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Technology Stocks : eBay - Superb Internet Business Model -- Ignore unavailable to you. Want to Upgrade?

To: McNabb Brothers who wrote (245)	9/24/1998 9:49:00 AM
From: Bill Monahan	Read Replies (1) \| Respond to of 7772

ebay is the ticker from news today - Just a little info on valuation: eBay slates to debut today at $18 per share. If so that values the "personal auction" firm at more than $900 million fully diluted IPO market capitalization or about 30x annualized sales according to our analysis. The one thing attractive about ebay is its model -- ecommerce. That means most of the action on the site centers around buying and selling. ebay's positive earnings also may get Wall Street's attention, but we don't think they'll last in a marketing war that may emerge. Mainstream media will say ebay is an anomoly for Internet IPOs but we don't think so for those with "ecommerce" central to their model. More about IPOs tomorrow. For now what about ebay and the top sites it must content with? We think over time auctions become another aspect of larger traffic sites, with Yahoo-Onsale trying to mimic that. Does it hurt ebay? Maybe a little but it has critical mass in our opinion. ebay vitals: During the first half of 1998, the number of registered eBay users grew from approximately 340,000 to over 850,000 and the number of simultaneous auctions being conducted through eBay increased from approximately 200,000 to over 500,000. As of August 31, 1998, ebay had over 1million registered users and over 600,000 auctions listed in 1,085 categories. The one thing ebay doesn't enjoy is a top 20 user site status, and that's the group that could rise to challenge its auctions as Yahoo-Onsale already have. Expect more to follow. Still, the IPO cap puts ebay in the elite group in terms of market cap valuation. The average trading market cap or private market value of firms-Websites in Mecklermedia's WEBDEX (which computes Website user values) is $1.6 billion, not counting Yahoo's $11 billion. At least two of the 10 range from $700 million to $800 million. And more than ebay is reviving the interest in Internet stocks. The overall market moved on rate talk September 23 and Internet companies cut deals left, right and center lately.