come on line, Web use by the global market will increase. Next, I considered the rate of growth of sales. In order for the stock price to justify the $180 level, it would seem that annual sales would have to grow by 75% per year while maintaining a net profit margin of 18% for the next five years. This would result in annual sales of approx. $2.4 billion! Based on past performance of sales growth and the reality check mentioned in the second paragraph, this growth just may be possible. Granted, however, that sales growth tends to slow as a company matures. The volatility we see is understandable since a very slight change in growth expectations or profit margins has a multiplier effect on the price. In summary, to play this stock is not total madness, just high risk. If you feel that Yahoo can grow in sales to $2.5 to $3.0 billion in five years, this is a winner. If you feel that management cannot continue to surprise on the upside, stay ahead of the competition, grow sales at 75% per year while maintaining an 18% profit margin, then this stock may be an opportunity to short.

To: nlam who wrote (12636)	7/11/1998 12:13:00 AM
From: jawd	Read Replies (4) \| Respond to of 27307

I've noticed that most of these threads contain bears, people who short fantastic success stories. Many of them have been severely burnt with AMZN and have lost a considerable portion of their net wealth. Shorting internet stocks is a quick way to the poor house. We've seen stocks rise 200% in days. We don't see them come down so fast, except for shams like CFON which had no product at all - just a PR at the right time. But even a sham like CFON seemed to last forever. I get the impression many SI users simply don't have any real comprehension of where the internet is taking the corporate world over the next few years. They seem to be stuck in an old way of looking at things. The rules for judging the potential of a stock have changed. The bottom line now includes some vision based on what we've seen happen with countless companies like MSFT, DELL, INTC... IMHO - YHOO is going up, if not now, then later. When it does, the return will be huge. I don't see any other internet company with such a bright future and good management team. Patience is all it takes. I would never be dogmatic and say that "I'm right - you're wrong!" neither would I put my life savings into any stock. The 1000% upside is well worth the 50% downside IMHO.