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To: tom pope who wrote (17553)	11/29/1998 7:09:00 PM
From: Ron McKinnon	Respond to of 53068

A MUST READ Internet-Stock Bubble Is Going to Explode; Will You Get Slimed? By Christopher Byron Special to TheStreet.com 11/27/98 There is a 100% guaranteed and infallible way to tell when markets enter what is known as the "Greater Fool" phase. It is characterized by the widespread belief that although the securities being traded are either preposterously overvalued or even have no value at all, they are still worth buying because (it is assumed) there will always be a Greater Fool available to whom they can be resold for a profit. "This time it's different," goes the chorus of the Greater Fool, sung in euphoric rhapsody in the final stages of almost every bull market in history -- from the South Sea Company land bubble of 1720 to the Goldman Sachs Trading Corporation trust bubble of 1929 and right up to today, in the refrain of digital-age gurus like Don Tapscott, author of Paradigm Shift: The New Promise of Information Technology. As always, the underlying message is the same: The old rules no longer apply. This happy onrush of the ignorant heralds the bull market's final phase -- the spectacular arrival of which we now may be witnessing in the bubble that has swelled up so colossally in Internet stocks. There is simply no other way to describe the surreal price increases now being racked up by two-bit junk stocks throughout the sector -- typically on the basis of no valuation benchmarks whatsoever and often in direct opposition to common sense. Consider a stock called Inktomi (INKT:Nasdaq). The company was taken public last June with a 2.25 million-share initial public offering by Goldman Sachs at 18. The company claims to be in the search-engine business, but mostly it's in the business of losing money. In the 12 months ended Sept. 30, the company reported $20 million in revenue and $43 million in operating expenses, with a $22 million net loss. Meanwhile, the company's balance-sheet equity of $43 million is accounted for mostly by the proceeds from its June IPO. So far, Inktomi's story is the same as countless other Internet horror tales: big ideas, no money. But here's what makes it completely -- indeed, uniquely -- baroque. By late last month, this nothing stock had been swept to 80 a share in the Internet frenzy, at which point a deluge of so-called Form 144 filings rained down on the Securities and Exchange Commission, announcing insiders' intentions to sell stock and cash in their profits. Meanwhile, on Nov. 20, the company unloaded 3 million more shares in a secondary stock offering, most of it on behalf of early insider investors. When something like that happens to a stock -- when virtually every insider for 20 miles around announces plans to bail out and a secondary offering increases the stock's float by more than 100% -- the stock in question normally takes a long, accelerating swan dive into oblivion. Want to know what Inktomi has done? It's doubled instead and now no longer sells for 80 but, as of Nov. 24, sells for 138 3/8! Folks, that's a $3.7 billion market cap for a money-losing, $20 million (in revenue) company with doubtful prospects. How will this outfit ever make the kind of money necessary to justify that price? Answer: Unless it gets into drug smuggling, well, forget it. This year, Inktomi has lost $1.15 per share, and losses in 1999 are predicted to improve to only 98 cents per share. In a best-case scenario, the company will report 11 cents per share of profits in the year 2000 -- meaning it is now selling for (get ready!) a two-year-out price-earnings multiple of 1,258 times projected earnings. (Microsoft (MSFT:Nasdaq) now sells for 49 times year-ahead earnings.) Want another? Let's take a look at an outfit called Creative Computers (MALL:Nasdaq). This isn't actually even an Internet company at all; it's just a computer-retailing operation that sells wherever and however it can (catalogues, online, stores, you name it). The company went public at 17 per share back in 1995, sank eventually to 3 and bounced around down there until about a month ago, when it woke from the dead and started to grow like Godzilla. On Nov. 18, the stock nearly doubled in a single trading session and as of Nov. 24 was selling for 34 1/4. Why? Following upon the berserk success of Internet-auction site eBay (EBAY:Nasdaq), which went public in a Goldman IPO in late September at 18 and is now selling for 197, Creative Computers announced plans for a me-too IPO for its own Internet-auction site: U-Bid Inc. There was a time when stocks like these Internet junk equities just couldn't be taken public by reputable Wall Street firms at all, no matter how many high-risk warnings were stamped on the registration statement. But that has obviously changed, and we now find one of the premier investment firms in the business -- Goldman -- pumping out these junk deals as if it were no better than a bucket shop pushing slop to the masses in the days of the old over-the-counter market. It's just disgraceful to see a firm -- even one with the uncertain reputation of Bear Stearns (BSC:NYSE) -- crank out a deal like theglobe.com (TGLO:Nasdaq) at 9 when it knows as plain as the fingers on its greedy little hands that whole armies of numbskull retail buyers are clamoring on the Internet to buy the stock at premarket-indicated prices north of 50 a share. The fools waiting to buy in the aftermarket are, of course, the Greatest Fools in the entire Internet-stock hustle -- the ones standing there with looks of happy stupefaction, clamoring to buy for $50, $100 and even $150 a share of stock just sold via an underwriter for $9 to some momentum-fund manager who will instantly flip it to the knuckleheads on the Internet for a 1,000% profit. This isn't investing. It isn't even speculating. It's just throwing money at anything that smells of paradigm shift and has a ".com" in the name.

