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

To: Axxel who wrote (1272)	1/2/1999 4:34:00 PM
From: Stewart Elliot	Read Replies (1) \| Respond to of 7772

The last EBAY surge was the result of a lot of good timing: internet hype and limited internet investment options (remember, there were very few IPOs before EBAY because of the market slowdown), positive articles, and a thin float. What makes you think that just because it goes below 200 that we would suddenly get a "buy" signal? Why would anything change? My prediction is that EBAY goes to 75-100 by quarter's end. Why? Increasing EBAY float combined with a slow down in the internet hype and a huge influx of new internet issues & IPOs. The EBAY float increase is a given. This increase presents the investor an ugly combo: high stock prices & increased supply just when many new internet companies are going public. If only 2,000,000 shares are released, $500,000,000 in new cash will be needed just to absorb these shares (almost 10x the amount of money EBAY raised in the IPO). Unfortunately, because of the new internet issues & IPOs, there are many more internet choices being made available to the investing public, which will limit the amount of new cash available for another EBAY spike. In fact, 20 new internet IPOs are expected to go public in the first quarter, releasing a flood of internet investment options. This does not include a large number of traditional firms that will inevitably transform themselves into "internet" companies (eg, the next wave of ktels). Hype will likely remain high, but will almost certainly slow down. During the xmas season, many casual investors are going to internet sites and buying goods. These casual investors try out the site, think how wonderful it is, then the hype grows in the retail investment community (who don't seem to understand the concept of a market cap). Unfortunately, the first quarter is a very slow retail season, and although the internet is the next "light bulb", "telephone" or whatever, the mania will likely slow a bit until the next xmas season because the hype engine will likely go up and down with the seasons. So there you have it: a slowing retail season, a huge influx of new internet issues dividing the speculative investment dollar and an increasing EBAY float. 75-100 in any other industry is insanity, but I'll give it to EBAY because there seems to be no sanity in the current market. Why do you believe that 200 will trigger a buy signal?