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Technology Stocks : Egghead Computer (EGGS) -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (2111)	7/25/1998 10:26:00 AM
From: Philipp	Read Replies (2) \| Respond to of 8307

LG: I assumed that you would know all those numbers and more. Just posted them for those who were less knowledgeable about them (like myself). I am not actually trying to determine the FA value of EGGS. That is clearly not possible. I also doubt that I will add EGGS to my core portfolio any time soon. I did try to estimate the value of some of the internet stocks using more standard assessment principles (but don't ask me exactly how, it involved a lot of convoluted arguments and filling in lots of gaps) and came up with numbers around $60, $40 and $20 for YHOO, AMZN and EGGS, respectively (this assumes that their basic business plans succeed!). My value of EGGS is just 1/2 of AMZN by comparing the size of their operations and ignoring any difference in name recognition, which I think may be short-term only anyway. I use these numbers to give me an indicative overvaluation factor. A factor of 3 for YHOO and AMZN is actually not that bad compared to MSFT (a factor of 3), which has been overvalued for years, and the overall market (a factor of 2). Of course, neither YHOO or AMZN have a proven track record like MSFT. I think what we need to gauge is what signifies strength in next week's report and indicates the potential for being a big/significant player in the foreseeable future, or what shows that EGGS is just a struggling company that has already failed once and is likely to do that again. The operating losses alone won't tell that story (unless they are more than 30 % of sales or close to profitability; neither very likely). While I wouldn't doubt that all the internuts will crash at some point like any bubble (Japan, etc.), I don't see that to happen immediately unless the general market crashes (certainly a possibility). Yesterday they showed more strength than I had hope for. Cheers, Phil