To: tom pope who wrote (17553)	11/29/1998 7:16:00 PM
From: Larry S.	Read Replies (2) \| Respond to of 53068

Tom: CD, NM and Netcenter - Tom, i am not aware of a connection between NM and CD. Perhaps there is confusion between NM and Netcenter, which is a division of CD. I've pasted some relevant articles. CD does have an internet sales/auction presence thru Netcenter. to what extent this has been behind CD's move this week, i have no idea. I think CD is moving for other reasons ( institutional ownership coming back in??). Anyway, i would appreciate any more input on this. Again, the following pastes are simply that - pastes of news and items from home pages: ------------------------------------------------------------------- Netmarket ( a Division of CD - Cendant) More than an online mall, NetMarket is a membership-based, value-oriented consumer site spanning most areas of consumer spending, including travel and auto services. At NetMarket, consumers are able to purchase a wide selection of products ranging from consumer electronics and travel packages to automotive accessories, compact discs and books. While anyone can access and shop at NetMarket, members receive additional cash back on purchases, special discounts and privileges. (From Cendant Home Page) ---------------------------------------------------------------------- Cendant Corp. (NYSE:CD - news)'s Netmark, for instance, offers the Haggle Zone for shoppers who are looking for the chance to fight for the best price on popular toys over the computer, rather than paying the going rate at the traditional stores. The site has a patent pending on the haggling feature. Netmarket, which also has auction and flea market options, offers 1,700 brands and derives its revenue primarily from membership fees. Although anyone can buy products from the site, members get a larger discount, expanded warranties and a lowest-price guarantee, said Kerry O'Neil, vice president of interactive services at Cendant. (from Yahoo news on CD) ---------------------------------------------------------------------- National Media Corporation (NYSE: NM - news) today announced that its Everything4Less Website, originally scheduled for Thanksgiving weekend, became operational on Wednesday, November 25, 1998 and can be accessed at www.Everything4Less.com or, simply, www.E4L.com. Everything4Less is an electronic commerce/Internet and catalog-based membership shopping service, which provides more than 800,000 products at guaranteed low prices to online shoppers, including hundreds of major brands with extended warranties. The Everything4Less advertising campaign, featuring ''America's favorite TV moms'' -- Shirley Jones (''the Partridge Family''), Florence Henderson (''the Brady Bunch''), and Marion Ross (''Happy Days'') will debut Thanksgiving weekend. )From Yahoo news on NM) ---------------------------------------------------------------------- To: +stkpker1 (19291 ) From: +Michael Berkel Sunday, Nov 29 1998 3:41PM ET Reply # of 19309 CD makes the money. Everything4less is owned and operated by CD. CD will be sharing the revenues with NM as remuneration for NM's marketing exercise. What percentage NM will receive is an unknown, but my personal view is that CD will receive the lion share here, since everything4less is in fact a Netmarket business and Netmarket is one of the online products of Cendant. Hope this helps. Michael B. (from Marketgems thread) - no idea of accuracy of this post