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

To: esterina who wrote (418)	10/26/1998 11:37:00 AM
From: Kevin McKenzie	Read Replies (3) \| Respond to of 7772

Of course nobody knows the answer to your question. But I have some opinions about the differences between Egghead and Ebay. (1) Egghead sells a very limited range of products (software, some hardware); Ebay brokers all products. (2) Egghead has a great deal of online and brick-and-mortar competition; Ebay is the only online auction site that has successfully attracted a huge population of individuals selling their items. Most of the auction sites are either re-selling computer products and office supplies, or they are too small to attract the buyers. (3) Ebay carries no inventory, they are a true auction house and make money through commissions. Therefore, no inventory expenses, no write-offs for obsolete inventory, no storage costs, etc. Egghead carries its own inventory (as I understand it, I may be way off) (4) Ebay has an extremely loyal base of sellers and shoppers. If you're selling something on Ebay, you know you'll get a good number of hits to your listing. And I think there is at least a perception, that the selling price will be higher than what you'd get on other auction houses. If you're shopping for something unusual, there's a good chance you'll look for it at Ebay (once you know about Ebay). There's also a better than average chance you'll find it. Egghead sells products that you can buy at dozens of places, so there is less customer loyalty; more comparison shopping. Ebay encourages customer loyalty with its "rating system" on registered users. Each user has a rating number based solely on feedback from other registered users; the higher the number, theoretically, the more reliable the user. Ebay has people with ratings in the high thousands and probably higher. This "goodwill" takes a long time to establish and registered users will not want to give up their goodwill to go to another auction house, unless they stand to make more money at the other auction house. (5) Ebay hasn't dissappoined many shareholders simply because they just became public. A lot of people lost a lot of money on Egghead, probably including institutional investors, and they hold grudges. (6) Ebay is a "pure" internet company. They began as an internet company; all their efforts have been toward becoming an internet company. Egghead was a brick-and-mortar that failed and is now trying to re-invent themselves. This worries people (I think). All this said, I'm having a hard time pulling the trigger at 63 7/8. With Ebay at 2.5 Billion market cap.

To: esterina who wrote (418)	10/27/1998 3:28:00 PM
From: david jung	Read Replies (2) \| Respond to of 7772

Motley Fool & Breifing: fool.com eBay Explodes Again We Fools are sometimes a little too harsh on Wall Street analysts for being absurdly optimistic. Yesterday, analyst Jamie Kiggen of Donaldson, Lufkin, & Jenrette came out with a buy recommendation on eBay (Nasdaq: EBAY), the on-line auction firm, with a 6-12 month price target of $100, about twice Friday's close of $50 1/8. While aggressive, that recommendation may not have been aggressive enough. Perhaps a more correct price target would be $100 sometime this week. Yesterday, the stock surged $23 1/4 to $73 3/8. Today the stock jumped again, hitting $90 13/16 before falling back to its current price of only $84 5/16. Beyond the recommendation of DLJ, the stock is being propelled on expectations that the company might announce revenues and earnings above expectations after the close today. Part of the reason for the dramatic price movements in eBay is the limited "float" (shares of stock available for trading). While eBay has approximately 40.2 million shares outstanding, only about 4 million of those shares are publicly traded -- the rest are owned by insiders and are not available for others to buy. Yesterday, trading volume was 6.8 million shares. Today, as of 11:45 a.m., volume is already 6.8 million shares. In other words, more shares have traded both yesterday and today than are in the float. That intense level of trading is common during a stock's first day of trading, but relatively rare at other times. There are a lot of attractive investment features about eBay. It is working on a business model that is already profitable, unlike many other Internet startups. Revenue is soaring (Q3 revenue is expected to be up over six-fold to $10 million), the company has a large and rapidly growing community approaching (and now possibly exceeding) 1 million users that creates some barriers to entry, and the overall online marketplace is expected to explode. At the same time, the company is now being valued at $3.4 billion, although revenue likely will not exceed $50 million this year. That's a hefty multiple to pay, even for a company with eBay's dramatic growth. One final thought for those who might think they have to jump on the eBay bandwagon before earnings are released. One common trading adage is to "buy on the rumor, sell on the news." briefing.com "12:05 ET ****** (DAYTRADER): Internet momentum investing has returned, rejuvenated by the headline-grabbing $100 price target issued yesterday by DLJ on eBay (EBAY 83 +9 5/8). As we have stated in the past, when the leaders are running one of the best ways to participate in the rally is to stake out a position in the 2nd and 3rd tier names that trade in the single-digits or low-teens. Indeed, many of these stocks are making impressive moves today, led by 24/7 Media (TFSM 9 5/8 +1 5/8, +20%) and CyberShop (CYSP 5+3/4, +18%). Briefing.com understands that when momentum takes over valuation becomes completely meaningless. Nevertheless, we have compiled a table of fundamental information on category leaders. The one stock that stands out as a bargain in this group is Internet advertising leader DoubleClick (DCLK 26 3/8 +2 1/8). This issue has rallied 32% since our bullish October 16 Story Stock. Later today, we will provide similar information on several 2nd and 3rd tier Internet names. StockDescriptionMarket-CapPrice/Sales Ratio1999 EstimateYahoo! (YHOO)Internet Navigation/Aggregation$12.09 billion80.5profit $0.61Amazon.com (AMZN)E-commerce$6.12 billion 19.9loss $1.66DoubleClick (DCLK)Online Advertising$437.3 million7.1loss $0.76GeoCities (GCTY)Web Community$989 million79.1loss $0.86VeriSign (VRSN) E-commerce Security$692 million30.1loss $0.02broadcast.com (BCST)Internet Radio$795 million57.7loss $0.56 " David freeyellow.com