Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (28996)	12/5/1998 11:24:00 AM
From: llamaphlegm	Respond to of 164684

and one last little gem from barrons World Wild Web Our timing was a little off but, boy, were we right otherwise Review \| Preview Follow-Up: Capitalist Fools? \| Follow-Up: Who's Next? It's strange to think of it now, but just 17 months ago we noted the prevailing view of the Internet and e-commerce as "a highway from hell" for losing money, but still predicted an Internet retailing takeoff within six months to a year ("'Net Change," July 7, 1997). Okay, our timing was off by a few months but, boy, were we on target otherwise. In today's stock market, no sector is hotter than Internet issues generally and e-commerce stocks specifically. Recent IPOs like eBay, Cyberian Outpost, EarthWeb and Software.net have made instant multimillionaires of their young founders, even as the stock prices of companies such as Yahoo, Amazon.com and America Online have soared to sky-high 500-plus multiples of prospective five-years-out earnings. Not all our picks back in that cover story were right on target, regretfully, with Lands' End, CyberCash and OfficeMax among those that didn't do very well. But there were some big winners, including AOL jumping from an adjusted 16 3/16 to 88, Dell Computer from 15 43/64 to 66 and Egghead.com from 4 to 17 13/16. The biggest gains of all, however, were with Yahoo and Amazon.com, two picks whose prices have each risen 16-fold, from about 12 to the high 180s. The enthusiasm is based on hopes that this Christmas -- and 1999 as a whole -- will see the coming of age of Internet shopping. Forecasters project that e-commerce revenues will top $20 billion this year, up from perhaps $5 billion in '97 and just $700 million in '96. Target spending estimates for 2000 go all the way up to over $200 billion. The catch is that it's all a bit pie-in-the-sky. Sure, some people are making money retailing through the World Wide Web -- Dell Computer is now selling more than $10 million worth of computers a day that way. Still, over 50% of retail Websites are losing money, and others are only barely in the black. With Web activity attracting more competitors every day, it's certain there will be many a slip and many a bankruptcy before the dust settles. That should scare a good many Internet investors still riding the tiger. While there is a good deal of dispute over just how to value Internet stocks (some say that market cap to electricity consumed is as good a way as any), it is worth remembering that even sober evaluations based on "theoretical earnings-multiple analysis" by Alex. Brown's Shaun Andrikopoulos puts many stocks on rather rich prospective year-2000 P/Es of 40-200. But when might the bubble burst? On that score, we are far from certain. Still, remember that fads often die as the mass market leaps on board. And on that scare, one good reading that this is now a mass market is that Business Week, Fortune and Newsweek last week ran cover stories on the cyber-retailing boom. Time to bail out? --Jay Palmer