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Technology Stocks : Creative Computers(MALL) -- Ignore unavailable to you. Want to Upgrade?

To: Tom Hua who wrote (495)	11/23/1998 8:35:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 1634

Tom - when a company grows from ground zero, the percentage is always high. But it will level off. ONSL did the same thing. I agree of course, and I expect the growth rate to asymptote - but regardless currently it is still growing very rapidly compared to ONSL et al and thus, as valued by a P/S measure, it is entitled to a premium over ONSL unless you think that next quarter it is immediately going to fall to the growth rate of ONSL. Clark PS Of course the big question is indeed 'what is the long term growth rate?'. Everything hinges on that. I myself am surprised at the legs on, for instance, Amazon. It's growth is slowing, but it is still very very fast for its size.

To: Tom Hua who wrote (495)	11/24/1998 12:51:00 AM
From: Clarksterh	Respond to of 1634

Valuation vs COOL, TGLO and ONSL: If you compute the time it will take for uBid, COOL, TGLO, and ONSL to get to the point where their sales run rate is equal to their current market cap (i.e. P/S=1.0) by extrapolating their current growth rates then you get: ONSL 7 quarters COOL 5 quarters TGLO 5.5 quarters uBid/MALL 3 quarters. uBid/MALL is severely undervalued compared to the other internet companies assuming that MALL is indeed allowed to distribute the shares of uBid tax free. If not, then they are still undervalued but not by as much. Note that eBay and AMZN have substantially different models and so they can't be evaluated the same way, but by using an equivalent earnings potential model they reach par in about 8 quarters. Clark Note that I actually cut uBid's growth rate substantially to make this estimate (down to 75% per quarter over the next 3 quarters)- something which I did not do to any of the other companies/stocks. What this says is that to be valued at parity with the other similar internet stocks MALL should be about 100. If it were as richly valued as the richest internet stocks it would be closer to 250. I don't think the latter is reasonable currently given the uncertainty (too far in the future), but just FYI.