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

To: SLN who wrote (34873)	1/14/1999 9:34:00 AM
From: Platter	Read Replies (2) \| Respond to of 164684

From TheStreet.com...Meeker Shakes Up Net Stocks By Eric Moskowitz Staff Reporter 1/13/99 7:05 PM ET The so-called Queen of the Internet is a bit worried, but it's not about Brazil. Morgan Stanley's Mary Meeker -- who was given the royal moniker recently by Barron's -- urged clients to "take some money off the table" in a report on Yahoo! (YHOO:Nasdaq) this morning. "The feel of speculative excess and making too much money too fast reminds one that greed can be bad," she wrote in bold letters. These cautionary words sent shock waves through the tech market this morning, and insiders say the statement was one of the reasons the tech-heavy Nasdaq tumbled over 100 points in early trading. "She's fueled some of this hysteria on the upside by finding new valuation criteria for these stocks, so it was only reasonable for her to calm things down a bit," says Lenny Schuster, a hedge fund manager with Gemina Capital. "But it may have shocked people a bit this morning to see her comment on it like that." At its lowest point, the Nasdaq was down as much as 115 points, while Yahoo! gave up 70 points, or 17%, in a matter of minutes. While the index soon recovered from this Internet anxiety, the early reaction was significant because of Meeker's high standing in Internet circles as one of the people who have provided some much-needed credibility to the still-embryonic sector. Meeker gained her stature after composing The Internet Report for Morgan Stanley in 1995. The thick report was passed around on Wall Street so much that the white-shoe firm hastily arranged for publishers HarperCollins to turn it into a book. In 1997, her Internet Advertising Report was also published by Harper. The publicity has paid off for Morgan Stanley. The firm helped underwrite the initial public offerings of @Home (ATHM:Nasdaq) and Netscape (NSCP:Nasdaq), and the secondary offerings for America Online (AOL:NYSE) and Excite (XCIT:Nasdaq). Morgan also was involved in a high-yield debt offering for Amazon.com (AMZN:Nasdaq). The firm is still representing Netscape even as it gets scooped up by AOL. During each volatile market last year, Meeker's soothing words backing the staying power of the Internet helped the sector recover and surge even higher. But now, after this latest speculative bubble, which had sent Yahoo! up 70% in the last eight trading days, Meeker thinks it may be time for a sectorwide breather. "These illiquid shares appear to be ahead of themselves ... and yes, we would like these stocks to sell off to release some pressure from the system they have helped create." Talk of an Internet bubble was broached by none other than CIBC Oppenheimer's Henry Blodget, who ironically was the one who put a $400 price target on Amazon last month. After seeing this target eclipsed in just three weeks, Blodget put out a report titled Surviving (And Profiting From) Bubble.com, in which he suggested that "there is a good chance that the sector will correct sharply in Q1, perhaps by 30% to 60%." (Oppenheimer isn't an underwriter for Amazon.) Of course, both Blodget and Meeker are both still bullish on the long-term prospects of the Internet -- "it will cause the creation and redistribution of hundreds of billions of stock market value over the next few years," writes Blodget. Significantly, Meeker may have more reason to be cautious than she let on this morning. Two money managers suggested that at Morgan Stanley's Arizona tech conference last week, the firm's technology team may have decided to try to squash some of this Internet mania and Meeker was only following orders. They pointed to how the firm's semiconductor analyst Mark Edelstone downgraded two "Internet-like" companies, Broadcom (BRCM:Nasdaq) and Rambus (RMBS:Nasdaq), Tuesday. But Edelstone dismisses such charges and notes that his call was valuation-driven. "The semiconductor sector has had a tremendous rally and I still believe we are in the early part of a multiyear rally," says Edelstone, noting that Rambus doesn't have anything to do with the Internet. "Rambus has about as much to do with the Internet as Intel (INTC:Nasdaq), so their thinking on this may be a little bit of a stretch."